Posted on: 6 February 2018
Applying for an auto loan can be a confusing process if you've never purchased a vehicle before. However, the best way to simplify the process is to have all of your paperwork in order. Here are some documents you should consider gathering before you start looking at new cars so you can be prepared to apply for an auto loan.
Proof Of Income
Proof of income is one way that a loan officer will decide whether or not you qualify for a loan. Gather up copies your most recent pay stubs to prove you have steady employment, and place them in a file folder that will hold all of your loan documentation. If your pay stubs are delivered electronically, you'll want to print out copies. Loan officers may have different requirements for how many stubs you'll need to provide, and this number can also differ depending on how frequently you are paid each month. It's also a good idea to provide copies of your most recent bank statements to show that your pay is being deposited on a regular basis.
Credit Card And Loan Statements
Another piece of the puzzle for approving a loan is examining the current amount of debt you hold. A loan officer may run a credit check to look at your overall credit health, but he or she may also want to see copies of your most recent credit card and loan statements to further examine how well you manage your debt each month. Be prepared to sign off on a credit check, and consider printing off your most recent loan and credit card statements so you have them ready.
Proof Of Insurance
Your loan officer will want to know that your new vehicle will be driven safely and in accordance with the law. Providing proof of insurance is one way to do this. If you currently own a vehicle and have it insured, your policy can be transferred to the new vehicle once you take ownership. This means you can simply provide your current proof of insurance. If you don't currently own a car, you can purchase a non-owner insurance policy to use until you purchase your car. Not only will this help secure your loan, but it will also help qualify to test drive vehicles as you shop around. Remember that a dealership won't let you go on a test drive without providing proof of insurance.
If you are applying for a loan at a bank, you may also need documentation about the car you wish to purchase. However, many auto dealerships have on-site financing departments that work with local banks. If you apply for financing at the dealership, the information about the car you are purchasing will be provided for you.Share