How do I apply for an auto loan?
Apply for a Loan
Secured with SHA-256 Encryption
|
Written by
Sara Routhier
|
|
Reviewed by
Joel Ohman
|
UPDATED: Sep 9, 2011
Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.
In order to apply for an auto loan to finance a new vehicle, borrowers must have their basic personal information, often including their driver’s license, a recent bill with their name and address on it and current bank statements. A borrower may also be able to use his or her passport, Medicare card or titles to other vehicles or a home. To apply, a customer will also need to provide proof that he or she has a steady income so that the lender knows the person will be able to make monthly payments. Proof of auto insurance and proof of residence are also necessary information to provide.
In addition to the basic requirements above, an individual’s credit score is an important part of applying for an auto loan. This tells the lender about the person’s financial situation and any paid or unpaid debts he or she may have. For an auto loan (as opposed to some other types of financing) borrowers do not necessarily need a high credit score to be approved because the loan is backed by their car as collateral.
However, what a credit score does determine is the interest rate on your loan – the higher the score, the lower the rate. A co-signer with good credit can also help get a better loan with a better interest rate.
Finally, while a loan can help pay for the vehicle purchase, it will not cover the entire cost of the car; customers will be required to put up a down payment up front.