Car Loan Application: a Breakdown

In our previous article on auto vehicles, we discuss the various ways you can go about obtaining a car. Of all the options, we champion financing through a financial institution. This cuts out the dealership playing middleman, allowing you to rely on the rapport you’ve built with your banking institution. Let’s say you’ve chosen that route; what’s next? The answer is a car loan application.

With so much going on it may feel a bit daunting trying to take this on. But we assure you, with the proper preparation, you’ll be just fine. Read on for more information.

Establish a Good Starting Point

The first step is having your finances in order prior to purchasing your car. Having solid cash reserves is great for planning ahead. Or, at the very least, you’ll want to know you have the income coming in to justify these new expenses.

There’s even a quick formula for predicting your monthly payments, in an effort to plan ahead. Take the full value of the vehicle, subtract whatever upfront figure you choose to put towards it, then divide that by however long the life of the loan is. You’ll also want to account for interest rates when factoring everything in.

What Documents Will You Need?

You’ll also be asked to provide a great deal of documentation, all of which is mandatory to proceed with the loan. First, you’ll need to prove who you are and where you live; your license is a great option. You can also use bills from your home or living arrangement as a means of verification.

You also won’t get too far ahead without solid car insurance, or manageable credit and a history of employment. Be prepared to share all of this before securing your loan. Lastly, you’ll want to have proof of income on hand. Tax documentation, receipts from payment remittance, and more are of great value here.

Don't Put Your Eggs in One Basket

The final step is here: it’s time to apply. But be sure not to limit yourself to only one funding source. Apply to several, and compare and contrast their benefits and disadvantages. This is the only way to have a clear perspective of the options in front of you.

What Happens After Applying?

Once you’ve made it past the application stage, it’s time to finalize the agreement. Be sure to thoroughly review your contract before signing. From here, the next step is ensuring that your monthly payments are consistent. You can either mail your payment in, pay via your banking institution’s website, or have the payments auto-debited out of your account for the duration of the loan.

If your income allows, the latter option is the best as it helps to keep payments on track even if you have a lapse in memory. But, be careful here. You’ll want to avoid any overdraft fees, as this can lead to a late payment and fees from your bank.

Banking with Newton Federal

Also, keep in mind that there are no finish lines here. Your business plan is a tool to support you through the marathon of owning a business. It will need constant revisiting and possible tweaks. But in the end, the effort will show in your brand's sustained growth.

Have business banking needs that aren't being met? That's where Newton Federal comes in. We offer various business accounts, as well banking tools to help ease the demands of being a business owner. Contact us today; our bankers are on hand to see to it that you get the support you need.

Serving The Banking Community Since 1928.