If you’re looking to purchase a new car in Australia, chances are good you’re planning on doing so with the help of a car loan to help you cover the costs. If you this is the first time you have ever sought after a car loan, you may be wondering how to best approach getting the right loan, or what you will need to get the best loan available to you.
The quality of loan you are able to get in terms of interest rate depends on a few factors such as how much you make, how expensive of a car you are looking to purchase, and what your credit history is like. That being said, how you get a loan is fairly similar across the entire car loan marketplace.
It can seem like a fairly complicated task to gather everything you’re going to need to apply for a car loan. Luckily, all the steps have been broken down and explained so that you can confidently begin the process of applying for a car loan.
The Standard Requirements
Before getting your application together you’re going to want to gather everything you need for your loan. That includes having your driver’s license and expiration date. That will get the process started. You will also be asked to offer address verification.
Once the initial application has been completed, you will be asked to hand over quite a handful of other documents will be required to continue on.
In order to continue the application process you are going to be asked to provide proof of income, and proof of responsible borrowing in the past – this means going through a credit score check.
The following is a breakdown of all of the types of documents that might go into a lender looking into your finances.
- Proof of Income: You’ll need to show at least two recent payslips to prove what your consistent income in. This will help your lender figure out whether or not you can afford taking out a specific loan.
- Bank Statements: Your lender will also likely ask to see statements for any savings that you have. Seeing you bank statements also allows your lender to confirm your income and monthly expenses.
- Assets and Liabilities: You will also be asked to provide information and proof of any of your loans, mortgage accounts, credit card balances, superannuation and investments that you have.
- Current Living Expenses: This includes bills, transport costs, rent or your mortgage amount and so on.
If you work as a self-employed individual, you might be wondering what you’re supposed to do in terms of getting the information necessary in the aforementioned credit score check. After all, it’s rather hard to prove your income if you are self-employed. It’s no great cause for concern, however, self-employed individuals can certainly be approved for a car loan.
If you run your own business or are self-employed, your lender will simply ask for further proof of income so that they can be actually sure that you actually make the amount of money that you claim to make. In some cases, the lender may ask to see other financial documents such as your recent tax returns or notices assessment. Even if you do not have these documents, there are still options available to you.
Information about the Car You Want
If you are looking to take out a secured loan – meaning the car you plan on buying will be used as collateral in the loan – another thing you will typically be asked to provide is information about the car you want.
That information includes the car’s registration number and VIN number, it’s purchase price, and a comprehensive look at your car insurance policy.
Insurance is one of the most important requirements of any car loan application because that insurance protects the asset that is taken as security for the loan. It means that if the asset is destroyed or stolen, you can claim the insurance to pay out the remaining loan balance. This not only helps protect you, but the lender who is giving you the necessary financing to buy what you want.
Why these Documents are Important?
After going over this list, you might be wondering why lenders ask for such a complete look at your financial situations. The answer is actually quite simple. Basically, all lenders want to know is who you are, what you need the finance for, and how you play to repay it.
The loan documents are also needed to protect you from unethical practices by lenders, as well as to prevent fraud.
It may seem like a whole lot of information to provide, but keep in mind that your car loan broker has your best interest in mind. Their number one priority is to get the information they need in order to get you the loan you need to purchase the car you want!
How is Information Protected?
This is an important question to ask without a doubt. Whenever you are sharing your personal or financial information with any institution, it is important to know that your info will be protected.
So, before you share any of your information, you should be confident that the lender you are dealing with online has top-notch cyber security. They will usually advertise what kind of information protecting software they use on their site. On top of that, it is wise to do some online detective work for lending companies to make sure that there are some positive customer testimonials online. That will help you feel even more confident in your borrowing practices.
How to Get Started
Now that you know what documents you’ll be expected to provide in order to qualify for a loan, you may be wondering where to even begin. Luckily, there are a ton of online sources that can help you find the best loan for you. It’s all just a few clicks away!