Applying for a car loan and going through the entire car buying process may seem like a daunting task, but it doesn’t need to be. By gathering all the required documentation before starting the process, you can save a lot of hassle and ensure the process goes smoothly. When you apply for a car loan, the lender or dealer is going to ask you for a list of documents. To save you time, we created a list of the required documents you’ll need.
Required Auto Loan Documents
1. Proof of Income and Employment
The first thing a lender will want to see when you apply for a car loan is proof of income. Whether you provide a tax return form or a paystub that shows your income as well as a way to contact your current employer. If you’re self-employed, you’ll have to use a tax return form in order to show your annual income. A lender needs to be confident in your ability to be able to repay the loan and without proof of income, they don’t have any assurance
2. Personal Info to Pull Credit Report
Every time you apply for a loan of any kind, you’ll be required to provide detailed information about yourself. The information provided allows the lender to pull your credit report so they can make a decision as to whether or not to approve you for a loan and if so, at what rate. The higher your credit score, the better chance you have of being approved for a loan with a better rate. These details include the following:
- Your full name
- Social security number
- Your date of birth
- Address
- Phone number
3. Proof of Address
When you’re applying for a car loan just telling the lender your address won’t be enough. You need to provide proof that you actually live at the address you provided. This means providing official paperwork that shows both your full name and address. Usually, the lender will ask for two pieces of paperwork that prove your address. A common piece of paperwork used is a utility bill and the other can be a bank statement. If you’re renting, you could provide a copy of your rental agreement.
4. Proof of Insurance
A lender will never approve you for a car loan if you don’t have proof of liability insurance. They will likely want to see that you have collision and comprehensive insurance so that you’ll be able to replace or repair the vehicle in case of an accident. Your proof of insurance document show include your name, the name of the insurance company, NAIC number and your policy number.
5. Vehicle Information
Along with all of the personal information provided, you’ll need to provide vehicle information if you have it. This includes the following:
- The Vehicle identification number (VIN)
- Vehicle make, model, year and trim level
- Any add ons on the vehicle (upgraded sound system or lift kit)
- Current mileage on the vehicle
Tips for Completing a Car Loan Application
- Fill out the application honestly. When you’re completing a car loan applicaiton, it’s critical that you answer all the questions honestly to give the lenders the true and full picture.
- List all your sources of income. As we discussed above, income verification is an important part of the application process so be sure to include pay stubs or tax return documents to prove your income.
- Avoid using outside funding for a down payment. It’s typically recommended to never use home equity or another loan to help make a down payment on a vehicle. Most lenders will want to see you have cash available to make a down payment.
- Read the contract carefully. An auto loan agreement is a legally binding document, therefore its important you understand it in its entirety and read through it carefully.
- Make copies of the contract. It’s a good idea to keep a copy of the contract so you can refer back to it in the future if necessary.
