How to Qualify for Auto Financing
- 1). Determine the contact name and number at your job you'll use on your application so that the bank can verify your information about length of employment. In addition, you'll need to figure out your year-to-date income, which banks generally prefer over $22,000 per-year. Find your most recent paystub for proof of income (or two years worth of tax returns for the self-employed); the bank requires this information for the application.
- 2). Find a recent utility bill for proof of residency; an electric, cable or water bill will suffice. Figure out how long you've been at your address. Lenders are looking for a two-year history.
- 3). Determine whose contact information you'll use for proof of residency, such as a landlord or mortgage company --- you'll have to provide this information, as well. You can also expect to provide your monthly rental or mortgage payment, which is not to exceed a bank's preferred debt-to-income ratio. For example, if you make $22,000 per year, you should not pay $1,500 per-month for your home.
- 4). Locate any additional proof of income, such as social security or disability benefits. If you are retired, you must provide proof of any pension payments that you receive.
- 5). Make a list of at least five references. While not all lenders require this, many do, so having the names, phone numbers and addresses of five people who can verify your information can help save time. If the bank asks for this information, and you cannot get it right away (people do not always answer the phone immediately), you'll have to wait until you can complete the reference form before completing a loan.
- 6). Go to the Annual Credit Report website to obtain a free copy of your credit report (you are allowed one free report from each credit bureau per year). Go over your credit information to make sure that it is correct, and if you find incorrect information, fix it before applying for a loan. Otherwise, your interest rate may be higher because of a credit blemish.
- 7). Apply for a pre-approval to ultimately determine whether or not you qualify for a loan. You can apply at a dealership before picking out a car to save time, if you prefer, or at any local bank. Have all of your previously stated information on hand to provide to the bank.
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