How to Qualify for an Auto Loan

Tiny car with coins and finance paperwork

Planning to buy a new car in Sacramento? You’ll want to find out everything you can about how to qualify for a car loan first. As long as you collect the proper documentation beforehand and research your loan options, the car-buying process is simpler than you might think! In the guide below from the Sacramento Chrysler Dodge Jeep Ram finance center, we’ll go over everything Roseville drivers like you need to know about qualifying for a car loan.

What Do I Need to Qualify for a Car Loan?

If you’re feeling uncertain about how to qualify for a car loan, it helps to break the process down into steps. First, you must provide the lender with documentation that proves your ability to repay the loan. If you prepare these documents before and bring them to the dealership, qualifying for a car loan will be faster and easier:

  • Proof of Income: Before extending an offer, the lender needs to see that you can afford to keep up with the loan payments. Generally, the past three months’ pay stubs and bank statements should suffice.
  • Proof of Insurance: Most states require you to purchase liability insurance along with your vehicle. You can purchase insurance at your dealership, or take care of it before you apply.
  • Identification: Your lender will need to see several corroborating documents that prove your identity. Bring a recent utility bill in your name, along with a photo ID with an address that matches the one on your bank statements.
  • Proof of Residence: A current utility bill in your name should be enough to prove to the lender that they’ll be able to contact you if needed.
  • Trade-In Title and Registration: If you’re trading in an old vehicle, bring the title and registration to prove ownership.

Do I Need a Good Credit Score to Get a Car Loan?

Many Folsom car-buyers assume that a bad credit score bars them from qualifying for a car loan. Actually, it’s possible to get car financing with a bad credit score—a good credit score just makes it easier. For one, you’ll be able to secure better loan terms and a lower interest rate. You’ll also receive offers from more lenders.

Keep in mind that lenders may differ on what number constitutes a “good” credit score. Still, a good credit score and positive credit history will earn you a lower annual percentage rate (APR) no matter where you apply. Here’s how to get a car loan with bad credit:

  • Leave extra room in your budget for higher monthly loan payments.
  • Expect to pay a higher APR.
  • Apply to multiple lenders, and be sure to compare offers.

How to Get a Car Loan: Visit Us at Sacramento Chrysler Dodge Jeep Ram!

Contact us to learn more, or get the car-buying process underway from home in Elk Grove with our convenient online buying tools. Pre-qualify for financing, calculate your monthly auto budget, and value your trade-in today. We can’t wait to help you find the new or used car of your dreams!

 

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