Are you planning to upgrade your current vehicle? Applying for a car loan can seem daunting and stressful if you are not well-prepared. But when you are armed with the appropriate documents, you improve your chances of getting speedy loan approval. That is why in this article; we would like to share the key documents you need to prepare before you apply for an auto loan.
Why Are Documents Important?
Documents are essential in any loan approval process. Lenders check and study them to ensure that the applicant has minimal credit risk and has the capacity to repay the loan. But it takes more than just your credit score to truly determine if you qualify for a loan.
They also require identification and other things to determine factors like the total loan amount that they can lend you, the repayment terms that are best for you, and so on. If you wish to understand more about the importance of getting the right documents, we highly recommend taking the time to read the following.
1. Credit and Banking Documents
There are three credit reporting authorities in Australia namely Experian, Equifax, and Illion. Most lenders will look at your credit score in reference to any of the three credit reporting agencies’ credit scoring systems.
One of the first things that lenders will do is to review your credit history. This involves the type of credit accounts you have, the date you opened them, the credit limit or loan amount, account balance and other banking histories.
However, you can also work with agencies like Nu-Age Loans that give auto loan options for applicants with less-than-ideal credit history. If in doubt, it is not a bad idea to talk to a lending representative. Seek consultation on which options you can take if you are worried about your credit history.
2. Identification Documents
Before lenders can pull your credit, they would need more information about you like your identification. But aside from pulling credit, proof of identification is also a mandatory requirement by federal law. This is to ensure that the applicant is who he or she claims to be and not just going under a different name.
Most lenders will require at least one proof of identification like a driver’s license, passport, and other government-issued I.D. This process can also vary depending on which type of auto loan you are planning to apply for.
3. Proof of Residence
Federal legislation requires lenders to also ask for information on your residence. You will need another document that will match the address on your driver’s license, for example. This can be easy enough if all your information matches up. But if you have recently moved, then you might need more proof of residence to support your claims
You can present your latest utility bill, mortgage statement, lease agreement, bank statements, insurance statements, and so on. Post-office box addresses might not be accepted since only a physical address is acceptable.
4. Proof of Income
Having a steady stream of income would definitely increase your chances of getting your application for car loans in Perth approved. Prepare your most recent payslips and if you have just switched to a new job, don’t worry too much. Lending agencies like Nu-Age Loans have car loan options that can take this into consideration.
5. Proof of Insurance
Lenders require the vehicle, if being used for security on the loan, be comprehensively insured. If you are covered, then bring the supporting documents. If you do not have an existing coverage, you might have to work with an insurance company to secure it.
If you do not want to go through this extra step alone, you can also work with agencies that can handle this for you. The loan brokers at Nu-Age Loans can study your existing documents and advise you on the next steps. They can connect you with insurance companies, so you are well-guided in the process.
6. Vehicle Information
Auto loans are not limited to brand-new vehicles as you also have the option to purchase used ones. If you are planning to go for the latter, then you will need to prepare information on the vehicle that you plan to purchase. Car dealers are bound by law to be as transparent about the vehicles they are selling. You, as the buyer, will have to do your own due diligence in terms of gathering information.
7. Registration of Existing Vehicle (for Trade-In)
There are also trade-in options available when you apply for auto loan. If you are planning to do this, you will need documents like its title and registration papers. In the case when these documents are not available, then you can present any other documentation that can prove its value. This can affect how much financing you will be granted, so make sure you bring these documents with you.
The items listed here are highly generalised and may be subject to variations. Documents required to apply for an auto loan will be different from one lending company to another. The best thing to do is to enquire first with the agency that you wish to work with.
Apply for Auto Loan with Trusted Broker, Like Nu-Age Loans
Nu-Age Loans is a financial solutions provider offering services like auto loans and many others. We understand how intimidating loan applications may seem. We can guide you through the complex parts, so you can apply with convenience and ease.
If you are interested to find out more about our auto loan options, feel free to contact us today.