What are the common requirements to get a car loan?

Answered by Car Loans Expert Jim on January 12, 2021

Jason asked

I'm going to apply for my first car loan soon. What requirements will I face as an applicant?

expert avatar

Jim

Car Loans Expert

If you have bad credit, you may be required to provide more information than an applicant with good credit. Over time, these requirements have become standard for prospective borrowers who want to be approved for a car loan:

  • Proof of income: Most commonly shown via a current pay stub.

  • Proof of residence: You can, for example, show a utility bill at your address in your name.

  • Proof of identity: A valid driver’s license or state-issued photo ID is required. A license is also required to drive the car off the lot.

  • Proof of a working phone: A landline or mobile phone bill in your name at your address is sufficient for this.

  • List of personal references: Lenders may ask for three to five personal references and their contact information. Your references may not be contacted, but their info will be kept on file in case verification is required down the road.

  • Down payment: Most lenders require a down payment. Borrowers with excellent credit usually have a lower requirement, or they may not have to provide a down payment at all. Someone with poor or short credit history is usually required to put more money down — at least 10% of the sales price for the car.


Car Loans

Have an insurance question?

Our insurance agents are ready to help you, for free.

Ask your question, it’s 100% free
Recommended
Thousands of customers saved on average $887/year on their car insurance with Jerry
This app is great, but the customer service is even better! Not to mention convenient! My husband and I got the lowest rate (much lower than the rates I was finding online through my own searches), quickly, and pretty much all through text message! Thank you so much for a hassle free experience👍
Gabriella R.
Find savings (100% Free)
stars4.6/5 Rating on App Store