What You Need for a Car Loan? Let’s Simplify It!
Gone are the old days where a car loan approval involved days of endless paperwork and long waiting rooms. In today’s technology-driven world, usage of digital tools has made the loan approval process as simple as a few clicks. You can apply for car finance online and complete the process entirely online. But before you drive your new car, there are a couple of quick stops to make. Let’s understand it.
Minimum Requirements to Apply for Car Finance
To obtain a car loan, you must meet the basic minimum lending conditions. For most bankers and lenders, these include:
- Being at least 18 years old
- Having Australian citizenship or permanent residency
- Earning a significant income enough to pay off your loan
As per prevalent law, all lenders are required to ensure before any loan approval that the subject loan will not put the borrower under any financial risk or instability. That’s why the lenders need certain documents to verify your identity and confirm your ability to comfortably pay back the loan through timely repayments.
Required Documentation to Apply for Car Finance
Personal Information & Identification
To process your application, we will need the following personal details:
- Full name
- Date of birth
- Citizenship or residency status
- Dependents list (such as children or relatives in your care)
You will also need to provide a valid driving license for verification purposes. In some cases, we may also require your passport or Medicare card as additional identification markers for processing your loan application.
Proof of Income
This is an important document that helps to ascertain your ability to repay the loan. To verify this, we require:
- Your latest two payslips
- Bank statements showing transactions of your income and spending for the last three months
- A summary of your current living expenses (e.g., rent, mortgage repayments, utilities, etc.)
We identify income from various sources, including employment, investments, and rental properties. Retirees may use superannuation or investment earnings, while some government benefits may also be considered.
Proof of Assets & Liabilities
To get a complete picture of your financial situation, we may also ask for:
- Details of any existing loans (mortgages, personal loans, etc.)
- A summary of your investments, including shares and bonds
- Superannuation statements
Vehicle & Insurance Information
To finalize your car loan, we need details about the vehicle you intend to purchase, including:
- A dealer invoice or contract of sale (containing address, contact information, and ABN)
- Vehicle’s chassis number
- Year, make, and model of the vehicle
- Registration details
- Fuel efficiency information (as at LJ Asset Finance, we offer discounts for eco-friendly vehicles like Electric vehicles, etc.)
Additionally, we require proof of comprehensive car insurance before loan approval. This ensures financial protection in the event of vehicle damage or loss.
Understanding Your Borrowing Power
Before you apply for car finance, it’s important to work upon the maximum amount of loan that can be approved for you depending upon certain parameters (also known as Borrowing Power). These parameters are:
- Your credit score and history
- Your income and expenses
- Assets and liabilities
For calculating your borrowing power, you need to subtract all your monthly expenses from your total earnings, including loan repayments, rent, and other spendings. Please note that the number of dependents you support can also affect your calculations. So, it’s wise to factor in ongoing car ownership costs like maintenance and fuel to ensure you can manage repayments comfortably.
Fast-Track Your Application with LJ Asset Finance
We understand that submission of multiple documents can be a time-consuming exercise. That’s why we at LJ Asset Finance offer a streamlined digital application process to apply for car finance. Our user-friendly platform for a car loan takes care of all the documents for you to upload. At our end, we review and approve the documents online so that you can get the latest information on the status of your loan application any time with real-time updates. This helps in more transparency and makes the entire process smooth.
Why wait, apply for car finance?
Explore a complete range of the most competitive car loan options and use our car loan calculator for estimating your repayments. At LJ Asset Finance, our experienced team helps you secure the best car loan deal and get you on the road faster in your new car.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.