The Auto Loan Process

Understanding The Auto Loan Application Process
Introduction
Buying a car may become confusing and stressful. Even if you have done it several times you can still find the process complicated and intimidating. As soon as the sales contract is signed, obtaining the financing for the purchase becomes paramount for all but a very few buyers. If you understand the steps required to qualify for an auto loan, however, much of the stress can be avoided. The following explanation of the loan application process is intended to help you through the complexities of obtaining an auto loan.

The Loan Application Interview
You may print the application on line or visit one of our locations to obtain an application. Then schedule a meeting with a loan officer to begin the collection of information needed to approve the loan. They will explain the terms of auto loans available to you, the interest rates and fees for each term and the qualification requirements. During the meeting, the loan officer will fill out, or assist you in filling out, the loan application form.
By this time, you should have a good idea of the interest rate and monthly payment amount. The interest rate and term affects the amount of the monthly payment,

Completing The Loan Application Form
The loan application form asks for information on the car you are buying, purchase price, employment and financial history of all loan applicants. The information will be verified and used to make a credit decision, so it is very important to make sure that it is complete and accurate.
You can complete the loan application process much more easily and accurately if you prepare for it ahead of time. A great deal of detail will be asked about your personal finances, including bank account numbers and balances, current loan amounts and payments, and credit card account numbers. You will want to be thorough and precise in your answers, so it will be to your benefit to assemble this kind of information before the meeting with the loan officer.

Details of Purchase
The loan officer will ask for the details on the purchase so it will be beneficial to bring in a copy of the purchase agreement showing the purchase price and any discounts or trade-ins. The loan officer will check the value of the car in NADA to insure the price is worth the value.

Personal Information
The loan officer will want the social security numbers of all borrowers, age, marital status, number and ages of dependents and current address and telephone number. If you have lived at your current address less than 2 years, be prepared to furnish former addresses for up to seven years. You will also be asked your current housing expenses, including rent or mortgage payments. You will need the name and address of your landlord(s) or mortgage lender(s) for the past two years.

Employment History and Sources of Income
Your ability to make the regular payments on the auto loan are primary considerations in the approval process and should be your primary concern. Required information includes:

• At least two years employment history with employer's name and address, your job title or position, length of time on the job, salary, bonuses, commissions and average overtime pay.
• Recent paycheck stubs
  A general authorization form which allows verification of employment and other financial information on the application may be used.

If you are relying on income from other sources, such as rental property, social security or disability payments, child support, etc., you must provide adequate proof of the source. Appropriate documents could include canceled checks, copies of leases, certification of benefits, divorce decrees and similar evidence.
Personal Indebtedness
You will be asked to itemize all of your current bills, loans and other debts, including current balances and monthly payments. Debts include current automobile loans, credit cards such as Visa®, MasterCard® and other retail store accounts, finance company, bank and credit union loans and existing mortgages, including home equity loans. You should be able to give the account or loan number, the monthly payment, and the number of payments remaining and the outstanding balance.
The information you provide on the loan application will later be verified by a credit report ordered by the lender. Like employment and deposit information, differences between your figures and those on the credit report will raise questions and may delay the approval of your loan. It is to your advantage to take time to get your data right prior to filling out the loan application.
If you have had credit problems, you should inform the loan officer. Lenders recognize that unemployment, illness, marital problems or other financial difficulties can temporarily impair your credit rating. Provide a written explanation of the circumstances regarding the problem to be included with the loan application. The lender must consider such a written explanation as part of the underwriting analysis. If the problem has been corrected and your payments have been made on time for a year or more, your credit will probably be judged as satisfactory. Chronic late payments, judgments or loan defaults, however, severely damage your credit standing and may prevent you from obtaining the financing you need to complete the purchase.
If you have been through bankruptcy or foreclosure proceedings within the past seven years, be prepared to give full details and copies of applicable documents regarding them.
You will also be asked to explain the details if you are obligated to pay alimony, child support or separate maintenance. Such obligations are treated like debt payments by most lenders and will be part of the underwriting analysis.

After The Loan Application - What Next?
After the loan application has been completed, it will be turned over to the loan processing department, where the decision to approve or reject the loan will be made. The loan processor will order the credit report.

After the lender has approved the loan, you will be notified by the loan officer and they will set a time for you to come in and close your loan. The loan officer will explain your terms and any other information that may be needed. If the loan does not close within the specified commitment period, the terms are subject to change.