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How difficult is it to get a car loan?
Is it hard to get a car loan? I want to get a new car but I’m not sure if I would qualify for a loan or not.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Most people can qualify for a
car loan
if they have a reliable income source, but you’ll get better offers if you have good credit and make a big down payment.It’s typically not very difficult to finance a car, especially if you have
good credit
. Here are the things that lenders typically ask for when considering a loan application:- Proof of identity: You’ll usually be asked for documentation of your name, address, and Social Security number.
- Proof of income: In order to qualify for a car loan, you’ll need a reliable source of income. Most lenders will accept a recent pay stub as proof, butself-employed peoplecan bring other documentation.
- Good credit: While you can usually find a car loan with poor orlimited credit, it’s much easier to qualify for a loan with good terms if you have agood credit score. If you have poor or limited credit, considerfinding a cosignerwith excellent credit to help you.
- Vehicle information: You’ll need to provide the make, model, year, and VIN of the car that you want to purchase.
- A down payment: Most car loans require that you make some kind ofdown payment, althoughzero down paymentoffers do exist. The larger your down payment, the better the terms of your loan will be.
Many lenders will also ask for
proof of insurance
when you apply for a loan. You will need to verify coverage before you can take home your new vehicle.If you don’t like the rates offered by a major lending institution, try a smaller local bank or
credit union
. Good luck!MORE: How to buy a car with bad credit
View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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