What documents do I need for auto loans? When you want to obtain an auto loan, you need to make sure that you are ready. Your lender will require you to have certain documents ready. That way, they can determine whether they will be able to lend to you.
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Documents You Will Need for Auto Loans
Providing proof of income is essential. Unless you happen to be dealing with a bank or credit union that you have done business with in the past, you will need to be able to prove to the lender you are approaching that you are who you say you are.
All your lender will need from you as proof of identity is a government-issued photo I.D., like your driver’s license or state I.D., a recent utility bill that has the same address as your I.D., as well as two months’ worth of recent bank statements.
Other forms of I.D. that may be considered acceptable by lenders are stock certificates, titles to different vehicles or to a house, or government-issued documents such as a Medicare card or your passport.
Proof of Income
When you decide to get an auto loan, any lender that you approach will want to be certain that you will be able to repay the loan. Your lender may ask you to provide proof of income, this could be your two most recent paystubs. However, if you get a direct deposit then you will need to get receipts from those deposits.
Your lender will want these paystubs because they will be able to have a look at your employment history, how much you have made up to this point, any garnishments that have been taken from your checks, what you pay in taxes, and how long you have been working for your current employer.
If you are self-employed however, then your lender will require you to provide them at least one year’s worth of tax returns. Some lenders may ask that you bring them more than one year’s worth.
Proof of Insurance
Before you are able to take out an auto loan, you must show that you have some form of car insurance. You could call a company from the dealer to get insurance at the time when you want to buy the car, but it is better if you are able to show that you have car insurance beforehand.
Proof of Residence
Your lender will need to verify your address on the inquiry for your auto loan. This is pretty easy to do, though. You have the option of bringing in a recent utility bill that you have received at your current address. Additionally, you will need to show the lender a valid driver’s license.
Vehicle Information
When you want to purchase a vehicle, the lender you choose to work with will want to know as much as possible about your vehicle of choice. The lender will document the vehicle’s purchase price, make, model, identification number, year, mileage, as well as the original title and any liens that may currently be on it.
Other Things You Will Need for Auto Loans
In addition to all the required documents listed above, your lender may still need you to show them that you have one or more of the following eligibility requirements before you are approved for an auto loan:
You Will Need Good Credit
Having a good credit score is almost crucial when it comes to getting an auto loan, and even more so if you want to get an auto loan with a good interest rate. That being said, it is not always mandatory to have a high credit score. If you have someone in your life with good credit and who is willing to act as a co-signer for the loan, then you could forego having good credit.
Down Payment is a Need for Auto Loans
You may not be required to have money to throw down as a down payment when you want to get an auto loan, but it could certainly help your chances immensely. A down payment will give lenders more confidence in you as a lending option, even if your credit is not exactly on the most stable ground at the moment. The more money you could set down, the better.
Trade-in Documentation
Suppose you are planning on trading in a vehicle you already own to help you get a different vehicle. In that case, you will need to show your lender the title. The vehicle’s equity will have a noticeable impact on how much financing the lender may be willing to provide you.
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