How does asking for a bank loan work?

[Whatthefluff]

Say I found a used vehicle selling by a private seller for $6k. I have $2k on me and want to ask the bank for a 4k loan to buy it. How does this work?

[Godsvengeance]

You can often get preapproved for a loan at a bank or credit union if you know the car's information (year, make, model, VIN). The bank will then generally tell you if they are willing to give you a secured loan on that vehicle (means you are putting the car up as collateral and gets you a lower interest rate) or an unsecured loan (no collateral so higher interest rate). The collateral gets you a lower rate because if you stop making your payments, they can take ownership of the car and sell it to recoup their money. Another consideration would be car insurance. Most banks require you to carry full coverage (including collision) on a car that they gave you a loan on (so be sure to confirm if that's required and see how much that will cost). The term (how long you have to pay it back) of the loan also affects the interest rate (longer loans generally have a higher rate).
As for how, it's easy. You can just walk into the bank and say you are interested in a car loan or even just search online. They will ask for the car's info and run your credit score. They will likely also ask for proof of employment and ask if you already have accounts with them (they are more likely to give loans to current customers than to new ones)

[hahahmm]

@Cute_Miss_Laura gave good info. You can always just get an adult to co-sign a loan & then the bank is not concerned with whether you meet all of their requirements or not. That said... only do it if you fully intend to pay the loan back because it wouldn't be fair to the co-signer if you fail to make payments!

I wouldn't be eager to pay $6k for a car from a private seller unless I'm a car expert or I have someone who is inspect the car first. I'd also avoid buying any luxury car unless you have deep pockets because they tend to have high repair costs.

Oh, and it's going to cost more than the seller asks for because you have title transfer fees, registration, sales tax, insurance (needed on day 1). Smart sellers pay for the title transfer themselves but I don't know if this seller is smart or not.

[purplepoppy]

Most banks have an online loan calculator that lets you play around with different monthly payments and loan amounts. Generally the more you borrow the lower the interest rate so in the long term it can actually be cheaper to borrow more but pay off a bigger chunk each month.
If you want to go down the face to face route just directly ask "I can afford X amount each month, what can I get?"

[TacosRAwesome]

I think it depends on the country. But here, you tell bank how much you'd like as a loan, give them your last 3 payslips and the last year's fs3 (basically how much you earned in previous year) and they give you a reply within 10 working days.

[20yearsolder]

Walking to your bank, ask to see a loan officer. You give them the details on the vehicle, tell them you want to borrow four grand. Typically they run your credit and as long as you've been paying your bills on time and have current employment. They will grant you the loan. Depending on the age of the car determines how long they will finance your loan. A newer car gets more months to pay off than a used vehicle

[Sydefx]

First thing you do is set up a meeting with your banks “commercial banker”


Next, they will ask you questions that you need to make sure you are very clear about.
Questions such as:
-How you plan to use the money
-The amount of money you are requesting
-Your desired loan terms
-How you plan to pay back your loan
-And collateral to be used


Then the banker will look into your information using this process called “5 C’s” bs. 5 C’s include character, capacity, capital, collateral, and conditions.


Since it’s small loan it shouldn’t be too hard for you to get your hands on a few $k.


The main way your getting a loan is the bank looking at your credit score if it’s good they will approve you. But you need to secluded a meeting with your bank.


Also avoid small loan fees


Try a national bank for small loans


There’s many factors in getting a loan but I hoped I kinda helped?

[JustiReno]

You can ask a credit union if it a private seller may have better luck that way you just go talk to a banker not a teller, tell them your plan and they may ask you some questions, and you may or may not walk out with some cash in hand. That’s how it works in a nutshell 😉 my car was $13000 got $5000 loan from BECU, Chase turned me down

[GoodGuyBreakingBad]

You make an appointment to go in and have a talk with them. If you are approved always pay more than what the monthly payment is and make the monthly payment earlier than the due date. I have a small revolving bank loan and it was for $250 plus interest so every month I pay it in advance $20.00 and I make the payment early I don't want to fall into default on the loan. Mine is with KeyBank and I don't have the best credit.

[jahaims]

You apply and based on your credit you will have an allotted amount and a interest rate to pay it back. The better the credit the lower the interest and the bigger loan can be. They will also only give you a loan for the approximate value of the vehicle.

[Cute_Miss_Laura]

You apply for a loan. Putting 33% down would definitely help. But they will still run a credit check, and if you qualify offer you various loan packages based on your credit score. 12mos at x% APR, 24mos at y% APR 36mos at z% APR. When I bought my new Jeep I saved several points by taking a longer 72month loan, instead of the 60month loan I wanted, but I did save a bit.

[Gwenhwyfar]

Go into the bank and talk to a loan officer. They will review your credit history and other relevant factors and make a decision.

[Hanrej]

They will look into your ability to pay off the loan and unless you have a bad credit score your loan should be approved. You get an interest rate and agree on a payment plan. Then you work and pay until it's payed in ful.

[jamesgoldman]

You make an appointment, explain why you want it and they (in my experience) will not like the gamble so turn you down

[UniquelyBasic]

I have no idea how life works. They dont teach you this in school and its a shame.

[scooogy]

You'd do the check dance like Ted asked for it in "How I met your mother"

https://www.youtube.com/embed/NwKjzG6biX4

[Anonymous]

You contact your/a bank and set up a meeting, they will do a credit check and ask a few questions to see if you qualify. What is the make, model and mileage of vehicle? Don't want to spend 6k and get a money pit.

[Desconhecida]

One of the few things I know is that you need to prove you can pay them back. A "collateral" thing.

[Anonymous]

Have you ever taken out a loan before? Because if not it wouldn't matter if you had 6k in your account they'd still turn you down. Establishing credit is one of the hardest things to do.

[In_Trance]

You need to show the lender your plan to pay the money back

[BeachLuvR97]

Bad idea! Save up the cash. Never take out a car loan.

www.daveramsey.com

[Pete671]

Prove you don't need the loan lol,,,

[jimmy2]

Go for it them things now sell $36,000

[Anonymous]

You can shop for auto loans online.