When anyone wishes to buy a car on finance, they have to go through several checks in order to ensure that they are eligible to apply for finance and have the means to make the repayments.
Although it is generally a straightforward process, there are a lot of details that you should be aware of that you will need to provide.
Knowing in advance what these checks are will help make the application more streamlined and less stressful for you, as well as allow the lender to come back with a decision more quickly.
Do you have a car on finance? Discover your equity position today and see if you can switch or save money on your deal.
There are several different types of car finance available but the process in which your information is screened is the same no matter what type you go for. Below, we list all of the things you should expect to be asked for.
Proof of identity and personal details
You will need to prove who you are if your application is to proceed. You can do this by providing copies of your driver's license and passport.
Some lenders will suggest their preferences about what you should provide, so ensure to read their requirements carefully before your submission.
As it's car finance you are applying for, most lenders will expect you to have a valid license. If you are unable to provide this, the likelihood is your application will be rejected.
The company will also contact the DVLA for additional evidence that you have a registered license.
Address and address history
Lenders will not only want to know your current address but also anywhere else you may have lived in the previous three years.
They will need to know exactly where to send any future correspondence to you, as well as where to find you if you fail to make a repayment. Not only that but if you have lived at multiple addresses in a short span, this may cause a few red flags.
Proof of income
You will be asked for your proof of income so that a lender can be certain that you can afford to take out the loan and make any future repayments.
Most providers will accept the last three bank statements, as well as the last three monthly payslips from your employer.
Not only will they check that you can afford to take out the loan, but that it won't leave you stretching yourself each month and not being able to afford other things.
Credit score and history
Lenders will scrutinise your credit history so they know you are trustworthy and have a good track record of making repayments on time. This will help them to determine how much to lend you.
The better your credit score, the more likely your car finance application will be approved.
Employment details and history
Like your address, lenders wish to know your last three years of employment history to get a good understanding of whether you can hold down a position and that you have a regular source of income. This proof will also need to include your job title and salary.
Do you know your car's equity position? Sign up today to see your car finance deal in full and how Car Credible can help you regardless of your position.
The time it takes to be approved
It's quite a quick turnaround and you should expect to know if you've been approved within a day or two. Once checks have been completed, you should expect one of three results to happen:
- You've been approved - once this is confirmed, your required funds will be released to the broker.
- You've been rejected - this is as a result of the lender deeming you to be too high risk to offer you a loan.
- More information is required - you may need to provide additional details to help support your application.
Before you start your application, ensure you have all the relevant documentation required to help the process be as seamless as possible. Once you've got everything sorted and have been approved, you'll be free to drive away in your new car.