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Do lenders have a minimum amount for car financing?
I bought a car with cash and trade. My final amount owed was $4,800 and my monthly payments were under $100. I signed all the paperwork and drove away. A few days later, the finance manager from the dealership called and said that $6,000 is the minimum amount that the lender will finance. She wants me to come back in, write a new down payment check, and sign the new paperwork. Does this sound right? Or am I being bamboozled?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“That sounds right. Many lenders have a minimum amount they’re willing to finance on used or new cars, so $6,000 doesn’t sound unreasonable.
If you’re worried about what you’re going to pay each month, you could put more money each month toward your car note. This doesn’t actually lower the monthly payment, but it will shorten the length of the loan, effectively having you pay about the same as you would with a lower financed amount.
In the future, see how much a lender is willing to finance or at least shop around, just as you would if you were getting
car insurance
. By doing so, you can avoid any of these surprises.Many lenders do have a minimum amount they’re willing to finance on used or new cars. A minimum of $6,000 doesn’t sound unreasonable.
While it’s unfortunate that you signed all the paperwork and took the car home before the
dealership
realized it, it is fixable. Before agreeing to the new terms and conditions of the loan, be sure you fully understand the agreement and are comfortable with it.
If you’re worried about your new monthly payment, you could see if you can negotiate a lower down payment amount while financing more. By doing this, you may be able to pay down the loan to the original amount of $4,800 or save the extra for your monthly payments.
Don’t forget that your new car needs proper coverage. Use the free
Jerry
app to help you find the best deal. Jerry compares rates from the top 50 companies in under a minute, delivering the best deals to your phone.”View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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