What are the requirements to finance a car
Are you thinking of buying a car, but you do not know how to pay it? Financing is the order of the day and is one of the most used methods in the purchase-sale of vehicles.
In we want to give you the keys so that you know what are the requirements to finance a car, a method that will allow you to borrow money and return it in convenient terms. Discover below all the necessary documentation to finance your vehicle.
What do you need to buy a car in installments
As with the purchase of other goods, financing is one of the most used methods when purchasing a car. It is a loan system that allows you to pay the car in installments, adapting to the ideal quota for you.
When buying a car, the first thing that borrowers will take into account, be it the financial or the bank itself, is that you can return the money they are going to lend you. Assuming the debt is the main requirement for the financial or banking entity. To be sure, these will analyze your income and your monthly expenses, in case you have other goods or loans.
If it is feasible that you can assume the debt installments, the minimum requirements to finance your car are :
- Be of age.
- Not be on any list of defaulters. In the event that you have not returned a previous loan or have stopped paying a receipt, you will appear on a list that will prevent you from obtaining new credits.
- Your income level will determine if it is viable to request a loan to finance the car.
In addition to these basic conditions, it is likely that they will make you link to the entity that is going to lend you the money, for example, directing the payroll or taking out insurance. Also, financing a car at the dealership will mean that you must give a car ticket that will be around 10% of the total price of the vehicle, approximately.
Documentation needed to finance a car
In addition to the basic requirements, when financing a car, a series of documentation must be presented in order to carry out the financing procedures. The documents that must be provided are:
- Photocopy of the DNI.
- Photocopy of the last three payroll or income you receive.
- Last income statement.
- Bank document where the IBAN account number appears.
- Proof of assets, if you have any.
- Laboral life.
Tips before financing a car
Before financing your car, it is important that you keep in mind certain tips that can go well when it comes to returning the money comfortably and without surprises, since there are many formulas for this and some may be less beneficial or comfortable for you.
- Real possibilities of repayment of the loan : do not forget that with financing what you are doing is borrowing money, so first of all you must take into account your own budget and your own possibilities when buying the car. Acquire a vehicle that fits your economy and allows you to return the money comfortably. Think that debts are always a negative point when it comes to benefiting from other loans. Also, keep in mind that, in addition to the car's fee, you will have to pay the registration fee, the road tax and the vehicle insurance.
- It controls the existing financing options: as we have said, you must study all the financing formulas before requesting or processing the loan. What is best for you? You can do it from a bank or from a financial institution and the conditions may vary. Financial companies tend to be more flexible when granting loans to finance the vehicle, since they are usually linked to dealers and share one objective: selling the car. However, banks usually offer better financing options. Which one do you prefer? Value it!
- Interest rates : in addition to the total price of your car, financing it also acquires the commitment to return something else. To do this, you must take into account the interest rate offered when financing the car. This can be fixed, variable or flexible.
- Simulate your loan : this way, you can check what the monthly installments will be and you will be much easier to make the decision that best suits you.
- Pay a good income : pay a good entry, that is, a good initial money, will be much more beneficial for you. On the one hand, the loan that you will have to ask for will be lower, as well as your long-term debt, and you will be able to reduce interest. It is always better to avoid financing 100% of the car.
- Internet : keep in mind that, sometimes, it is not necessary to officially present yourself anywhere to calculate the financing of your car. There are multiple options in the network to do it online. What can be much more comfortable, especially if you are one of those who do not have much time. If it does not convince you, check out this other article on How to buy a car online.
Now that you know what are the requirements to finance a car, you just need to assess the options that exist in the market and get your ideal vehicle. Financing is a useful and convenient tool that will allow you to pay your vehicle in installments while you enjoy it.
