Auto Financing Advice for Self Employed Canadians
If you need to buy a car and are self employed you can pay for it outright if you have the cash, otherwise you will need a car loan.
When you apply for a car loan, you will need to get some documents in order to help you get approved for your auto loan quickly. Usually, banks and auto finance lenders are looking for proof that you will be able to repay the loan. This information, along with your credit report, credit score and size of down payment will determine the interest rate you are charged.
Documents you need for an easy self employed car loan
Some lenders may ask for particular documents that others don’t require, so it’s worth applying online and getting pre-approved instead of running around from dealership to dealership or bank to bank only to be turned down. To get you started, here’s a short list of documents most auto loan lenders want to see:
- Proof of income: If you are Self Employed you normally do not have pay stubs to show for proof of income. Most car loan companies will accept tax returns to determine gross income but sometimes they will accept two months of bank statements as proof that money is going through the bank account.
- Credit and/or banking history: The lender will want to know about any other loans or financial obligations like credit cards and other consumer debt you have outstanding, and how you’ve handled debt payments in the past based on your credit report – usually from Equifax or TransUnion.
- Proof of residence: any personal mail you have received within the last month or two from the phone company, utility company or other regular bills you receive.
- Proof of insurance: You must provide proof that the insurance company knows about your newly purchased car and that the car is adequately insured.
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