What to Expect During the Car Loan Process

You have found the perfect car. The only thing standing between you and receiving the keys is the car loan process. This can be nerve wracking, but it will not be so bad if you are prepared and know what to expect.
The main order of business in this process is the loan application. Whether you are at a dealership or bank you will be given paperwork and asked to fill in a lot of detailed information. This typically will include information about you such as your address, social security number, driver’s license number, your job and any other income sources. Be prepared to show documented proof if necessary. It can also help to have at least one month’s worth of your most recent paycheck stubs with you. You will also need to fill in the names, phone numbers, and addresses of as many as five personal references, so you should have this information available.

Filling out the loan application is where most of your energy will be spent. Once it is completed you just hand it over and sit back and relax as it is processed. There is really not much more you can do. Your loan will either be approved or denied, so it doesn’t do much good to worry. If you are at your own financial institution, such as bank or credit union, your representative will give you the good or bad news. If your loan application is denied they may offer some advice for how and when you can re-apply, and which steps should be taken. If you are at a dealership, the salesperson will give you the good or bad news. They really want to make the sale so they will do everything in their power to get your loan approved, but this may mean terrible terms such as high down payments and high interest rates. They will also generally suggest you try getting a co-signer, such as a parent or other individual with established credit if needed. Once you are approved then the rest of the ownership paperwork for the car can be completed. If you are making a down payment you can then write out a check.

Your experience in the car loan process all comes down to your own financial situation and how well you have prepared for it. The worst situation to be in is one in which you are desperate for the car, because then you may be forced to accept terrible contract terms in order to receive loan approval. However, if you have been planning on buying a car for some time you can take proper steps to prepare. This includes saving up a decent down payment, as well as making sure all of your financial information is in order and available when preparing the loan application. Usually, at the end of a successful car loan process getting the keys makes it all worth it!