We found a great car at a great price for our son’s first vehicle, but it was a little out of his price range. We wanted him to have dependable transportation that would last him at least through college, so we decided to take out a loan and make payments on the balance. I was a little concerned as we talked with the finance person since we were still making payments on our van. I wondered, “Can you have two car loans at once?”
The answer is, you can indeed have two car loans at once. There are several things lenders look at when analyzing your car loan application, and fortunately whether you already have a car loan isn’t one of them. Here are some of the important things lenders do look at:
Debt To Income Ratio
Lenders will look at how much debt you have in relationship to your income. If you already have a high amount of debt, you may not be approved. If your debt is relatively low in relationship to your income, even if you already have a car loan, the odds are favorable that you will be approved.
Lenders like to see that you make your payments consistently and on time. Your credit history is a record of your payments from other installment loans, thus it gives lenders an idea as to whether you will diligently pay back the money loaned to you.
Your credit score is determined by many things, including how much debt you have, as well as the behavior reflected by your credit history. Your credit score can also influence your interest rate. Borrowers with high credit scores will enjoy the best interest rates, while borrowers with low credit scores will pay more in interest.
Because of our low debt to income ratio, good credit history, and credit score, we were easily approved for a second car loan, and with a great interest rate. Many factors play into whether you will be approved for a car loan, but if you’re wondering, “Can you have two car loans at once?” the answer is, “Yes!”
How about you, Clever Friends, have you ever had two car loans at once?
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