About Car Loan Requirements

Most people need to get a car loan to achieve their goal of getting a reliable used or new vehicle for both personal and professional transportation. Having bad credit is not necessary an exclusionary factor when seeking a car loan, but the best interest rates, highest quality vehicles and lowest down payment requirements are usually reserved for those who have good credit.

Income

Proof of income is essential to qualify for a car loan, even with good credit. Dealers often require pay stubs and/or bank statements and sometimes call to verify employment.

Credit

People with bad credit will often be asked to consider a lower-end new car or a used car and may be outright declined by some auto dealers.

Residence

Most car dealers also like to see proof of a stable residence, proven through leases and/or utility and telephone bills.

Insurance

To qualify for an auto loan and drive the vehicle away from the dealer's lot, the applicant is required to either have insurance or purchase it over the phone before the deal is finalized.

Down Payment

Most people with good credit will not be required to make a down payment unless they are purchasing a luxury vehicle. However, those with bad credit will probably need a cash down payment of at least $1,000 to qualify for the loan.