While some people spend hours negotiating a price when buying a new truck, finding the right financing can also have a significant impact on your wallet.
We share the answers to the five most common questions that our clients usually have when they want to apply for a vehicle loan for trucks.
What should you consider when comparing different banks?
Many financial centers may have different criteria for the approval of a vehicle loan, and their terms may vary from one to another. Some may require a down payment, and some may offer longer or shorter loan terms than others.
Comparing the best terms on a vehicle loan can generate significant savings, even if there is only a 1 or 2 percentage point difference in the interest rate. For example, on a loan of $ 40,000 repaid over five years, the difference between a loan with an APR of 4% and another of 6% could have a margin of $ 3,000.
Additionally, when comparing different banks, determine what types of loans they offer and if they have any special requirements. Some even only work with dealers affiliated with manufacturers, while others work with independent dealers and finance individual purchases.
What does prior approval mean?
Pre-approval for a truck loan is a tentative loan offer based on your financial and personal information. It does not guarantee that your credit will be approved later, significantly if your financial situation changes, but it can help you guide your budget.
You can submit multiple pre-approval requests to compare conditional offers from different banks. You may be pre-approved for different loan amounts, terms and conditions, and interest rates.
The pre-approval process often takes just a few minutes and can even be done online. For this, you may need to share your name, contact information, identity document, information about your employer and salary, and the vehicle’s make and model if you plan to buy.
You can show the pre-approval offer to your dealer as proof that you will probably be able to finance the purchase. A pre-approval offer can be a valuable tool for acquiring a truck in less time.
Keep in mind that a pre-approval offer will likely have a time limit and may depend on the type of vehicle you want to buy and your financial status verification.
Does your credit history affect you when you apply for a truck loan?
To get the best loan rates, you may need excellent credit scores. Also, some banks tend to prefer people with near-perfect credit histories and no outstanding debt or loan. It does not mean that you will be denied a loan, but you may not get the best terms.
Remember that many banks analyze the applicant’s complete financial picture, including your job and housing stability, your income versus other monthly payments you have, and your payment history.
What paperwork do I need for a vehicle loan?
The information required varies by bank, but typical documentation or requirements include:
- To be over 18 years old
- Photocopy of the ID of the holder and spouse
- Photocopies of electricity or water bill
- Account statement of your ONP or AFP
- A good rating from the credit registry
- Proforma or quotation of the truck in which you are interested
- Last payslip (fixed income) or previous three payslips (variable payment) You can also use the fee receipts from the last three months
- Sworn declaration
During the car buying process’s final stage, you may also need to submit the purchase agreement, registration, title, and dealer purchase instructions to the bank.
Where should I apply for a vehicle loan for trucks?
Some truck buyers spend hours researching different models online before hitting a dealership and taking a test drive. But when choosing a truck loan, did you know that you can go for one of the same dealer’s financings options?
Whether you’re buying a new truck or not, taking the time to compare loan options and offers from various banks can pay off. You could end up saving a significant amount of money. Additionally, getting pre-approved in advance can help you set a budget and negotiate from a strong position.