Car Loan Application Paperwork forms a large part of the auto loan process and we talk about it a lot here on our blog. But what paperwork do you need to apply for an auto loan? What works as proof of ID or of income?
Our Mississauga auto loan experts explain.
Car Loan Application Paperwork
There’s a lot of paperwork involved in applying for auto loans. Sometimes it isn’t actually paper, but the administration involved in the process is exactly the same.
We need paperwork to prove your claims within the loan application. The lender doesn’t know you. They don’t know us. So, we need to back up our claims with evidence.
Those claims will be your identity, your address, your income, any savings and any outgoings.
Anyone could say anything on an auto loan application so your paperwork proves what you say is true. It’s not personal, it’s just business.
Proof of ID and address
First and easiest car loan application paperwork, is proof of ID and your address. This is used to verify who you are, to cross-check your credit report and to help prevent fraud.
Lenders are understandably cautious about handing over large sums of money to people they don’t know, so proving your ID is essential. You can use your driver’s licence and/or Canadian passport to prove your identity.
Most lenders prefer the driver’s licence because it also shows you’re entitled to drive the car you’re planning to buy.
For your address, a couple of bank statements, tax returns or other official paperwork showing your address should work.
Proof of income
Proof of income will reassure the lender that you can afford to repay the loan and that it won’t expose them to undue financial risk. Lenders like to see a stable income to satisfy the affordability criteria too.
For employed people, three months’ worth of salary slips, stubs or statements will usually suffice. If your bank statements also show your salary, all the better.
For self employed people or contractors, you’ll need to provide your business bank statements and your latest tax return. You would typically need 3 months’ worth of these but may be asked for more if your work is seasonal.
If you have income from other sources like investments, pensions or rental, any official statement of income or rental agreement showing the monthly amount will do.
Proof of savings and outgoings
Not all Mississauga auto loan applications will require that you show your outgoings but some will. If affordability is deemed marginal, i.e., the lender considers it a close run thing that you can afford the loan, they may ask for a little more detail around outgoings and any savings.
Bank statements will work here. As long as they show your household outgoings and/or savings, they should be fine.
Proof of savings would only be relevant if you wanted them taken into account in the application. Otherwise, what you have saved is nothing to do with the lender.
If you’re considering applying for an auto loan in Mississauga, we can help with all the paperwork. Just contact our team and we can take it from there.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!