How to acquire a higher loan-value ratio of your auto loan?

Often, while buying a new car, obtaining a car loan that equals the value of your car can be tricky. The whole point of applying for a car loan is to ease the financial burden of buying your new car. Therefore, it is best when the maximum amount of your cost is covered by the auto loan. Therefore, any auto loan with an impressive loan-percentage value is sought.

So what is the percentage of Loan-To value and how does it work?
Technically, a loan-percentage value is the amount of the loan financed, relative to the value of the car. It is usually calculated by dividing the loan amount by the current value of the vehicle.

In an ideal scenario, the loan-value percentage on all car loans is less than 100%. However, on a situational basis, lenders can grant loans of up to 150% of the value of the vehicle. For example, suppose you want to buy a car worth $ 50,000 and the loan-value percentage on the auto loan is 120%. It indicates that you still have $ 10,000 to spend on other expenses while you can easily cover the cost of your new car.
A lower loan-percentage value in an auto loan means a lower risk for the lender. However, there are several ways to get a loan-value percentage that is greater than the value of the car you want to buy.
What should you keep in mind to get a higher percentage of Loan-To value?
A Clean Credit History
A sparkling clean credit history is by far the most essential factor, not only in getting a car loan, but also increasing loan-value percentage. Without a good credit history, accessing a car loan can be difficult and can cost you a little more. Therefore, it is imperative to maintain a good credit history as it is extremely important in acquiring a larger loan-percentage value on your auto loan.

Type of car
Whether you are buying a new car or a used car, your repayment options and loan-value percentage on the auto loan can vary greatly. Surely, buying a new car has its own set of benefits that you are backed by a few years warranty. In addition, the percentage loan-value on used cars can not be absolute versus new cars. Therefore, a car loan for a new car can cover the loan completely and in some cases even extend it to an amount more than the cost of the car you want to buy.

Constant income
The main criterion for qualifying for an auto loan includes a steady income. For any lender, a steady income is proof that you are able to repay the loan amount in a certain period of time. Generally, lenders ask for payment receipts or bank statements to validate your income. With a stable income over the years, getting a higher loan-percentage value on your auto loan is possible.

Taking into consideration the above points, you get a clearer picture of how a loan-percentage value in an auto loan works and what factors you should consider so that you can negotiate a higher amount on your auto loan. Always carry out extensive research and read the loan agreement meticulously before deciding on the choice of a car loan.