What documents are needed to get a car loan?
Car loans are intended loans that are issued for a long period of time. As part of this loan, the bank lends considerable amounts of money and, in order to reduce the risk of non-repayment, financial institutions require the borrower to provide maximum information about themselves. At the same time, there is a standard set of documents that will be required in absolutely any bank, and there are also such papers that are required only by some creditors.
Basic documents for getting a car loan
The main document for obtaining any loan, including a car loan, is a passport. At the same time, passport data such as registration and age of the borrower must meet the bank’s requirements. It is desirable that this document does not contain a criminal record, since the lender may not want to contact such an applicant. In addition to a passport, financial institutions also require a second identity document, which is often a driver’s license for a car loan. At the same time, some banks look at the applicant’s driving experience and compare it with the car that he intends to buy.
The lender can refuse to lend to a person with still wet paint on the rights, if he wants to buy, for example, an expensive BMW. The third most important document is a certificate of income of an individual, which will allow the bank to judge whether the applicant is solvent or not, and what amount of loan can be given to him, without fear that monthly payments will become impossible for him. In order to take out a car loan, the applicant will also need to provide the bank with a copy of the agreement with the car dealership and an invoice for the purchased car.
When the borrower pays the first installment as a prerequisite for obtaining a loan, the bank will also need a check from the seller that the required payment has been made.
Additional requirements of the bank
Often, when making an auto loan, banks require additional documents from borrowers in addition to the main ones. For example, many financial institutions want to see not only a certificate of 2-personal income tax but also a copy of the borrower’s employment certified by the employer, in order to assess how long they have been working in one place. If the applicant works at the last job for less than six months, or their employers change too often, the loan may not be given. Low salary of the borrower or small “spots” on the credit history may prompt the bank to request additional collateral for the loan.
They can act as a guarantor or valuable property, whose owner is the applicant. At the same time, in the first case, the general set of documents is supplemented by a guarantee agreement, and in the second, by an appraiser’s conclusion and a mortgage. If the borrower is married at the time of receiving the loan, the bank may require the written consent of the other half to receive the loan.
A loan for the purchase of a car involves at least one mandatory insurance of CTP, but there are many banks that require borrowers to also purchase a CASCO policy. At the same time, insurance often takes place only in the company that the financial organization cooperates with.
Can I get a car loan with a minimum of documents?
Certificates, photocopies, insurance policies; these documents are so many that some borrowers, having heard their full list, begin to look for a bank where they are not so demanding of papers. It is not difficult to find credit institutions where you can get a car loan only for two documents. It is not a problem to find creditors who do not care about the existence of a CASCO policy. However, it should be remembered that more “easy” credit conditions always lead to an increase in the cost of the loan. For example, a car loan that meets all bank requirements will cost 11-13% per year.
The loan received under the sub-standard scheme will cost no less than 20% per annum. The car loan market now offers programs for every taste, and what is more expensive, time, or your own money to decide for each applicant.