For many people, applying for a car finance is a bit of a mystery. Most people just fill out the necessary paperwork and hope for the best without understanding what the financiers are actually looking for. In reality, the approval process for a car finance is not that complicated.
Financiers base their decision on just a few pieces of information within an application. The process is pretty much the same whether someone is looking for a new loan or looking to refinance a car loan. By understanding what financiers look at, it’s easier to take steps to improve the chances of getting a loan.
Perhaps the most important part of an application is the applicant’s credit history. This is a record of how a person handled paying off debts in the past. Financiers look for applicants with strong credit histories because if someone was responsible in the past, chances are they will be responsible with their new car loan.
For applicants with a weak or no credit history, this can be problem. In this situation, one way to get approved is by getting someone else with a better credit history to co-sign the application. Another option is to apply for a car loan that does not look at credit history, like a low doc car loan.
Personal and Work Information
A car application also requires some basic personal and work information. An applicant needs to be able to prove who he is with a photo ID like a driver’s license or passport. They will also need to show proof of their home address, say with a utility bill, so that financiers will know where to send bills.
In addition, an applicant needs to show that they are earning enough income to pay off the loan. Most financiers are ok just seeing a recent payslip or bank statement. Occasionally, they may ask to talk to the applicant’s employer.
Lastly, the applicant will need to describe the terms they want for the loan. They would need to list how much they want to borrow for the car, whether they are making a down payment and for how long they want to borrow the money for. Financiers will use this information to set up the loan and decide whether the applicant will be able to handle repaying the loan. A complete car application contains all these pieces of information. If applicants qualify in all these areas, chances are they should qualify for a fair loan.
This article is provided by Platinum Direct Finance – a leading car finance company in Australia. Platinum Direct Finance offers loans for people who wish to purchase assets including boats, planes, trucks, forklifts, office equipment and vehicles.