Good news is on the way to the vehicle lovers as there is a definite possibility of a reduction in vehicle prices in the upcoming budget, it’s not a confirmed news though. Taking the positive side of it, we expect the booking for the small and medium budget vehicles will skyrocket in coming months, this article will help our readers to prepare for the leasing/loan facilities and get the first movers advantage.
Before getting into the subject, we should consider the “Loan to value ratio” (LTV) guideline as there is no information or assumptions regarding LTV, below article, will help you to learn more about LTV
Following are the important steps in the preparation
Decide on the vehicle
Make sure to do a research about the vehicle options you have and finalize the list with only one or two options.
Check the LTV and arrange the balance fund requirement
You can avail only a percentage of the vehicle price (based on the valuation or invoice) as the lease or loan, make sure to check and arrange the balance to avoid last moment panic, also you should have additional savings to pay for the initial fee’s, registration fee and insurance.
Arrange your personal documents
Banks and financial institutions necessitate basic documentation to proceed with your loan application, thus make sure to arrange the following in advance
- Copy of national identity card / Passport
- Residential proof – Utility bill, a certificate from grama niladari or any acceptable document requested by the institution.
- Guarantor’s document – most of the banks and finance companies require personal guarantors, having an arrangement might save you from last minute rush.
Arrange your income proof documents
You have to provide and justify your income to the lending institution, thus make sure you already have the following
- Updated bank statements for last six months
- Salary slips/confirmation letter from the employer
- Additional income proof documents (rent agreement, business income)
Know your CRIB report status
Most of the loan application get rejected due to the CRIB report, make sure to have a very good idea about your past payment record. You should consider not only your own borrowing; you have to check on the facilities you have signed as a guarantor. A good CRIB report is a step closer to the successful loan application.
Know your monthly disposable income
This is the most important step of all as most of the clients are prepared to buy the vehicle but not prepared to pay the monthly instalments, it will result in termination of the lease agreement and losing your vehicle and savings. Thus, make sure to work on your budget and identify the disposable income, try and fit your vehicle leasing instalment within your disposable income.
Most of these steps are common for all kind of loan applications and there will be minor changes in the requirement, however preparing yourself to apply for a loan will save your time and money. Also, you will have the most important “peace of mind” while your application is in the processing stage. Good luck achieving your vehicle dream.
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