If you're searching for some help with financing your next vehicle, or you just want to get some more information on how the auto financing process works, you're in the right place! We at Schimmer Used are happy to provide drivers in Mendota, Ottawa, and Rochelle with helpful resources like these.

Below, you'll find detailed answers to some of the most common questions people have about auto financing and auto loans. You'll also find more information about the many helpful financing services we offer. Read ahead to learn more! 

Financing your next vehicle is one of the most important steps of the car-buying process. That's why it's important to have as much information about it as you can. Learn more about your credit score, how financing a vehicle works, and much more below.

How Do I Figure Out My Credit Score?
It's very important to know your credit score. Thankfully, there are several ways to figure out what yours is. One of the most common ways is through a credit bureau. However, hard inquiries like these can lower your credit score. So, your best bet is to use free online credit estimators like the one that we provide right on our website.

Does Leasing a Car Affect Your Debt-to-Income Ratio?
Yes, leasing a car can affect your debt-to-income ratio. Your debt-to-income ratio is how many loans you have and how large your outstanding balances are compared to how much you earn per month or per year. Your debt-to-income ratio can be affected by a car lease because the remaining balance of your car lease will show up on your credit report as debt.
Say you pay $200 a month on your car lease and still have 10 months left. A debt of $2,000 will show up on your credit report. Even though you haven't technically taken out a loan, you're still obligated to pay that to the dealership as per your contract.

How Does Used Car Financing Work?
Used car financing works very similarly to how new car financing works. You have two choices - buy or lease. You can either take out a loan from a lender to pay for the car in full or you can pay for it up-front with cash. Though, the latter option will likely take you a bit longer to do.

As for leasing, you'll need to pick a vehicle that's made by an automaker that allows used car leasing. Then, you'll have to find a dealership that allows used car leasing. This leasing process is the same as it would be if you were leasing a new car.

Can I Trade In a Car with Negative Equity?
Yes, you can trade in a car with negative equity. This won't eliminate the negative equity - it'll simply roll the balance onto your new car loan. However, this will enable you to get a new car when you need one even if you're upside down on your current car loan.
Can My Cosigner Have Bad Credit But Good Income?
The best way to finance a car when you have bad credit is with a cosigner. Unfortunately, your cosigner must have good credit in order to show the lender that one of you is able to make payments on time and in full. 

Does a Preapproval Letter Guarantee a Car Loan?
Technically, you're not guaranteed a car loan with an approval letter. However, there would have to be some drastic changes in your credit or income for a lender to pull their agreement of providing you a car loan. 

Does Prequalifying for a Car Affect Your Credit Score?
No, prequalifying for a car will not affect your credit score. When you apply for prequalification for a car loan, the lender processes your application using a soft inquiry to your credit report. Soft inquiries do not show up on your credit report, only hard inquiries meaning they don't have any affect on your credit score.  

How Long Is a Car Loan Preapproval Good For? 
How long a car loan pre-approval is good for largely depends on where you get your pre-approval from. As a general rule of thumb, a car loan preapproval is good for anywhere from 30 days to 90 days. However, whenever you receive your preapproval documentation, you should double check to make sure how long it'll last. 

What Does Being Prequalified for a Car Loan Mean? 
It's not uncommon for people to mix up being prequalified and being preapproved for a car loan. These two things are actually fairly different. Being prequalified for an auto loan is the first step in the financing process.  

During the prequalification process, you supply the lender with documentation showing your income and debt and they give you an estimate on how big of a loan you can get. Prequalification is essentially a glorified investigation of how big of a loan you can get.

Preapproval, on the other hand, is the second step in this financing process. At this stage, the lender will run a hard inquiry on your credit score to get an idea of your capabilities to pay back the loan they're going to give you.


We at Schimmer Used hope this page has been as informative and educational as you hoped it would be. If you need additional help with financing your next vehicle, we are here to help. We proudly finance all credit types and have access to many lenders and banks locally and across the nation. We also have a network of lenders that specialize in supplying financing to those with "Not-So-Perfect" credit.

You can get preapproved for financing today with our easy and convenient preapproval credit app. Submit your preapproval application through this private and secure app any time 24 hours a day, 7 days a week. In addition to this helpful tool, we also offer a Vehicle Finder that's designed to help you find vehicles that fit your budget.

Shoppers in the areas of Mendota, Ottawa, and Rochelle should get the ball rolling on securing your financing today by taking advantage of our tools. Give us a call today to schedule a time to come in and meet our friendly finance team!