In the US, consumers take out an auto loan when they need to buy a new or used vehicle. Lenders offer a variety of loan products that meet the needs of consumers of all walks of life. A local lender explains what expectations they have for borrowers.
Verifiable Income and Employment
Lenders require all consumers to have verifiable employment and current income statements. Consumers must show that they have a job and earning enough money to pay for the auto loan. Lenders contact the consumer’s employer to verify employment and review financial information provided by the applicant.
A Valid Checking Account
The lender checks to see if the checking account information provided by the applicant is valid. If the lender provides a loan, the borrower must sign consent for an automatic draft. The lender deducts the monthly auto loan payment through an automatic draft. A small amount is deposited into the account to verify its validity.
Fulfill All Auto Insurance Requirements
Auto loan borrowers are required to purchase and maintain auto insurance coverage according to the terms of the auto loan. The standard requirement is comprehensive and collision coverage. Lenders require the highest coverage level to protect their investment. If the buyer is in an accident, the insurance covers the vehicle and prevents a financial loss. After an accident claim is filed, the insurer provides the borrower the full value of the vehicle at the time of the accident.
Pay All Payments On Time
Borrowers must pay all their payments on time to avoid late fees and finance charges. If the borrower is 90 days late on their payments, they will default on their auto loan. The lender has the legal right to repossess the automobile and sell it at auction to collect the remaining balance of the loan.
In the US, consumers start an auto loan when they need another vehicle. Lenders require verifiable income and employment for all borrowers. A valid checking account is needed for monthly auto loan payments. All borrowers must purchase and maintain auto insurance coverage. Consumers who want to learn more about auto loans contact Consumer Portfolio Services for further information right now.