Errors on Your Car Loan Application?

If you detect errors on your car loan application, you will have to correct those errors before the loan is funded. Some errors are relatively minor, and they can be corrected at any point without penalty. Others may affect the way the loan is sourced, and making this type of error can lead to problems with your application.

Information on a Car Loan Application

Your car loan application will have to types of information: personal information and financial information. Personal information includes anything relating to your age, residence or living situation. Basically, personal information does not have to do with money. Financial information, on the other hand, is directly related to your monetary situation. This will include your salary, loan request, credit score and financial history. Personal information is used for the lender to get an idea of who you are, how stable your life is, and how easy it will be to track you down if there is any problem. Financial information will affect the actual size and terms of your loan. As a general rule, making a mistake on any of your personal information is not as large of a problem as making a mistake on your financial information.

Steps in the Car Loan Process

The loan process entails several steps. Some lenders will move through these very quickly, but they will move through them nonetheless.

  • The first step occurs when you shop around for general quotes on your loan.
  • The next step occurs when you actually decide to submit an application.
  • From this point, the loan process transfers to the lender. The lender processes your application by verifying the information is correct. Then, based on this information, the lender will decide whether to approve your loan and set terms.
  • There will be a negotiation period before you sign the contract.
  • At this point, the loan is considered funded, and the process will be complete once the funds are delivered to you.

Correcting an Error before Processing

Before the loan is processed, you can correct both personal and financial information fairly easily. If you made an error on personal information, consider submitting an addendum or simply notifying the lender in writing. Errors on financial information may require you to withdraw the application so they can be corrected appropriately. Ensure you only have to withdraw an application once; it can reflect poorly on you if there are multiple errors to be corrected.

Correcting an Error after Processing

If your loan has gone through the processing phase, meaning the lender has actually issued a contract in your direction, you will have a harder time correcting errors. However, as long as the loan is not yet singed and funded, there should not be a penalty for incorrect information. Again, incorrect financial information may require you to withdraw, resubmit, and reprocess the application. If you have signed the contract or received funds, you may be held liable for fraud if financial information was inaccurate. Since the lender made the loan based on this information, your error may be interpreted as intentional. Consult your attorney or accountant if you discover this problem before addressing the lender.

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