Reference Requirements for Car Loan Approval

Personal references are a must when you're applying for a car loan and you have credit issues. Reference requirements vary by lender, but when you’re dealing with a subprime lender, they typically ask for six to eight detailed personal references. Let's take a look at some general guidelines about personal references for auto loans.

Required Details for Listing a Personal Reference

Reference Requirements for Car Loan ApprovalThe level of detail, as well as the number of references you need, varies from lender to lender. But, typically, references must include full names, addresses, and home telephone numbers. In some cases, lenders require work phone numbers, as well. Most lenders aren’t going to accept anyone you live with as a reference for a car loan, but they're usually okay with you listing relatives.

In fact, some prefer that you do. For example, special finance lender Consumer Portfolio Services allows you to list one reference that lives at the same address as you, and prefers that you to list at least two relatives. The bottom line: it all depends on what your particular lender requests, and what their loan programs allow.

Why Do You Need a Reference for a Car Loan?

Subprime auto lenders require a list of references in order to verify that the people you list know who you are and where you live. The lenders also want to make sure that you aren't making an automotive straw purchase, which happens when someone buys a vehicle for someone who can’t get financed on their own. Following up with your list of references is just standard procedure for these lenders, and they may or may not contact any or all of them.

What Does it Mean to be a Reference for a Loan?

Being a reference for an auto loan simply means the buyer is choosing you to verify any information a lender may call and ask about. It doesn’t mean your credit is going to be affected, or that you’re going to be spammed with car financing offers from dealerships. You’re simply a personal contact of the buyer, so don’t be alarmed if you receive a call from a lender asking you to verify that you know the buyer.

Looking to Finance a Car?

It's a good idea to make sure you reach out to your references before listing them for your lender, so they know what to expect if they receive a call. If you're struggling with poor credit, you need to understand that personal references are required by most subprime lenders that you need to work with if you want to get approved for an auto loan. If you're having trouble finding a dealer that works with these lenders, The Car Connection wants to help.

We match consumers with damaged credit to a dealership in their area that specializes in helping buyers with less than perfect credit. The best part is that the service we provide is free, fast, and puts you under no obligation. Get the process started by completing our simple and secure online car loan request form today.


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