Its common if you purchase a car outside of bank hours (pretty much any evening or weekend or holiday), that the contract you sign was actually a contract authorizing the dealer to obtain financing for you. They take their best guess at the terms (rate, amount, etc) that they'll be able to get you.
That contract also includes a stipulation that if they are unable to find a bank to finance you at the terms they thought they'd get you, that you will either have to agree to the actual terms offered by a bank or return the car.
This is common and standard when you purchase a used vehicle at any time when they can't actually communicate with the bank on the spot.
So yes, you MUST return to the dealer and either sign the new paperwork for the updated loan terms or return the car.
If the loan amount is $1000 less than planned, then they either have to reduce the price of the vehicle, increase the credit they give you from your trade-in, or demand $1000 from you (or some combination of those 3 which adds up to the $1000 difference).