New automobiles attract new credit responsibilities. This article shares tips on what you will require when planning for auto loans in Elmhurst.
The first big purchase that most people make is buying a car. For many Americans, you cannot pay cash for such a purchase. You may want to consider a car loan and maybe wonder about the basic qualifications for a car loan. You will need to have the following in hand to qualify for a car loan and make your dream car a reality.
Proof of Identity and Residence
If you are applying for a car loan at a credit union or a bank that you already have a relationship with, then this may not be necessary. However, you will be required to provide proof of your identity and residence if you are working with the lender for the first time. A utility bill or a state or government-issued photo ID should be adequate for proof of identity and address.
Proof of Income
Most lending institutions prefer somebody who has a steady monthly income. Lenders want assurance that you can afford to pay back what you borrow before they approve your loan. Your bank statement or pay slips are usually enough proof.
A Good Credit Score
It is important for you to have a good credit score for you to qualify for a car loan. A “good” credit score is determined by the lending institution’s scoring system. Lenders may approve your car loan even if your credit score is lower than the ideal credit score, but they may have to require a co-signer with a strong established credit or charge you a higher interest rate.
A Down Payment
Making a down payment can make you qualify for a loan and attract a lower interest rate. Lenders prefer borrowers who are ready to make down payments because it makes loan defaulting a rare occurrence.
