How to Qualify for an Auto Loan

Qualifying for a car loan is not as hard you may think, as long as you’ve got some basic identifying documents. However, your credit history will also play a role in the terms of whether or not you will be approved for your loan. Continue reading for a basic overview of how to qualify for a car loan. 

What Do I Need to Qualify for a Car Loan?

You will want to start by considering the things that anyone needs in order to qualify for a loan from any financial institutions: 

• Proof of Income: You will first need to be able to prove your income so the lender can determine whether you’ll be able to keep up with payments. Typically, you can bring bank statements and/or pay stubs as proof of income. However, there may be some cases where the lender may wish to contact your employer.
• Proof of Insurance: Not only is insurance required by law, but it is also required to get a car loan. Usually you can purchase insurance at the dealership, but this is also something you can take care of beforehand. 
• Identification: It goes without saying that you will need to prove your identity as part of the process in qualifying for your car loan. While a photo ID is required, you’ll likely need to bring in corroborating documents to confirm your identity. You may want to bring with you a current utility bill in your name or current bank statements with an address that matches the one on your ID. 
• Proof of Residence: It’s important that lenders know they can find you if needed, and in most cases a current utility bill will be sufficient proof of your current address. 

Additionally, if you are planning on trading in your old vehicle to help finance your purchase, you will need to bring that car’s title and registration so you can prove ownership of the vehicle. 

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

Good credit can help you in securing a car loan with more favorable loan terms, however, you will likely be able to get approved for a loan with mediocre or even bad credit as well. What qualifies as a “good” credit score may vary by lender, but having a good credit history can help you secure a loan with a lower annual percentage rate (APR). Don’t be discouraged if you have bad credit, as many lenders will work with you, although you may need a co-signer or be willing to accept a higher APR. 

How to Get a Car Loan: Come to Mercedes-Benz of Lynnwood!

At Mercedes-Benz of Lynnwood we make applying for financing online easy and our finance experts are here to help you secure the loan amount you need for your next car, truck, or SUV. Contact us or visit our finance department to chat in person about securing the financing you need.