Auto Loans: What You Need to Know

Whether you are shopping for a vehicle or wanting to refinance, the process is less stressful when you already know what to expect. It is important to understand how and when to obtain financing for your vehicle.

Is it best to apply for a loan before or after I find a car?

It is not uncommon to get a pre-approval before you know what car you want to buy. However, once you find the car, you will need to provide your loan specialist with the car information to make sure it meets loan requirements. A pre-approval gives you negotiating power when you are shopping for a vehicle. It will make the car buying process smoother for you because you already know the loan amount for which you qualify. You can get pre-approved by applying online or by phone at 316-383-1234.

If you decide to apply for a vehicle loan before you have found the perfect car, we may be able to provide you with a pre-qualification letter to take to the dealership to begin your shopping experience. Not all dealerships will accept pre-qualified letters, so be sure to call in advance to confirm. If you already know what vehicle you would like to buy, we can work with you and the dealership to provide a loan for the vehicle, skipping the need for a pre-qualified letter. Having full vehicle information and an idea of the purchase price can speed up your loan approval process.

How long does a pre-approval last?

An auto loan pre-approval with INTRUST Bank is valid for 30 days. 

What qualifications does the car have to meet to be financed?

Generally, the vehicle should be newer than 10 years and have less than 80,000 miles. However, financing may be available for vehicles outside of those qualifications. The vehicle must be in good condition. It cannot have a salvage, rebuilt salvage, or non-highway title.

What finance restrictions do I need to be aware of if this is my first time buying a car?

If you are a first-time car buyer, we can help you understand your financing options and walk you through the financing process. Vehicle requirements for first-time buyers are: 10 years old or newer, fewer than 80,000 miles, borrowing under $15,000, and maximum 80% loan-to-value. The loan-to-value means you can only borrow 80% of the vehicle’s value, so you may need a cash down payment for your vehicle purchase. 

How do I apply for an auto loan and how long does it take to get approved?

You can apply by phone at 316-383-1234 or complete a full application online. The approval process is quick, and some online applications can result in automatic decisioning shortly after being submitted. If more information is needed before your application can be approved, we will reach out to you. Depending on the time of day you submit your application, you could receive a decision the same day.

How much should I use as a down payment?

Generally, you should budget to put down at least 20% on a new vehicle and 10% on a used vehicle. This will help you keep your monthly payments low and prevent you from owing more on the vehicle than what it is worth as it depreciates.

What factors affect interest rates on auto loans?

Some factors that can affect your interest rate on an auto loan are the length of the loan, your credit score, mileage of the vehicle, and the age of the vehicle. Use our online calculator to estimate how these factors can impact your loan terms and payment amount.

How do I know what interest rate I would qualify for?

You can easily calculate your estimated interest rate with our rate calculator, where you can evaluate how your FICO credit score and vehicle details impact the rate.

How do I get a copy of my credit report?

Federal law mandates that individuals are allowed a free copy of their credit report from all three reporting agencies every 12 months. To request your report, visit annualcreditreport.com.

How do I calculate my monthly payment?

To calculate your monthly payment, first use our rate calculator to estimate the interest rate for which you qualify. You can then use our monthly payment calculator to adjust your car loan details to calculate your monthly payment.

How much can I afford to borrow?

If you are unsure how much you can borrow, you should start by evaluating your monthly budget. If you need some help getting started, our Helpful Tips For Your Next Auto Purchase article will guide you. From there, you can determine a monthly payment that will fit comfortably in your budget. Our online calculators can quickly estimate various financing options that fit your needs.

What is depreciation and how does it affect the vehicle I purchase?

Depreciation is a decline in value of a vehicle as it gets older due to wear and tear. The amount of depreciation can vary depending on the vehicle year, make, and model. When you purchase a new vehicle, it will lose value rapidly in the first few years but then slowly start to level off. This means that what you paid for the vehicle is no longer what the vehicle is worth. Depending on what your plan is, depreciation may not be a factor to worry about. If you are planning on keeping the car for a while, you will be paying on the depreciation, so it won’t impact you as much as if you wanted to sell or trade it in a few years after purchase.

Is it better to buy a new or used car?

Deciding whether you should buy a new or used car depends on what is right for your budget. When you purchase a new vehicle, it will undergo more depreciation in the first few years than if you bought a used vehicle. The used vehicle will still depreciate, but it will be at a slower rate than the vehicle fresh off the car lot. The advantages to buying a new car are that it will most likely be operationally sound, and if there is an issue, the repairs are typically covered under a factory warranty for a period of time. Additionally, new cars often have new safety and performance features that a used car may not. With a new car, the shopping process can be easier since there is most likely an abundance of the make and model of the car you like, and you don’t have to verify if the car has been in any accidents.

If you choose to buy a used vehicle, you can save a considerable amount of money because the vehicle depreciated rapidly the first few years, making it much more affordable than had you bought it new. Some advantages to buying a used car are lower insurance rates and registration costs, and you can shop well-made vehicles that you may not have been able to afford brand new. However, you should be mindful of what repairs the car might need soon, and ensure the vehicle has a mechanical evaluation before purchase. You should understand any warranties included with the vehicle through the dealership. Unlike a new car, you will not know the full history of the vehicle, so you should request a vehicle history report from the dealer to know if the vehicle has been wrecked or undergone any title changes.

What is the difference in a co-applicant and a cosigner?

A co-applicant is an additional borrower on the loan, typically a spouse, for a joint purchase in which both applicants are liable for the loan. The co-applicant allows for additional income to be considered to more easily meet debt-to-income standards.

A co-signer is typically included on a loan when a borrower does not qualify on their own due to good but limited credit. Since all co-signers are 100% responsible for the loan repayment, even if a co-signer does not directly benefit from the loan or own the collateral, a co-signer should be utilized cautiously and be someone with whom you have an established relationship.

How can I add a co-applicant or cosigner to my loan?

Co-applicants and cosigners are added at the time of application. If you are applying online, there is an option to add an additional applicant. If you are applying in person or by phone, make sure to let the banker know you are wanting to add a co-applicant or a cosigner.

What does it mean to be "upside down" on my auto loan?

When you are “upside down” on your auto loan, you owe more on your loan than what your vehicle is worth. This is also known as negative equity. If your budget allows it, a possible solution is to apply more funds to the principle of your loan in addition to your regular monthly payment. 

Can I pay off my car loan early?

Yes, you may pay off your INTRUST loan early with no penalty fees. You can do so by paying more than your minimum monthly payment, making additional payments over the course of the loan, or applying a lump sum to your loan balance. Your loan documents will provide detail on how payments are applied. 

Should I refinance my car?

Refinancing your car could be beneficial if you are wanting to make changes to your loan, such as lowering your interest rate or lowering your monthly payment. If you have a high interest rate and believe you can get a better rate now versus when you got the loan, you could save more in interest as long as you do not extend the length of the loan too far out. If your goal is to lower your monthly payment, and you are okay with extending out your loan term, refinancing could be a good option. Lengthening your loan term may result in you paying more interest over the life of the loan.

To apply for an INTRUST Bank auto loan, visit our online application or apply by phone at 316-383-1234. Visit our auto loan calculators to help you estimate how much you could finance and the approximate payment amounts.

If you have additional questions, contact us at 316-383-1234. Representatives are available Monday through Friday, 7am to 8pm and on Saturday from 8am to 6pm. To reach our 24/7 automated phone banking, please call 1-800-895-2265.