Lenders are only willing to issue car loans and car finance to applicants who they are confident will be able to pay the loans back in due time. A lender determines how likely a borrower is to repay all borrowed money by requesting and reviewing several forms of official documentation. The types of documents that will be required fall into three broad categories and some lenders may place greater importance on certain categories than others.

Looking for a Lender

A lender will naturally need clear and unmistakable proof that its customer is who he or she claims to be, so an applicant must be able to provide identification formally issued by one of several sources. A driver’s identification and Medicare cards, as well as a passport, are viable means of proving one’s identity. The applicant will also be required to accurately convey where he or she lives, so some kind of documentation that exists only because the applicant lives at the stated apartment or house must be prepared as well. This can be a lease document the applicant had to sign, a document relating to the applicant’s mortgage, or a selection of utility bills the applicant paid recently.

Following this, a lender will want to see proof of both its client’s income and its client’s spending habits. These will be conveyed through tax returns the applicant had previously filed and statements issued by the bank the applicant currently holds an account with. Besides the need for the lender to be satisfied that the client can maintain a regular saving routine, the lender will also want to review and consider the applicant’s current debt status. Separate documents concerning any prior loans the client had borrowed and the client’s credit card statement history need to be prepared in advance.

Finally, it helps an applicant’s chances to secure a loan if he or she has already insured his or her car and can produce documentation of it at a moment’s notice. A lender may request this documentation if it wants assurance that the borrower will not suddenly lose a lot of money from being sued for damages if an incident were to take place after the loan is handed out.