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How to Get Car Loans with a High Debt to Income Ratio

People may be wondering whether it is easy to get car loans at a high debt to income ratio. Yes. It is absolutely possible. However before getting into the details one must need to know what actually this debt to ratio is and how it is calculated.

The debt to Ratio is calculated by including the entire monthly amount overdue along with the mortgage as well as rent and dividing the total sum with the total income. It can be understood with a simple example.

If your monthly debt along with housing is 1000 $s, and your total income is 2000$s, you debt to income ratio will be 1000/ 2000 which is 1000 or 0.5%. This must be precisely calculated by including all the card bills, loans and other things that is being brought on credit.

How to determine the debt to income ratio

If you are seen to have a good credit score, you will high a reasonable good debt to income ratio because there are a number of things that you have purchased on credit. A low credit score will determine that you have a poor debt to income ratio. In order to obtain a car loan you should have a ratio which is not more than 36% however if your rating is a little high, it is not totally impossible to opt for a car loan.

Getting a Car loan with high debt to income ratio is not unfeasible and there are certain parameters where you can get the car you opt for. Try staying at a 45% debt to income ratio for these tips of obtaining a car loan.

How much can you afford?

Before opting for a car loan it is very important for you to know how much you can afford to pay. You can take the help of a calculator which will help you search for the car range which will suit you. You should not try and buy something which is above the limit. Cut your coat according to your cloth.

Try not to get cheated

People will offer you different kinds of loans and high end cars for their revenue enhancement. However if you take more amount of loan the interest rate will be higher and you will end up paying more than required.

As per the researchers from http://www.fincar.com.au/, in order to get a car loan with a high debt to income ratio certain things should be kept in mind.

Trying to shop for loans

Try opting for loans from banks which will give you loan at a low interest rate. Also keep in touch with different car dealers who have tie ups with various banks for offering loans at high debt to income ratio.

Try Negotiating the rate of interest

Try negotiating the rate of interest. Do some homework before going to the loan department and ask the personnel to show you the loan sheets and where there is a sell rate as well as buy rate. You should opt for the buy rate which is lesser.

Avoid taking loans from where you are buying

Try avoiding taking any kind of help from where you are buying. They always charge you a high rate on interest and if you fail to default by a month, your car will again get reclaimed.

It is not impractical to obtain car loans with a high debt to income ratio. Just do your homework before you step forward and you will achieve your dream car in minutes.

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  • car loans

    the loan you must know the total cost of the car and how much amount you require to buy the car

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