The car loan application process can be daunting for a lot of people, and it doesn’t make it any easier when each and every lender assesses the application slightly different and they also have different lending criteria in regards to the vehicle and also the applicant.
It is most important to present your application to any lender in the best possible light the first time, and for this reason, it can be very useful to use a professional such as a finance broker to guide you through this.
As the finance broker will be the intermediary, they will take the guesswork out of it for you and establish any issues in your application and understand which lenders would favour your strengths the most to get you the best outcome in an efficient time manner.
They will also understand the financier’s lending guidelines and ensure that your income and expenses are all entered in correctly, as this is a very common mistake where a lot of people don’t understand how the lender will determine your averaged monthly income out. (E.g. the most common mistake is when a person earns their wages weekly and to enter their monthly wage, they multiply this by 4, when in fact there are 4 1/3 weeks in a month). This can sometimes be the difference between a decline and an approval, so it is important to get this right.
The application process is all about correctly collating all your information and accurately placing it into your application, which would mean correct income and expenses, correct time frames at residences and best estimated values of assets and liabilities. These are all quite easily verifiable if required by the lender and if you are way out, this could raise suspicion and may make the analyst look deeper.
Once your application is in with the lender, they will have analysts review your information and any supporting documentation, such as proof of income or any other expenses. They may ring some of your past financiers to check the conduct of those loan accounts, and they will be able to tell which lenders you had applied to over the last 5 years by your credit file. They could also ring your employer to check if you have been working with them for as long as you stated on your application and may also ring the property manager of your residence if you are renting to check that you pay your rent on time.
Once the analyst is completed their verifications and checks, they either will come back with a rejection, or request for further information, or an approval which may be subject to certain conditions.
Once you have the approval with the ability to satisfy any conditions requested by the lender, you are now able to secure your car purchase. Details regarding the vehicle will need to be obtained in order to be able to draw up loan contracts based on the actual vehicle you are buying and the price and any trade in or deposit.
Once loan contracts are drawn up, you are able to review and if you are satisfied with everything in the contracts, you then sign and send them back in order for the lender to check that everything has been executed correctly. Once the lender is satisfied, they will settle the loan and pay the seller and your loan contract begins and your repayments will start as per your agreement in the contract.
You are now a proud new owner!
CarLoans.com.au can provide you a free car loan assessment, this assessment will determine what loan product suits your needs best as well as providing you with the interest repayments - click here to get a free assessment