We all are aware of the benefits of having a car. Unfortunately, not everyone can afford to buy one, either because they do not have the money to spend for a car or their income is not enough to get them qualified for an auto loan. But these days, there are lots of companies that offer low income auto loans. So if you are thinking about buying a new car but you feel that your income will not get you qualified for a loan, then you better read this article now.
Factors Involved In Applying For A Low Income Auto Loan
Lots of lenders are aware that so many people are not earning much for them to be able to acquire an auto loan. These new financing schemes targets lenders who only earns at least $1,500 per month, although there are some other companies who also accepts lenders who earns less than a thousand dollars monthly. Aside from the income, there are other factors that the lender will have to consider before deciding your approval. Here are some of them:
- Credit Score As with several other loans, your credit rating will also have an impact on the approval of your low income auto loans. The higher your credit rating is, the better your chance of getting qualified.
- Credit Profile – You should have a longer credit profile for you to have a bigger chance of getting approved for an auto loan.
- Term of Loan If the lender will ask you to choose the terms, it is better to choose a shorter term as this will give you a bigger chance of getting qualified.
- Down payment You should be able to make a down payment of about ten to twenty percent in order to improve your chances of getting qualified.
- Employment terms Most companies that offer low income auto loans would require that you are employed for at least six months and you should have a stable income within the terms of the loan.
- Residence Another requirement is that you should be living on your current residence for at least six months already.
- Co-signer Some companies would require a co-signer for you to be approved of an auto loan. This is because having a co-signer reduces the lender’s risk.
Things to Consider Looking For A Low Income Auto Loan
Since you have a low income, bear in mind that you should not go for cars that are just too expensive for you to pay. If you go for high-end luxury cars, the payment would be huge and since you do not earn that much, the company will most likely disapprove your loan application. Some companies could allow you to avail of expensive cars for your auto loan, but they will lengthen the terms so you will end up paying for the monthly dues for a longer time.
Applying for low income auto loans is so easy since you do not need to submit any additional documents. The only thing that you need is to prove to the lender that you are earning a stable income and thats why lenders would require you to submit your recent pay stubs.
Where to Look For Auto Loans For Low Income People/Families
There are countless number of sources online that cater to people with bad credit or low income. Many loans you can get without a credit check or a steady income. There are also many buy here pay here car lots that are right within your community that will help you with financing a car if you have bad credit or no income. Some other loans sources for getting a low income car loan include:
- Auto Credit Express
- Navy Federal (NFCU)
- Capital One
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