How Long Can You Get a Car Loan For? Things to Consider Before Applying (2024)

FAQs

How long should you wait to apply for another car loan? ›

Many car buyers ask, “when can I refinance my car” and “how long should I wait to refinance my car?” From a practical standpoint, you may need to wait at least two to three months to refinance a car loan after purchase. During the first few months of a car loan the car title will be processed and transferred to you.

If you apply again too soon, the multiple hard inquiries could continue to lower your credit score, making it even harder to get approved. Waiting 3 to 6 months gives your credit score time to recover before reapplying.

How long should I wait before applying for another loan? Again, this can depend on your bank or lender's policies. Some lenders require you to wait 3 – 12 months (or make 3 – 12 monthly payments) before you can apply for another loan.

Pre-approved auto loans usually last between 30 and 60 days. A representative at your credit union or bank can explain how to apply.

An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.

A borrower with a poor credit history or negative financial situations, such as bankruptcies or repossessions, will have a harder time getting approved for a loan—even with a good co-signer.

While it doesn't happen very often, it is possible to be denied a car loan even after taking possession of the car. To minimize the odds, try not to make any major changes to your finances or credit until your loan is finalized, including not changing jobs, if possible.

Borrowers may be denied for vehicle financing due to errors in the application, bad or limited credit or a large amount of debt. The first step following auto loan rejection is to contact the lender to request the specific reasons for the denial.

The good news is that if you reject a student loan and then change your mind later in the same academic year, you can reinstate your loan. The same goes if you took less than you actually qualify for — you can increase your loan amount later on.

Yes. Many banks and lenders will allow you to take out more than one loan, but they typically have limits. These are a few lenders that cap the number of loans or amount of money you can borrow. Be sure to check the fine print or ask a lender directly if they aren't on this list and you want to know their limits.

Can I get a loan if I already have 2 loans? ›

Borrowers can have more than one personal loan, but how many loans and how much you can borrow depends on a lender's requirements and whether they'll approve a second or third loan. Managing multiple personal loans can also strain your budget, so it's worth considering alternatives before turning to another loan.

When a lender accesses your credit report, a so-called hard inquiry is added to your reports. If your loan application is denied, the inquiry will remain, but the lender's decision will not appear on your credit reports. So, a declined loan will not appear on your credit report and won't directly impact your scores.

What is a good APR for a car loan with my credit score and desired vehicle? If you have excellent credit (750 or higher), the average auto loan rates are 5.07% for a new car and 5.32% for a used car. If you have good credit (700-749), the average auto loan rates are 6.02% for a new car and 6.27% for a used car.

As such, it's not something you should expect to affect your credit score much—it certainly won't wreck it. While yes, getting pre-approved for an auto loan does involve a “hard credit inquiry”, the impact on your credit score is minor.

Yes, but getting a second loan when you're still making payments on your first can be a bit more challenging. You will need a strong credit score and adequate, stable income to cover the monthly payment on both car loans.

Taking out a second car loan can significantly impact your credit score, but it doesn't have to have long-term effects. While your debt-to-income ratio will increase, resulting in lower credit, you can improve your credit score over time by staying consistent with your payments.

Lower Approval Odds

Because lenders perceive a second car loan as risky, the odds for approval are generally lower. Lenders might assume you will struggle to make payments, which will cost them more money if you default. Still, you can take several steps to improve your chances of approval.

You can apply for a car loan when you already have one, but getting a second loan might be more difficult than it was when you got the first loan. This is because your debt-to-income (DTI) ratio will be higher for the second loan because you will have the added debt of the first loan.