Getting a car loan can be a long, drawn-out process if you don't know a few tricks of the trade. Car salesman are trained to up-sell or talk you into a bigger and better vehicle, all the while saying that it's the best deal. Don't be fooled by salesman and weigh your options for getting a loan carefully.

Assess your Credit and Budget

The most important step in getting financed for a car, and before shopping for a loan is to make sure you know your options. Your budget and ultimately your credit score will dictate what kind of loan you qualify for and afford. Obtain a free credit report. Free credit reports are normally available once a year from the three major credit reporting bureaus of Equifax, Experion, and TransUnion. You can get a free report from each of these companies through a central website, annualcreditreport.com. Review your report and clear any inaccuracies. That will help your credit score, a separate report that you will need to buy from one of the three credit agencies. A score underneath 600 will most definitely require a significant cash deposit, or a co-signer for a loan. A score above 700 is considered "good" credit, and you should easily be able to obtain a loan with a low interest rate. Once you have your credit score, it's time to assess your budget. Based on your monthly income, and subtracting all of your monthly bills from your income, you should have a little extra. This amount will dictate what type of vehicle you can afford. For example: A car that costs around $20,000 over the course of a four-year loan will run you a little more than $5,000 per year with added interest. Your monthly payment would exceed $400.

Get Pre-Approved

Talk to your bank that you've established a history with. This is the best source for obtaining financing for a vehicle because you've already established a financial record with them. Consult with a loan officer at your bank to see if they can offer you a low monthly payment and interest rate based on the vehicle that you would like to buy. Many times, your bank will only provide a loan that is of low risk for a vehicle. This means that a used vehicle with high mileage may not be suitable to provide a loan for. A new vehicle with low miles is a much better financial investment for a bank.

Go to the Dealership

Shop around before you decide. Go to as many automobile dealers as you can find to look at their inventory. When a salesman approaches you, just tell him you're browsing and are about to leave. This will keep the salesman at bay until you're ready to do business. Many times aggressive salesman talk prospective buyers into a vehicle that they either don't want or cannot afford. Another thing to remember is that if you're trying to obtain financing for the vehicle from a source through the dealership, they will have to run your credit report. This is known as a "hit" on your credit, and if you run from dealership to dealership having your credit pulled every time, this will decrease your score and hurt your chances of obtaining a good car loan. When you're ready to do business, let the salesman know, and stick to your guns. Don't let them talk you out of what you want. You will ultimately have to pay for this loan and be satisfied with it for the next few years.

Source:

Car Works.com: How to Get a Loan

Cars Direct.com: How to Get a New Car Loan

UrHowto.com: How to Get a Car Loan