If you are thinking about buying a car and having it financed, you might assume that as long as you have decent credit and an income coming in, you won't have a problem getting the vehicle that you want. Although it is certainly true that having a strong credit history and having an income are important, you should know that there are other potential problems that you could run into. These are a few unexpected problems that can prevent you from getting a car loan with many lenders.
1. Being Self-Employed
If you are self-employed, there is a good chance that you have a stronger income now than you ever had when you worked for someone else. However, many lenders get nervous about applicants who are self-employed, particularly if you haven't been in business for yourself very long or if the business that you are involved in is volatile.
It is certainly possible to get a car loan when you are self-employed, but you are going to need to bring in as much evidence as possible of your income. This means that you should gather up several years' worth of tax returns, bank statements that show your deposits and any other documentation that you might have to prove that you are making money.
2. Not Updating Your Address on Your Driver's License
If you have recently moved to a different home, there is a chance that you haven't had your address officially changed with the Department of Motor Vehicles. Although this might not seem like a big deal, lenders like to see current identification with the correct address. Before you go and apply for a car loan, you should change your address with the DMV and get a new ID.
3. Not Bringing Proof of Residency
You might think that a driver's license that has your current address on it will be sufficient, but many lenders require that you bring in additional proof of residency. This is to establish that you live where you say you live. You may need to bring along a current utility bill or a current copy of your lease or mortgage statement before you can qualify for a loan.
Some lenders can be particularly tough when it comes to getting a car loan, but avoiding these issues can help you prevent any unexpected problems with car loans. Then, you can qualify for the loan that you need to buy the car that you want.
Share16 September 2015
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