Bank Statements for Car Loans: 7 Tips

J. Richards

May 20, 2022

Did you know? In most cases, bank statements for car loans are crucial because they give assessment teams a snapshot of a borrower’s financial situation and spending habits.

This can be a double-edged sword; you submit “clean” bank statements, you have a higher chance of approval (and lower rates), you have poor banking conduct, and the opposite might occur.

We explain why bank statements for car loans are so important.

Firstly, bank statements for car loans in brief

When someone applies for a loan, lenders (like banks) need to check their financial situation along with what they plan to do with the money.

To get an idea of a loan applicant’s financial situation, lender assessment teams look at bank statements, typically three months.

Usually summarised in a PDF, bank statements show thing like:

  • Whether an applicant is spending too much of their money on unnecessary things
  • If they have enough surplus funds left over each pay cycle to service a new loan
  • Any undisclosed debts
  • General spending habits and living expenses
To ensure your bank statements are in top condition, we’ve listed these seven tips
  1. How to send bank statements for car loans

At OnlineLoans, we do the work for you. You’ll receive a link to our secure portal which summarises and delivers your bank statements to us. This means no trips or phone calls to banks, no downloading PDFs and emails and, best of all, it’s a free service.

OnlineLoans assists with all documents needed for a car loan.

  1. Avoid gambling

gambling

When you send money to online betting apps or buy lottery tickets online, it’s recorded on your bank statements and shows up as gambling.

Knowing how much is too much can be tough. Some lenders look at the frequency of gambling more than the amount meaning that, for example, $10 per day can have a bigger impact than $70 per week.

Of course, the amount of gambling that can impact a loan application is relative to how much income someone receives and the portion of their income that goes on gambling.

Be safe and avoid gambling in the three months leading up to applying for a loan.

  1. Avoid cash withdrawals

cash withdrawls

Assessment teams don’t like seeing cash withdrawals in bank statements for car loans because it’s hard (next to impossible) to verify where that money is going.

Generally, the larger the cash withdrawals are and more frequent they are, the bigger the impact can be.

The best idea is to avoid cash withdrawals in the lead up to applying for a loan.

  1. Don’t go into the negatives (overdrawn) 

This means a scheduled payment comes out of a bank account but there aren’t enough funds to cover it.

For example, someone might have $10 remaining in their bank account when a $15 streaming service direct debit is due. This means their bank account displays -$5 and is in the negatives until they get paid again.

Ensure your bank account doesn’t go into the negatives (overdrawn) in the lead up to applying for a loan.

  1. Reduce frivolous spending / transfers

Food delivery services, regularly eating out, nights out – it might be fun (and delicious) but is it necessary? Taking your income and lifestyle into account, try to reduce frivolous spending in the months before applying for a loan.

The same can be said for money transfers too, for example if you send money to a friend. 

  1. Be accurate with descriptions

Money transfers to friends, family and other people show up on bank statements too so make sure to label them correctly in the description if you have to send money to someone.

Note that if you regularly send money to other people, it might appear as a debt you’re paying off.

  1. Pay your bills on time

This means dishonours on bank statements for car loans. Dishonours are when a due bill can’t be deducted from your bank account, for example a phone bill of $80 when there’s only $20 in a bank account.

This is different from going into the negatives (overdrawn)

Overdrawn: some banks allow accounts to go into the negatives by a small amount of money. Eg. a $15 payment for a streaming service deducted from a bank account with $10 remaining.
Dishonour: when a payment can’t be deducted from a bank account due to insufficient funds. In this case, the bank rejects the payee’s (eg. a phone company) deduction and the bill isn’t paid.

Generally, dishonours have a bigger impact on a loan application than an overdrawn account, but make sure to avoid them both.

Bank statements for car loans at the end of the day

Getting your bank statements aligned and polished before applying for a car loan can really make a big difference to the outcome.

If you’re ready to get into a new car, get started here or get an idea of possible numbers with our car loan calculator.

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