When you are ready to purchase a car, the last thing you want to do is spend a lot of time getting the right loan. Fortunately, there are a number of things you can do that can make getting the right car loan both faster and easier. No matter what your credit score or credit history looks like, these 5 tips can help you streamline the process, saving you both time and money:
1) Be both honest and accurate on your application. When you fill out a credit application, it is sometimes necessary to list any former residences, employers, or other identifying information. If the information you list is correct, your application will be processed quickly. However, if you do not tell the truth about your own credit, it will cause problems with your application. After all, many lenders utilize specialized validation software to check the data you enter against national databases. The best case scenario is that lying will slow down the application process. The worst scenario is that your application will be rejected due to the errors.
2) Get organized. Before you apply for a loan, it is important to gather all the paperwork you will need. For instance, your most recent pay stub will be necessary to prove your income, and you will also need your most recent utility bill to verify your residence. You should also have a valid drivers license, as well as proof of insurance if you have it. Also be aware that if you do have any credit problems such as bankruptcy or bills in collections, you should also bring proof of these issues. When you go to see the lender, bring all this paperwork in one envelope so that you are fully prepared.
3) Bring a list of your personal references. Many lenders who offer auto loans require the name, address, and phone number of three or more people who do not live with you. It is a good idea to bring this information along when you apply for the loan so that you have all the important information at your fingertips. Even if this information is not required online, it may be required when you sit down with your lender or dealer finance person to finalize your loan.
4) Tell your employer that you are applying for an auto loan. Often, during the application process, the lender will call your employer to verify your job. Notify your boss or office manager in advance that they may receive an employment verification call about you. If they have been in the workforce long, they will be used to such calls and it should be no imposition for them – it’s simply something that comes with being a manager.
5) If you plan to trade-in a vehicle, know your exact payoff amount. Often, when people apply for financing, they only provide an estimate of their trade-in payoff amount. However, the lender needs the exact value to issue a loan and may use your estimate for this value. If it turns out that your payoff is actually higher than you guessed, you may need to have your loan approved again for a higher amount. If your payoff is actually lower than you thought, your interest rate might be unnecessarily high. You can save yourself these problems by knowing your exact payoff amount in advance.
If you use these five tips when you apply for credit, the application process will go swiftly and smoothly.