4 Questions To Ask Yourself Before Applying For An Auto Loan

Getting an auto loan from a bank or credit union is one of the most common ways new car shoppers pay off their purchase. If you’re new to the loan process in Tobyhanna, Scranton, Stroudsburg, or East Stroudsburg, you may be wondering if you have what you need to get started.

Learn who is eligible to apply for an auto loan and discover what it takes to finance your next vehicle.

Do I Have An ID And Proof Of Residence?

The basic requirements for applying for an auto loan start out with providing your driver's license as well as a proof of residence, such as a utility bill or rental agreement to your financial advisor. These documents are used to authorize you are who you say you are and to confirm where you can be contacted if needed.

Do I Have Recent Paystubs From My Job?

The financial institution that ultimately provides you with a loan for your vehicle will want to know that you have a way to pay them back on time. When you provide recent paystubs from your job, they'll be able to see that you have a steady source of income that you won't be stretching too thin when it comes to your expenses.

In their eyes, this increases the likelihood that they'll be returned the money they lend you upfront when the time comes.

Do I Know My Credit Score?

What lenders consider a "good" or "bad" credit score varies a bit. In general, applicants with higher credit scores will be favored by lenders and enjoy lower interest rates while those with lower credit scores will receive offers with higher interest rates. This is because the bank is taking more of a risk in loaning out their money.

While knowing your credit score ahead of time isn't necessarily required, if you know where you stand before you apply, you can better plan for how to work toward strengthening your score, which lenders to pursue, as well as what options to expect. You can request your free credit report from from each credit bureau once per year.

Do I Have A Down Payment?

A down payment, or a lump sum of money put toward the vehicle at the time of the agreement, is another factor that's not mandatory but can help you secure a loan at a better rate. Putting money down isn't only good for lowering the interest rates on potential offers, but you then have less to pay off in the long run. With less money to pay over the same period of time, you can expect your payments to be less from month to month. If you have the wiggle room in your current budget or some money saved up, it's worth the investment!

Am I Eligible To Apply For An Auto Loan?

If you answered "yes" to all four questions above, congratulations are in order: You are eligible and ready to apply for an auto loan today!

If you're seeking assistance with who is eligible to apply for an auto loan and financing your new four-wheeled purchase, in Mount Pocono, Tobyhanna, or East Stroudsburg, PA, you can apply to get pre-approved for financing right online at Ray Price Chevrolet. From Scranton to Stroudsburg, our team is happy to assist you with a wide variety of new and gently used car models as well as affordable auto loans from local banks and lenders.