Five Steps To Qualify For a Car Loan

Five Steps To Qualify For a Car Loan

It’s time to buy your next (maybe your first?) car, and you know what you want, and now it’s time to make that purchase. But you’ll likely need financing so let’s talk about how to get a car loan.

There are a few steps you can take to ensure you’re ready the day you want to bring home that next sedan or SUV that’s perfect for you.

  1. Bring Proof of Income – You’ll need to have proof of income, so bring a few recent pay-stubs or a letter from your employer. If you are self-employed, bring proof such as a previous year’s tax return. In some cases, you may qualify for a car loan without a proof of income, but you will need to speak with the finance advisor to help you figure out in what circumstances this can work for you.
  2. Know your Credit score – Check your credit score online ahead of time, or speak to someone at the dealership about what your score should ideally be to qualify. A history of good credit is ideal but there are still opportunities to qualify for a car loan with lower credit scores.
  3. Prove your Identity – You’ll need to prove your identity to qualify for a loan, so be sure to bring your drivers license and other important identification, like a medical card or credit card with you. You may not need it, but you may want to also bring along a recent utility bill as proof of your home address as well.
  4. Have a Down Payment or Trade-In – To increase your chances of qualifying, having a cash down-payment or existing car to trade-in can help you qualify more quickly, plus this will reduce your monthly payments after the purchase.
  5. Have a Cosigner Ready if Necessary – In some cases, you will need a co-signer, like a spouse, partner, sibling or friend to back you up with credit to qualify. Their credit will also be checked and will have sign papers with you for the loan.

 

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