If you are in the market and serious about getting a new car, don’t just show up on the dealership’s car lot unprepared. Prior to getting a car loan, you need to research what you need to do to get the financing that is best for you. You should want to be in the best position possible to get the lowest rate loan out there.
Most lenders will need to see documentation prior to processing a request for a car loan. But what documents are needed? When you apply for a new car loan, you’ll need certain documents to prove things, such as your income and your address.
Before leaving for the dealership, be sure to have the following with you in case you are asked for it and prevent the process from being slowed down or halted altogether.
- Proof of Income - Most lenders require that you have proof that you are actively earning income to ensure that you can make your car payment. You simply provide the lender with your latest pay stub and a record of your year-to-date income. If you are self-employed, it’s a good idea to bring a copy of your tax returns and a current bank statement.
- Credit Score – It’s so easy these days to get a free copy of your credit score. Did you know that you are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies (TransUnion, Equifax & Experian)? You simply order online from annualcreditreport.com. They are an authorized website for free credit reports
- Proof of Residence – Your lender will need to verify your address on the car loan application. You can make this an easy step by having your driver’s license, mortgage statement, or utility bill with you.
- Proof of Insurance – States laws require that all vehicles on the road have adequate insurance coverage. You should always carry this with you, so having it during financing is a “no-brainer”
- Proof of Identity – With all the documents listed in 1-4, you have this one covered.
- Trade-In Documentation - If you are trading in a car, you will need to have the title and registration papers and any other documents that might help your lender determine the trade-in value of the vehicle.
If you are ready to get a new or used vehicle, you will most likely need a car loan. Having these on hand when you go to purchase your next vehicle can help you get a car loan and decrease any hiccups along the way.
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