What paperwork do you need to prepare for car finance?

One of the best things you can do before applying for car finance with us is preparing everything you need. To help your application process be as straightforward as possible, there’s a checklist of documents you should keep at hand. You’ll need to submit these in order for your application to go through correctly.

We’ve put together a quick guide on the paperwork you’ll need to get together, plus we’ll address a few other factors to take into consideration, too. If you want to find out whether you’re likely to be approved for finance right now, you can use our free soft credit check to check your eligibility. The process takes a couple of minutes and won’t impact your credit score.

Personal Information

Things are pretty simple to begin with. You’ll be asked to give some personal details. These include your full name, address and date of birth.

This basic information allows us to create and identify your individual application. It also forms the basis of our soft credit and affordability check for the most accurate results.

Proof of Identity

When applying for car finance, lenders will want to make sure you are who you say you are. So, you’ll need to prove your identity using a valid form of ID.

The most convenient way to confirm your identity is to provide your driving licence. Most lenders will only offer car finance to drivers with a valid driving licence. There may be some who can offer finance to you with a provisional licence, but this is rare.

You’ll need to provide a photograph of both sides of your licence, with all your details clearly displayed. If you only have your paper licence, you can include this with your documents.

You may also be able to use your passport as proof of identity, depending on the lender you’re matched with.

Proof of Income

You’ll also require proof of income within your paperwork to prepare for car finance. We’ll want to know your employment status, details of where you work, your job title and monthly income. Most lenders will require you to provide three months of payslips or bank statements as proof of income. This will show them that you’re able to afford your proposed monthly payments. Occasionally, a lender may call your employer to confirm that you work there. They won’t share any details about your application with your employer.

If you’re self-employed, most lenders will accept bank statements that show regular income as sufficient evidence. Juts make sure the statements you provide prove you receive regular income.

If you receive benefits, you can add them as part of their income, provided that at least half of your income is from employment.

Proof of Address

You’ll have entered your address at the very beginning of your application. To confirm it’s your place of residence, we’ll ask you to provide some supporting material. You can provide a number of documents as evidence. A recent utility bill, council tax bill for the current year or even a letter from your bank can be used as proof of address.

In some cases, you may need to provide at least three years of address history. This is for the sake of traceability and helps the lender to better confirm your identity for a smoother application process.

If you’ve recently moved, or moved back, to the UK, some lenders may carry out overseas address checks to verify your details. This varies from lender to lender, but having your previous addresses at hand will allow you to proceed with the application quicker.

Bank Details

Don’t worry – you won’t be charged at any point in your application. However, you will be asked to enter the bank details of the account from which you wish to make monthly repayments. This is done so your finance can be set up quickly if you decide to go ahead with a deal.

What else should you consider when applying for car finance?

Budget

When you find yourself in a position to start searching for a car, working out how much you can afford to spend should be your first priority. Use a budget calculator to calculate your monthly income and outgoings. This will help you to come up with a realistic budget for how much you can afford on your monthly repayments.

Take a look at our articles how to budget for a used car and how to prepare your finances for a car finance loan for further advice.

Credit rating

This is an important one. When you apply for car finance, or any other loan for that matter, it’s important that you’re aware of your credit score as it directly affects your finance eligibility.

If your credit score is excellent, you’re likely to receive better finance rates. This is because a strong credit rating positions you as a ‘lower risk’ applicant to lend money to. Likewise a poor credit score will likely mean you’ll have to consider less appealing finance rates as a ‘higher risk’ applicant.

If your credit score is poor, don’t be discouraged. We work with a diverse panel of lenders who offer finance solutions for bad credit applicants. Have a read of our guides nine things that don’t affect your credit score and top 5 tips to boost your credit score to get tips on managing your credit score.

Loan type

There’s a variety of car financing options on offer. Before applying, you should carefully consider the type of car finance that’s best suited to your circumstances and requirements. Read our article: what are the different types of loan, and which one do I need for car finance? for more information.

Find out today if you’re eligible for finance with our free soft credit check

While you’re getting your paperwork sorted, you can check if you’re eligible for finance with one or more of our lenders with our free soft credit check. This is a preliminary check that won’t affect your credit score and only takes two minutes to complete.

Interested? Start your application now.

Apply for finance today