Last Updated on May 30, 2023 by Rose Morah
Are you planning to buy a Tesla through financing?
How hard is it to get approved for Tesla financing?
In this article, we going to answer that and the following questions:
- Can I finance a Tesla through my bank?
- What are Tesla’s financing credit score requirements?
- How to finance a tesla.
- Why Tesla financing is declined.
Additionally, by the end of the article, you will learn how to get the lowest financing interest for your car loan and how to get the loan approved.
- What are Tesla's financing credit score requirements?
- Can I finance a Tesla through my bank?
- Advantages of using either direct bank financing or Tesla financing
- How to get approved for Tesla financing / Why Tesla financing is declined
- What happens if you don’t have a good credit score?
- How to improve your chances of Tesla financing approval / better interest rates
- When will Tesla approve my loan?
- What happens when Tesla approves your loan?
What are Tesla’s financing credit score requirements?
There are no minimum credit score requirements for Tesla financing, but you will need to have a decent credit score.
Can I finance a Tesla through my bank?
Yes. You will need to provide your bank with the all necessary information and provide Tesla with the following details:
- The name of the bank.
- The exact loan amount.
- Lien-holder’s contact information.
See also: Should You Buy Or Lease A Tesla?
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Advantages of using either direct bank financing or Tesla financing
- Direct Bank Financing Advantages
The main advantage of direct bank financing is, you can get pre-approved financing from the bank before you start shopping for a car.
You will hence have your budget ready even before you can start to shop for a type of Tesla that will fit your budget.
- Tesla Financing Advantages
When you decide to buy a Tesla through Tesla financing you get:
- An open loan
- You can choose to go for long-term payment
- Low monthly payments
- Most of the time, it has better rates and it is also flexible for those who don’t have great credit scores.
How to get approved for Tesla financing / Why Tesla financing is declined
The banks normally check your full credit profile including the following;
- Debts and collections.
- Your income.
If it happens that they have doubts or don’t like what they see, they will ask you to put in a deposit.
This is what makes it possible for Tesla buyers to get financing with any credit score. However, the interest rates will vary.
The higher your credit score, the better rates that you will get. But if you have a very bad credit score, your loan may be declined.
To increase your chances of getting a better interest rate, make sure that you pay off your loans before applying for a Tesla loan.
Using the Tesla Finance calculator does not give you the exact figures. It is only meant to serve as a guide for Tesla buyers.
You might also like: 4 Ways To Reboot Your Tesla To Help Fix Issues (Soft & Hard Reset.
What happens if you don’t have a good credit score?
If you do not have a good credit score when buying a Tesla through financing, you need to be prepared for:
- Higher interest rates
You may end up getting higher interest rates because the lenders view you as a risk.
- To apply for a loan with a cosigner
A cosigner is someone who is willing to apply for a loan with you. The cosigner should have a credit score that is better than yours.
Since they are part of the loan application process, this means that you both share the loan responsibilities.
This reduces the risks and gives an assurance to the lender that if you are unable to repay the loan cosigner will be obligated to pay.
I, therefore, would recommend you take this route if you have a very low credit score.
Factors that determine your credit score
- Payment history
Do you pay back your loans or credit cards when you borrow?
And if do, do you always pay back on time?
Late payments could harm your credit score.
- Credit utilization
This is how much of the available credit you are using.
To maintain a good credit score through credit utilization, you will need to keep it as low as possible.
Most financial experts recommend keeping it below 30%.
- When your account was opened
Checking when your account was opened helps lenders know the age of your account.
This also gives more information about your credit history.
If you have an older account, it will be easier to determine your credit score from your credit history.
- The types of credit accounts you have
Lenders do check if you make timely payments on all your credit and loan accounts.
This means that having loans (student loans, mortgages) could affect your credit score in one way or another.
5. How many hard inquiries do you have?
Too many inquiries, more than 6, on your credit report could affect your credit score.
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How to improve your chances of Tesla financing approval / better interest rates
- Improve your credit score.
If you are months away from ordering your Tesla, I highly recommend that you start paying your bills and debts on time.
Additionally, make sure that you have more money in your account. The more money you have in your account, the high your credit score.
- Prepare for a down payment
Saving for a down payment months before your purchase could greatly improve your chances of getting a loan and also guarantee better interest rates.
Additionally, paying upfront helps reduce the amount you will owe the lender hence reducing the time it will take you to fully pay off your loan.
- Explore more financing options.
Before you fully commit yourselves, I would recommend that you do some research and find the best car financing option that best suits all your needs.
Look at what the Credit Unions, banks, and other financial institutions available at your locations have to offer.
When will Tesla approve my loan?
Tesla does not take long to approve your loan. Most of the time your loan will be approved within minutes.
What happens when Tesla approves your loan?
After your loan is approved it will then be valid for up to 2 months.
This means that if it expires before you receive your Tesla, you will have to apply for a new loan.