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Please note: the information provided above is for illustration purposes only. Contact the individual finance provider directly for specifics about their products, terms and conditions.






Applying For An Auto Loan


Lender's Perspective

Lenders will look at your ability to repay the loan when qualifying you for auto finance. Understanding the process can help ensure that you are able to qualify and, while doing so, also get the best terms available.

Lenders look at two things when determining if you are able to qualify for financing: your ability to repay the loan and your willingness to repay it.


Ability to repay

The first thing that a lender wants to know is if you are able to repay the loan for which you are applying. The lender looks at your current employment. Have you been in the same job for at least two years or at least the same line of work for a few years? This shows the lender that you have steady employment, and its a great plus in qualifying for any loan.

The lender also looks at your total income and compares it to your debts, adding in your proposed monthly loan payment. You must have sufficient income to comfortably make these payments. This reflects your ability to repay the loan and is an important part of the qualification process. If the lender believes your debt load is too high, you may be asked to make a higher deposit, qualified for a smaller loan and possibly be charged a higher interest rate. Obviously, this will affect the type of vehicle you may be able to purchase and so it makes sense to pay off as much debt as possible before applying for any loan.


What's your credit score?

Willingness to repay

The next step in qualifying for an auto loan is determining your willingness to repay it. Lenders determine this by looking at how you have paid off debt in the past, and it is one reason why they check your credit report. If you have faithfully made on-time payments toward your past debts, it helps you immensely when applying for any type of loan.

The lender may ask you for a very complete financial picture of your life your income, assets, credit report, etc. when qualifying you for an auto loan. Once you provide all of this information and the finance company is able to verify it, it demonstrates your ability and willingness to repay the loan. This clears the way for you to qualify for financing for your dream car.



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