Buying a car can be one of the first big purchases you may make. It can be hard to just pay cash for such a large purchase, so you may need to get a car loan. In order to qualify for auto loans Amarillo TX residents will need to be ready to provide information and still give a down payment.
Proof of Residency and Identity: If you are applying for a car loan at a credit union or bank where you already have a relationship, then you may not need to have this. However, if you are working with a different lender or going through the dealership, then you will need to provide proof of your residence and your identity. This is so lenders can make sure you are who you say, and they also need to know where you live in case you aren’t making any payments. Different lenders have their own criteria of what it accepts to show residency and identity, but for the most part a government issued ID with photo and a utility bill showing the name and address will be sufficient.
Proof of Income: In order to feel comfortable that you can pay back the loan, many lenders will want to see a proof of income. This can include bank statements or pay stubs, but different lending institutions may have stricter criteria for what it accepts as documentation.
Good Credit Score: A decent credit score helps you qualify for auto loans. Good credit scores can be relative, based on the scoring system the lender uses. Each scoring system will have a different scale. Lenders can also approve your car loan if you don’t have a good credit score and will instead charge a higher interest rate or need a cosigner who has good credit. Some other lenders will work specifically with people who have bad credit, but these loans will usually cost you more in interest so it’s important to work on improving your credit score if it isn’t that great before applying for an auto loan.
Down Payment: A down payment can help make it easier to qualify for a loan and get a lower interest rate. Having a down payment makes you look favorable to lenders because it means you are less likely to default on a loan. Many car dealerships will promote no down payment deals, so don’t be fooled by these. Even with a no down payment deal, making a down payment will help. If you don’t make a down payment, it will make the cost of your monthly payments larger, which can make them harder to pay and make you pay more over the life of the loan.
When looking at auto loans Amarillo TX residents should do their research before heading to the dealer for the best deals.