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Take It To The Bank: Setting Up A Loan With Your Local Financial Institution

Posted on Sep 30, 2011 by Thalia Green
Sep 30

Thinking about getting a loan? Setting a loan up through a bank is a great option for many. Not only do you entirely bypass the finance department at the dealer, but you can often get a better rate from a bank. This is especially true if you are thinking about buying a used car. In addition, by getting your financing through a bank, you'll be able to approach the dealer as a cash buyer, which will likely mean that you'll get a better price. Here's a little more information to help you understand what to expect with a bank loan.

 

Types of bank loans.
There are a couple of different ways that people approach getting a car loan from a bank. The first is to shop at the dealer first, and then go to the bank knowing the amount you'll need for the car you'll have in mind. This can be a bit tricky because you'll need to have the backbone to say "no" to the option to finance the car on-site, and get a number for the full amount that you'll need to cover the loan, including any taxes or fees. Another option is to request a "blank check" loan from your bank. In this type of loan, both you and the bank, agree on an acceptable range for the loan, and the terms for the loan. You can shop for a car within this price range. Once you have the full amount, you just write that amount into the blank check given to you by the bank. This option has the added advantage of having a little bit of flexibility.

 

Documents to bring with you to the bank.
Regardless of your credit standing, there are certain documents that you'll need to present before you can purchase the car. You'll need to show your driver's license, to show that you are legally able to drive the car. You'll also need to present proof of insurance. A minimum of liability coverage is required in all 50 states, and you can expect that some lenders will also require you to carry comprehensive and collision insurance to cover the vehicle while you are paying off the loan. You'll also need to show some proof of income, whether through past paystubs or other means. Finally, you'll need to show proof of a permanent residence, usually by showing business mail with your name on it.

 

Getting a loan at a bank is a fairly easy process, provided that you have done your homework. If you are not sure of what documents your bank requires, talk to them before your loan appointment so that you will be prepared. 

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