Are you ready to drive away in a brand new car?
You’re not alone. Every year, about 15 million new cars find owners in the United States.
When the day arrives, you may be financing it via an auto loan or dealership financing. To ensure you can take it away the same day, you need to know what documents to bring along.
Below, we have compiled a guide to help you on the way. Read on for our help on what to bring for an auto loan application.
1. Auto Loan Proof of Income
No lender would provide a loan without proof of income. They need to know that you have a regular source of funds to pay back the loan. If you can not provide it, giving the loan becomes too much of a risk.
You will need paycheck stubs for auto loan that are less than a month old. This shows that you are still in employment.
Self-employed persons generally need tax returns and bank statements, so loan companies can see the money you have coming in and going out of your bank accounts. These may end up being quite extensive, with some companies wanting around five years of backdated tax or bank statements.
2. Insurance
Insurance is one of the auto loan requirements not just because it is the law, but also because lenders need to secure their loan. If the car is written off and you do not have insurance to replace it, the seller stands to lose their money.
It is possible to get insurance from the car dealer. However, this does not let you shop around for the best deals. Arrange for insurance before making the loan application, or make sure you have adequate quotes ready to go. Either way, you aren’t going to drive off the lot without an insured car.
3. Proof of Address
So that loans are not taken out fraudulently, proof of address is one of the standard auto loan requirements. You can use any utility bill that bears your name and current address. You may also use a valid driver’s license, which you also need if you are driving home.
4. Identification
Identification is needed for the same reason as proof of address. Two months of bank statements, a photo ID with your name and signature, and a current utility bill are needed. Passports and home title deeds can also be used.
5. Credit History
This does not require you to bring any special documentation, but it is something you should be aware of. A lender will look at your past credit ratings and see how much income to debt ratio you have. If your credit score is low, the seller might think you may not be able to pay back the loan, thus reject your application.
Heed This Auto Loan Advice
Many auto loan applications may ask for items you had not even thought about. When attending the loan application, it is best to pack heavy so you have anything that may come up, should they need it.
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