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What are some common misconceptions about applying for an auto loan? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Gurpreet Singh, General Manager of Auto Loans at Credit Karma, on Quora:

Financing a car can feel like a daunting task, but it doesn’t need to be. Do your research and arm yourself with the information you need to make smart decisions, and to not fall into any traps. Debunking common misconceptions around securing an auto loan is a good starting point. Some include:

You don’t need to shop around. Comparison shopping allows you to get the best deal by weighing a few different quotes, which sometimes results in negotiation power. When you’re weighing your different options, focus on how much you’re paying in total, not just each month. Account for fees, interest and a down payment.

Getting pre-approved from multiple lenders will result in multiple credit dings. Some lenders will do a hard credit pull in order to approve a consumer for a loan, however, that doesn’t mean your credit will be dinged multiple times. The trick is to shop around within a two-week period as lenders should be aware that multiple applications for a car loan within a set period of time means the consumer is shopping around. However, stay diligent and check your credit regularly to make sure nothing slips through the cracks.

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Getting approved for an auto loan means you can afford the car. Getting approved to borrow a set amount for a new car is an important step in the car buying process, but make sure you can actually afford the full cost of car ownership. Beyond budgeting for a down payment and your monthly loan payments, you’ll need to ensure you have money set aside for auto insurance, maintenance, repairs and record high gas prices. Next, think about other financial responsibilities you have on the horizon to ensure you have enough money set aside to cover bills and necessities.

You cannot get an auto loan with bad credit. While getting an auto loan with bad credit is attainable, generally speaking, the lower your credit score, the higher interest you’ll pay. My leading recommendation for those with poor credit in the market for a car would be to postpone your purchase until you can get your credit up, but knowing that having a car is a necessity for so many people, there are a few things you can do:

  • Save for a bigger down payment as that will decrease the amount you’ll need to borrow, and therefore you’ll pay less interest.
  • Apply with a co-signer who has a solid credit history.
  • Shop around for the best possible deal and research lenders that market to consumers with bad credit. Credit Karma outlines a few options that are worth looking into.

If a dealer says they will pay off your current auto loan before financing a new one, be skeptical and ask questions. One dealership tactic to be cautious of is some dealers may try to mislead you by advertising that they will pay off your auto loan, before financing a new loan, but they actually just fold the negative equity into your new car loan. This can also put you in a situation where you are borrowing more money than your new car is worth, which puts you at a high risk of being upside down on your loan.

This question originally appeared on Quora – the place to gain and share knowledge, empowering people to learn from others and better understand the world.

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