Earlier today I went live on Facebook to share some basic car loan knowledge. The info was given to me by the wonderful people at Marine Credit Union in Chippewa Falls. Below I will share the cliff notes of the live video.
Things to have ready when you are shopping for a car and will need a car loan.
Before you even go to a car lot, have the rough amount you want to spend on a vehicle already set in your mind. Know what kind of car you are looking for and how much you want to spend. Once you have that amount set, save 10%. If you are looking to stay in the $8000 range, $800 is what you will need for a down payment.
Insurance is something you must take into account in your budget. Generally, anything under $2000 will only require you to have Liability Insurance. Anything over that $2000 mark will require you to have full coverage.
Now 8 times out of 10 it will be easier to get a loan with your current financial institution. With your current bank, you have a relationship built and they have most if not all the required info already. Sometimes, though, your current bank is not able to help you procure a loan and you will need to have this info available.
- Have your Driver’s License. Something that the law requires us to have on us whenever we drive is a must for any car buying experience. Not only to have for loan applications and car purchases, but also for if you want to even take that car out for a test drive. Here at Humble Beginnings Auto, we REQUIRE a copy of your driver’s license before any test drive.
- The last month of your pay stubs. Two if you are paid bi-weekly. Four if you are paid weekly. Copies are fine.
- If you are self-employed you will need to have your last 2 years of tax returns ready.
- The 10% I spoke about earlier? Here is when it will be needed. Each bank is different but 10% is a base amount.
- If you have no credit or all negative credit (If you are working on getting a loan through Marine Credit Union) you will need to have the last 6 months of bank statements at the ready. If you are planning on buying a car this coming tax season and you only use money cards to pay for everything, now is the time to go get a bank account. Not only will it give you the requested 6 months of statements, but it will also start that bank relationship for future loan applications.
There are a few situations where getting an auto loan will be almost impossible. You won’t be able to get an approval for a loan if you have any of the following:
- Open Judgement. An example of an open judgment is if you are having your wages garnished to pay for anything in collections or having your assets seized.
- Liens. A lien, such as a child support lien, will keep you from getting most any loan.
- If you are currently in the middle of Bankruptcy. Bankruptcy is a tedious, long, and difficult time. It can happen to anyone for numberless reasons. If you are in the current working of your bankruptcy, it is in your best interest to no even attempt to get any loan. The bankruptcy will need to be complete before you try to get an auto loan.
Here are the basics. If you have any questions just shoot us a message on here, on our facebook page or even just drop on by.
If you are looking to get pre-approved for an auto loan, please contact Sandra Erickson at Marine Credit Union 715-461-6327. Or call your current loan officer at your financial institution.