Things You Should Gather When Applying for an Auto Loan
Are you ready to buy your next car? Before you stop by the dealership, you will need to come prepared with the proper documentation you will need for your car loan. Here are the things you should gather.
Proof of Identity, Income, and Residence
Whenever you purchase a car, there are a few important things you have to prove about yourself. First, you have to prove your identity that you are who you say you are. Identification you can bring includes a valid driver’s license, passport, U.S. visa, or other government-issued I.D. with your name and photograph.
Next, you will need to prove that you earn enough to afford the car. One or two recent paystubs or a W-2 are usually sufficient. You may also use bank statements as your proof of income. If you cannot provide documentation, the dealer may opt to call your employer to verify employment status and wage.
Finally, you need to prove where you live. If the address on your driver’s license or credit application is accurate, you’re likely all set. However, if you have moved recently, you may need additional documentation such as a utility bill, lease agreement, or mortgage statement.
Credit and Banking History
Once you have proven your identity, income, and residence, you’ll need to show your credit and banking history. With a credit application, the dealership will pull your credit to view debt-to-income ratio, credit score, your current loans, etc. Interest rates and loan offers will vary per customer depending on this information.
Vehicle Registration and Title (If You are Trading In)
If you own a vehicle and wish to trade it in to lower your payments, you will need to bring a couple extra pieces of documentation. Your title and registration will prove that you own the vehicle. In fact, in case of the event that a vehicle is stolen, it is illegal to buy or sell a vehicle without the title.
Proof of Insurance
Did you know that you need insurance on your next vehicle before you drive it off the lot? Not only will having proof of insurance protect you and your car in case you get into an accident on the way home, but having insurance ahead of time will prevent any fines as the protection must comply with state laws. If you are a first-time car buyer, shop around for car insurance quotes ahead of time and purchase it the same day. If you already have car insurance, your insurance provider may offer a grace period in which you have some time before officially adding your next vehicle to your policy. Check with your insurance provider for more information.
Method of Down Payment
Before completing the transaction, you will need to have your method of down payment ready. Whether you have cash, a cashier’s check, or even your debit or credit card, you’ll want to make sure you have enough money readily available. Not only will it help you secure your loan, but it will reduce your loan principal and overall interest as well!