What Is Proof Of Income For A Car Loan In Port Credit

What Is Proof Of Income For A Car Loan In Port Credit

Posted on May 19, 2021

Proof of income is all part of the car loan application process. It is designed to validate your income to ensure you can afford the loan you’re applying for. But what can you use as proof of income for a car loan in Port Credit?

Let’s cover proof of income and provide examples of what you can and cannot use as part of your car loan application.

Why do you need proof of income?

You need to prove your income because the lender doesn’t know you and for the same reasons you need to prove ID.

The days of going to the bank manager who has known you and your family forever are long gone. Most car loan companies aren’t even located in your town so won’t know you at all.

You could claim to earn any amount you like to get the car loan only to default because you cannot afford the repayments. Lenders will want to know that you can afford repayments to help prevent losses.

Asking you to prove your income also satisfies the lender’s obligations to lend responsibly.

What can you use as proof of income for a car loan?

What documents you use as proof of income depends on your how you are employed.

If you’re an employee, you can use your payslip, salary statement, pay stub, online employee account statement or other official payment notification.

You can supplement this with bank statements showing salary payments from your employer.

Expect to be asked for originals of all documents to avoid the potential for fraud. Take copies of everything for your own records before supplying them to the lender.

If you’re self employed or a contractor, your requirements will be different. You will need to provide any official documentation you have to show income.

That can include work contracts, freelance agreements or any formal work arrangement paperwork you might have. You’ll also need your latest tax return and bank statements to back it all up.

If you use a business bank account, expect to be asked to provide three months’ worth of statements as well as your personal bank account.

Both employee types can also use a proof of income statement from the CRA. You’ll need to set up an account with the department and enter some personal information for account verification, but once verified, you can use a statement as evidence of income.

Other income types

If you have income from rental properties, investments, pensions, dividends or something else, you should provide evidence of those too.

That can be in the form of a tax return, income statements for investments, dividends or pensions, bank statements for rentals and all types of income. If you have an agency managing rentals on your behalf, the agreement showing monthly income should suffice.

Even if you don’t use that income as part of the loan application, the more you show you have coming in each month, the higher the chances of loan acceptance.

In summary, the more evidence of income you provide, the more likely you are to have it taken into account when applying for the car loan. Even if it isn’t used, it’s much better to have too much evidence than not enough!

Contact Unique Chrysler for help, advice and competitive Port Credit car finance and leasing.

Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!