Having your documents ready before you apply for a used car loan speeds up the process and improves your chances of a quick approval. Here's a detailed checklist of what you'll need, with specific guidance for different employment situations and newcomers to Canada.
Government-Issued Photo ID
You'll need at least one valid government-issued photo ID to verify your identity. Accepted forms include:
- Ontario driver's licence: This is the most commonly accepted ID and is typically required since you'll be driving the vehicle. Both G2 and full G licences are accepted.
- Canadian passport: Valid as primary ID, especially useful if you don't yet have an Ontario licence.
- Permanent resident card: Accepted by most lenders as primary ID for permanent residents.
- Canadian citizenship card: Accepted alongside a secondary photo ID.
- Ontario photo ID card: Some lenders accept this for non-driving co-applicants.
Some lenders also ask for a secondary piece of ID, such as a health card (OHIP), SIN card, or credit card with your name embossed on it. Having two forms ready saves time.
Proof of Income: Employed Applicants
If you work for an employer (full-time or part-time), you'll typically need:
- Recent pay stubs: Usually the last two to four pay stubs showing your gross income, deductions, and year-to-date earnings. Most lenders prefer stubs from within the last 30 days.
- Letter of employment: A letter on company letterhead confirming your position, start date, hours, and salary or hourly rate. This is especially helpful if your pay stubs don't clearly show your full income.
- Job offer letter: If you're about to start a new position, some lenders will accept a signed job offer letter showing your start date and salary.
Proof of Income: Self-Employed Applicants
Self-employed income requires different documentation since you don't have a traditional employer. Here's what to prepare:
- CRA Notices of Assessment (NOAs): From the last two tax years. These show your declared income and confirm your tax filings are up to date.
- T1 General tax returns: The complete returns for the last one to two years, showing all sources of income.
- Business bank statements: Three to six months of statements showing regular business income deposits. Some lenders use this as their primary income verification method.
- Business licence or articles of incorporation: Proof that your business is legitimate and registered.
- Financial statements: For larger businesses, some lenders request profit and loss statements or a balance sheet prepared by an accountant.
Proof of Address
Lenders need to verify where you live. Any of the following typically works:
- A recent utility bill (hydro, gas, water, internet, or home phone) in your name, dated within the last 60 days
- A bank statement or credit card statement showing your current address
- A signed lease or rental agreement
- A mortgage statement
- A property tax bill
Banking Information
- Void cheque: Used to set up automatic loan payments. If you don't have cheques, a pre-authorized debit form from your bank works too.
- Bank statements: Some lenders want to see two to three months of personal bank statements to verify your spending habits and existing obligations.
Documents for Newcomers to Canada
If you're new to Canada, you'll need some additional documentation:
- Work permit or permanent resident card: Must be valid and show remaining time in Canada
- Canadian employment letter or job offer: Proof of employment within Canada
- International credit report: If available, a credit report from your home country can help some lenders assess your creditworthiness
- Passport: Your passport from your country of origin
- Proof of Canadian address: A utility bill, bank statement, or lease agreement showing your Ontario address
- International driver's licence: Along with any Ontario licence you may have obtained
Optional but Helpful Documents
- Trade-in vehicle ownership: If you're trading in a vehicle, bring the Ontario vehicle registration (ownership) document
- Insurance quote or policy: Having an insurance quote ready shows you're prepared and can sometimes speed up the final paperwork
- References: Some subprime lenders ask for two to three personal references (name, phone number, relationship)
At 905 Autos, we guide you through exactly what documents you need based on your specific situation. Whether you're employed, self-employed, or new to Canada, buyers across St. Catharines, Niagara Falls, Welland, Grimsby, Hamilton, and the Niagara Region can apply online and our team will let you know exactly what's needed to move your application forward.