Fundamental Car Loan Requirements You Need to Fulfill

Nowadays most cars are actually bought on loan. Over 90 percent car buyers avail loans. In case you are also contemplating an auto loan for purchasing a brand new car, you could approach car finance firms and banks. Today choosing the vehicle of your dreams has become real easy because of the broad spectrum of choices offered to you from practically every manufacturer. Getting your dream vehicle into your parking lot today is no more a big deal. However, getting a great car loan that offers both favorable terms and best interest rate could be pretty challenging. However, the question of approving your car loans would arise only if you fulfill all the required car loan eligibility criteria. Here are some common criteria you need to fulfill before applying for a car loan.

Proof of Income

If you wish to qualify for an auto loan, first of all, you must prove to whomever concerned that you have a consistent source of income. Bank statements or salary slips are usually, sufficient proof, however, sometimes lenders could be calling up your employers for verification of facts. You could use assets as your collateral for securing the loan. Generally, the car is used as its own collateral.
You could furnish things like credit cards, existing mortgage details, or verification of other loans that are in your name, as they could prove to be really helpful. You also require providing details regarding the car you wish to buy. Other additional items that would be required are a current invoice for your car provided by the dealer, proof of registration & ownership, proof of your car insurance coverage and even the relevant proof of emissions if you are applying for a loan for an eco-friendly vehicle.

Proof of Insurance

You have to present your new car’s proof of insurance before taking out a car loan. You could consider calling from the dealership once you are all set to purchase the car. However, it is a wiser move to keep the insurance ready well ahead of time. If you could get hold of an insurance provider who is ready prior to buy your car, you would be getting quite a lot of time to choose the best car loan interest rate offered.

Proof of Identity

Unless you are dealing with a credit union or bank you had earlier done business with and they know your identity, you would be required to furnish proof of identity. Proof of identity would be requiring 100 points relevant to personal identification. You would be required to show a photo ID preferably with your signature across the picture. Other important documents would be including originals of current bank statements, and current utility bill that is generated in your name for the address present on your photo ID. Other kinds of ID would be including stock certificates, passport ad even Medicare card etc.

Proof of Residence

You are required to show proof of residence in order to qualify for a car loan. It is mandatory on your part to furnish a proof of residence that because potential lenders would require knowing your address so that they could track you in case you stop paying your bills. It is a good idea to furnish utility bills as they are effective in proving your present home address.

Credit Report

You must provide your credit score while applying for a car loan. A good credit score implies loan approval. However, a low credit rate would imply, you must clear up all your credit and pay off all current debts before taking a car loan. If your credit score is above 700, you could grab a car loan for less than 8 percent. If your credit score is 600, you would be required to pay 8% to 10%. If the credit score is 500 or below, you may be compelled to pay up to 20 percent.

Conclusion

You should cater to these car loan requirements for easy and fast car loans. You could acquire a super-fast car loan approval provided you plan accordingly simply by fulfilling the right loan requirements before you apply for the car loan. You must take extra care to present the right set of documents while applying for an auto loan. You simply need to find out exactly what loan requirements are expected by your lender and just ensure that all the right documents are supplied to your lender.