As someone interested in buying a new car, I know how important it is to find the best auto loan With so many options out there, it can be tricky to know where to start That’s why in this article, I’ll walk you through everything you need to know about getting a car loan from Rocket Mortgage.
What is Rocket Mortgage?
For those who may not know, Rocket Mortgage is an online mortgage company that also offers personal loans, including auto loans They make the process super convenient by allowing you to apply and get approved completely online.
Rocket Mortgage originally called RockLoans first started offering personal loans back in 2017. Since then, they’ve helped thousands of people get the financing they need for various big purchases, like cars.
Benefits of a Rocket Mortgage Car Loan
There are a few key reasons why a Rocket Mortgage car loan may be a good option:
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Fast online process: You can apply online in minutes and get a decision quickly without having to go into a branch.
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Pre-approval: Rocket Mortgage allows you to get pre-approved so you know your budget before going to the dealer.
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Competitive rates: Their rates are competitive with other top lenders. With good credit, you may qualify for a rate as low as 3.99%.
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Flexible terms: Loan terms range from 24 to 84 months. This allows you to choose the monthly payment that fits your budget.
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No prepayment penalties: You can pay off your loan early with no extra fees.
Rocket Mortgage Car Loan Requirements
Here are the basic eligibility requirements for getting approved for a car loan from Rocket Mortgage:
- A minimum credit score of 620
- Proof you can afford the monthly payments
- Monthly income of at least $1,800
- Valid ID
- Be at least 18 years old
- Have a checking account
They’ll also want to see that you have a low debt-to-income ratio, meaning your existing debts take up less than 40% of your gross income.
If you have bad credit, you may still potentially qualify by putting more money down or bringing on a cosigner with good credit.
How to Apply for a Rocket Mortgage Auto Loan
Ready to get started? Here’s an overview of the application process:
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Go to RocketLoans.com. This will take you to their online application page.
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Enter your basic information. This includes your name, contact details, date of birth, Social Security Number, and address.
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Select your loan purpose. Choose “Auto Loan” from the dropdown menu.
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Input your income details. You’ll need to provide your employer, income, and housing expenses.
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Enter your vehicle information. Add the year, make, model, mileage, and VIN number of the car you want to buy. You can get the VIN from the seller.
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Connect accounts (optional). For a faster approval process, you can link your bank accounts for easy verification.
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Review and submit. Double check that all your information is correct before submitting the application.
That’s it! After submitting, you’ll get a decision on your loan within minutes if you connected your bank accounts. Otherwise, it may take up to one business day. If approved, you can then shop for your car knowing exactly what you can afford.
What Information You’ll Need to Provide
To make the application process fast and easy, make sure you have the following information on hand before you start:
- Your Social Security Number
- Driver’s license number
- Employer name, address, phone number
- Two most recent pay stubs
- Bank routing and account numbers (if connecting accounts)
- Details of the car you wish to purchase
Having all this information ready will allow Rocket Mortgage to verify your identity and income. That way, you can get approved as quickly as possible.
Rocket Mortgage Rates and Fees
Now, let’s discuss Rocket Mortgage’s car loan interest rates and fees so you know what to expect.
Interest rates: With excellent credit (760+ score), interest rates start at 3.99%. With good credit (680-759 score), expect rates around 5.74%. And with fair credit (620-679), rates start at 9.39%.
Origination fee: You’ll pay an origination fee between 1-6% of the total loan amount. This fee is lower with better credit.
Late fees: If you miss a payment, you’ll be charged a late fee, usually around $15.
Prepayment penalties: None! You can pay off your loan early with no penalty.
Dealer financing: If you opt to finance through the dealership instead, expect an extra 1-2% on the interest rate. Dealer financing tends to be more expensive.
AutoPay discount: Enroll in AutoPay to have your payments deducted automatically each month. This gives you a 0.50% discount on your interest rate.
As you can see, having excellent credit scores can save you thousands on a car loan with Rocket Mortgage. That’s why it pays to improve your credit before applying.
Tips for Getting the Best Rocket Mortgage Car Loan Rate
Here are my top 7 tips for scoring the lowest interest rate on your Rocket Mortgage auto loan:
1. Check your credit reports – Make sure there are no errors dragging down your scores. Dispute any inaccuracies.
2. Pay down debt – The lower your debt-to-income ratio, the better.
3. Become an authorized user – Ask a family member with good credit to add you as an authorized user on their credit card. This can give your score a boost.
4. Make payments on time – Set up autopay on all your bills to build your credit history.
5. Limit hard inquiries – Each loan application causes a hard inquiry that temporarily drops your scores. Limit applications to avoid too many.
6. Raise your credit limits – Having higher limits with low balances helps your credit utilization ratio.
7. Put more money down – The higher your down payment, the lower risk you are to the lender.
Should I Buy New or Used with a Rocket Mortgage Auto Loan?
One question to consider is whether you should buy new or used when getting a car loan from Rocket Mortgage. Here are the pros and cons of each:
New Car Pros
- Under warranty
- Can customize features
- Lower maintenance costs
- Latest tech/safety features
New Car Cons
- Faster depreciation
- Higher interest rates
- Higher insurance premiums
Used Car Pros
- Lower purchase price
- Lower sales tax
- Lower registration fees
Used Car Cons
- No warranties
- More maintenance
- Higher interest rates
- Fewer tech features
In general, used cars tend to be the more affordable option. However, with today’s competitive new car financing offers, sometimes buying new can make more financial sense if you plan to keep the car long term.
Run the numbers both ways and see which nets you the best overall value based on purchase price, interest rate, loan length, and long-term ownership costs.
Rocket Mortgage Car Loan Options for Bad Credit
If you have bad credit, you may feel like you’ll have trouble qualifying for an auto loan. The good news is Rocket Mortgage offers a few options for those with less-than-perfect credit:
Get a cosigner: Ask a friend or relative with good credit to co-sign your loan. Their positive credit record can offset your lower scores. Just be sure to make all your payments on time so you don’t jeopardize their credit too.
Put more money down: A larger down payment shows lenders you’re committed. And it lowers the amount you need to finance.
Take a loan term under 36 months: Opt for a shorter loan length. The quicker payoff poses less risk for the lender.
Link your accounts: Linking your checking account allows Rocket Mortgage to assess your cash flow, which can help overshadow a lower credit score.
Apply with a co-borrower: Applying with another borrower combines your incomes and credit profiles. This can strengthen your chances if you apply jointly.
Improve your credit: Before applying, work on boosting your score by paying bills on time and lowering debts. Even small score improvements can help.
With a credit score as low as 620, Rocket Mortgage car loan approval is possible by taking some of these steps.
What’s the Best Loan Term for a Rocket Mortgage Auto Loan?
Rocket Mortgage offers flexible loan terms ranging from 24 to 84 months. But what’s the ideal length to opt for? Here are a few things to consider:
24-36 months – Lower interest rates but higher monthly payments. Best if buying an older used car you plan to pay off quickly.
48 months – Balance of lower monthly payments with reasonable interest rates. A common term length.
60 months
Before You Apply For A Car Loan
Total Paid Over 60 Months
Loan Balance Over Time If you increase your monthly payment by … Please enter a value between $0 and $1,000.
… youll save $0 in total interest This auto loan calculator estimates a monthly payment based on the loan amount, term, interest rate and additional payments that you input. You can then change the loan amount, interest rate or repayment term to see different options. Calculated payments and savings are estimates only, as your actual rates and payments may differ from the estimates provided by this calculator as a result of qualifying factors. This is not a commitment to lend.