If you want to get an auto loan, you have to present adequate proof of income and documents which show you can pay for the car in due time. Before lending you money, lenders normally review your credit score, your income and other factors prior to approving it.

This generally applies to $10, 000 personal loans or auto loans.

But, prior to that, you may need to track your earnings over the past couple of months, or at least show your income and progress through generating pay stubs.

This is why you may need to prepare or at least start preparing the following forms of documentation if you want to take advantage of a car loan:

Proof of Identity

Through federal law, lenders are required to confirm their customer’s full name and identification. Usually, your driver’s license, passport or any government ID would suffice. Sometimes, lenders can make phone calls to vouch for your identity so it’s generally a good idea not to make things up and to be truthful in your ID’s.

Car loans for businesses

If you’re using a car for an SME, then you may also need to take out an Employer Identification Number or EIN. For SME’s they may also require certain documents like articles of incorporation or partnership agreements. And they may also require a letter from the corporation featuring your company letterhead to show that you’re going to purchase this car for a company.

If you are self employed, then lenders will generally use tax returns to tell your gross income.

Proof of Income

Proof of Income is probably the most basic requirement in achieving any loan request. This proves that you are earning and have been earning for a specified period of time and you have the means and resources to pay off the loan.

You can generate a pay stub to show proof of income.

Or you can ask for an income verification letter from your former employer(s) to vouch for your participation in the workforce and your own abilities to earnestly make a honest living.

Other sources of income

These may include small businesses, legal settlements or child support payment. If you’re earning any of these, it’s a great idea to include these in your pay stubs so you have further proof of your abilities to pay for your car loan. While some of these may not be residual payments, if you have a certain amount, then it’s likely you can also co-pay the car.

Social Security and Credit History

If you want to go for a car loan, you’re going to give the lenders your Social Security together with your basic details.

If you provide your credit history, they will also assess your past abilities to settle loans and to make payments on time. It’s a great idea then that when you’re just starting to venture into the world of loans, you don’t live beyond your means.

Proof of Residence

Federal law generally requires lenders to secure information on a customer’s residence. And the proof of residence is important. If your driver’s license shows your current address and it checks out, more often than not, lenders will settle for that.

If you’ve recently relocated, however, you may need to provide more information and the other things which include part of your proof of residence are:

  • Utility bills
  • Mortgages
  • Leases
  • Credit cards and bank statements
  • Medicaid or Medicare benefits
  • Homeowners or renter’s insurance policy

Since you’re required to present a physical address, then you can’t use a post office box. Except for those in the Army or the Fleet. But you may use the address of a family member or next of kin.

Vehicle Information – the Auto Dealer may Provide it to the Lender

If you’re financing through an auto dealership, more often than not the former will give all this information to the lender you are hiring.

You may also need to include a complete bill of sale or purchase agreement and these generally include

  • Purchase price
  • Vehicle information number of VIN
  • Year of the car and it’s Model number

You can also get this information for used cars and it can include additional details such as mileage or any of the original titles attributed to this vehicle.

Current Vehicle Registration Information

If you want to trade in a vehicle, you may bring your title and registration information to make things much faster. The title might also require other things such as odometer statements or damage information, generally things that have happened to the car when you were still it’s owner.

Insurance Information

If you’ve already signed the bill of sale, proof of insurance is generally the next step. This is what you have to obey with local state laws and you may need to meet other state requirements of the lenders prior to being able to take the car away.

If you already have insurance on the car, then it may be covered by those grace periods also so make sure to check.

First Time Auto Buyers

If you don’t have auto insurance, then it may be time to start laying down the foundation for it. If you want financing for a vehicle. Insurance is important so make sure that you slowly obtain some of these documents if you plan to purchase a vehicle. It isn’t likely that you’re going to make a purchase overnight, but if you slowly dole out these requirements, you may very well be on the next step to get your auto loan.

Down payment for Auto Loans

There are several forms of payment on your initial installment. These can include

  • Cash
  • Personal check
  • Credit card
  • Debit card
  • Preapproved Auto Loan

If you want to use debit or credit then make sure you ask the dealer if they accept this form of payment.


If you want to take out an auto loan, you’re first going to have to prove your identity and then show proof of income. If you’re a first time buyer you may also need to get auto insurance.

All of these hinge on your ability to show that you can pay off the debts at the right time and that you are a responsible car owner.

You can start proving your income now through generating pay stubs.

In fact, if you’re self employed or a freelancer, then showing proof of income is indispensable and it is something you must not neglect to do.