Car loan applications: how car loan applications are processed

Buying a car is a major purchase. To finance it, you can borrow the money from a bank, credit union or other finance companies. Easy and cheap car loans are available in plenty to suit everyone’s needs. Many people like to finance their vehicle through the dealer from whom they purchase their car. Getting an appropriate loan involves careful planning, knowledge and negotiation of the deal that best suits your needs. You might be required to present all the relevant information before applying for the loan. Prompt submission of required details will ensure that your loan is processed swiftly and effectively to avoid any unnecessary delays caused by detailed documentations. The information pertaining to employment and basic proof of income that includes your most recent pay details, the most recent tax assessment form and employer details are generally required during car loans processing.

Proof of identity such as a photo identification card or other form of identification may also be required during car loan processing. Details regarding whether you rent or own your home or apartment, debts such as mortgage loans, credit cards, verifications of other loans held will have to be revealed. Information of the vehicle you are purchasing, dealer invoice, registration papers if any, and proof of insurance must be given.

As part of the car loan application processing, some basic items are taken into account by most of the financial institutions during processing. Generally, the auto loan application process includes a fast, preliminary decision based on assessment of a credit history and a detailed session of signing documents. Sometimes, the application process can be extended by the process of decision making on the part of the lender. As so many factors are incorporated in the final decision and overall terms, the final decision regarding loan approval cannot be made in a short span of time.

A standard loan application form includes questions about your income, assets, debts and credit as well as the vehicle that you want to purchase. There are minimal steps involved for filling out an auto loan application and do not take a great amount of time. However, depending upon the processing terms of the financial institutions, the final answer regarding the terms of loan could take one or two days to finalize.

Once the loan application is processed you will be notified whether you have been approved or not. Most car loans these days are processed on line by a loan processor online using a computer and you will be informed about approval in less than an hour. If you are approved, you will review and sign your loan documents agreeing to pay the lender for the money borrowed. You will give the lender rights to your car if you fail to repay the loan.

Having said the above, the car loan application forms that one uses to seal a financial agreement between the buyer and the lender are a binding document. Any dishonesty on such a form is will most likely be discovered and is illegal.