Taking out a loan for a car can seem like a daunting task. You’re probably wondering what steps to take before applying for finance, so that you can purchase the car of your dreams knowing you will be able to pay it off comfortably over a set period of time.

In this article, we’ll outline 5 steps to take before applying for finance to ensure you are well informed.

  • Step 1: Understand your credit score

You’ve surely heard of this one before. Your credit score is an integral part of any loan process, especially when purchasing a car. If your credit isn’t the best, you may feel like there’s no way that you will ever get approved on a loan. However, there are a few steps to take before applying for finance that you can do to help boost your credit.

You can check your credit score online free of charge! Many credit reports have errors that go unnoticed simply because individuals never investigate the situation. Be an advocate for yourself and if you have any errors in your credit, get them corrected! You’ll want to consciously think about your credit during the car buying process. This means avoiding hefty credit card charges, not applying for additional credit cards, and paying your bills on time.

  • Step 2: Consider your ‘must-haves’ and ‘nice-to-haves’

As you are probably aware, asset finance is not a “one size fits all product” and you should consider your ‘must-haves’ and ‘nice-to-haves’ before applying for finance. Think about what matters most to you and what will suit your current needs and circumstances. Would you like to be able to make extra loan repayments, add on insurance, or a warranty?

Make a list of your ‘must-haves’, which are things you can’t do without and your ‘nice-to-haves’, which are things you could do without. Thinking about these features beforehand will give you the confidence to know exactly what you want to do with your loan.

  • Step 3: Using a Finance Broker

It’s a question that everyone asks when they need finance – do I go through a dealer, my bank, or a finance broker? One of the advantages of using a finance broker is that you will have access to a range of lenders and loans, and won’t be restricted to a single option as is the case with most banks. There are a number of reasons why it’s worth doing your homework and choosing a finance broker:

Time: Going through the process of finance can be tiring and frustrating. A finance broker does all of the hard work by comparing finance products for you – without multiple hits on your credit file.

Variety: Finance brokers are associated with a number of bank and non-bank institutions and are able to access a variety of lenders and products.

Knowledge: Finance brokers deal with lenders daily and work with you to find the best finance solution for you – not the lenders or banks. It’s their aim to find their customers the best interest rate and lowest repayments inclusive of all rates, fees and charges (such as, bank establishment fees and account keeping fees).

  • Step 4: Pre-approval

Getting finance pre-approved is a great way to start the car buying process, because you will know exactly how much you can spend and what you can afford within your budget. Once you have finance pre-approved, you can go shopping to purchase your next car – either from a dealership or a private seller.

After you have agreed to purchase the vehicle, simply let your Finance Specialist know the details and they will obtain all relevant documentation they need from the seller to finalise the loan and submit it to the lender for settlement.

  • Step 5: It pays to compare – and to limit enquiries

As mentioned, a finance broker has access to many lenders and in turn provides a larger choice of loan products and the opportunity to save money on your car loan. Each time you apply for finance a credit enquiry is lodged on your credit profile. The more separate enquiries that are made, the more marks that appear on your credit profile.

360 Finance will carry out a thorough review of your application before we submit it to any of our lenders for pre-approval. Once your application has been submitted to a suitable lender, the lender will undertake a review of your credit profile as part of their standard processes, which will then leave an enquiry on your credit file.

This check assists the lender to determine the interest rate that they can offer you once they have completed all of the other necessary checks – such as verifying your income and expenses.


Save yourself compromising on your car choice at the dealership and the one size fits all car loan rates from the bank. Enquire online, or get in contact with 360 Finance for a fuss free finance approval on 1300 361 360 today.