How to Get a Car Loan with Low Income
You don't need to be rich to qualify for a car loan. In fact, there are many auto lenders who offer loans at a reasonable price point. However, most subprime lenders require a pre-tax monthly income of at least $1,500, but this amount varies.
To start the process of getting your low income car loan, you should talk to a lender or car dealer to ask about their exact requirements. If you're not sure where to go, let Auto Credit Express help. We have a nationwide network of dealers that work with just about every credit situation. Start the process by filling out our auto loan request form and we'll get to work connecting you with a dealership near you.
You should take some time to prepare before applying for an auto loan. By having as much information as possible beforehand, you can make the car buying process easier for yourself. Make sure you do these things before heading to a dealership:
Even if you have a low income, you may still be able to qualify for a car loan. The trick is to know what to expect and come prepared.
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Yes, you can get a great interest rate on a low income car loan, but your credit has to be excellent in order to do so. Auto lenders mostly base your interest rate on your credit score, so your income has little to do with it.
Even though lenders factor in credit more heavily than income, they do consider overall risk when they're determining your interest rate. So, having a lower income may raise your interest rate, especially if you're not working with a lender that's prepared to deal with low income consumers.
One trick to getting the best rate you possibly can when you're in need of a low income car loan is to take as many money-saving steps as possible. Keep these tips in mind:
If you're a subprime car buyer, you may not qualify for a great interest rate. Subprime buyers often find that lenders compensate for the additional risk of poor credit with higher interest rates. While it'll be higher than other interest rates, it may still be less than you think, depending on your situation and the lender you're working with. The only way to know for sure what rate you'll be offered is to talk to a local low income car dealer near you.
If you're looking for a car loan, but your credit isn't stellar, chances are you need a subprime loan. Subprime lenders help people in all kinds of challenging credit situations, such as bad credit, no credit, and even bankruptcy. Not all dealers work with these types of lenders, but we here at Auto Credit Express know where to send you to get you back on the road.
But what if you aren't willing to take a chance on your credit? Is there a way to get a car that's based on your income, and not your credit? Well, you're in luck. There are dealerships that do in-house financing - sometimes called buy here pay here or tote the note dealers - that don't check your credit to qualify you for an auto loan. All that's usually required is proof of a steady income and a down payment.
At these car lots, the dealer is the lender. You can often pick out a vehicle, complete the paperwork, and be on your way all in the same day. However, these types of dealers may not report your loan or payments to the credit bureaus, so it won't help you improve your credit. But if you need a car quickly and are concerned about your credit, this is a way to get an auto loan based on only your income.
Having access to a vehicle is often necessary in order to get to work, school, or wherever you or your family need to be. High car prices can be a barrier for low income families and individuals, but there are other ways you can get a vehicle.
A number of states and counties offer grants for low income families to buy a car. There are state assistance programs that provide funding directly to families to help them buy a vehicle, while others provide loans for the purchase of a car - often at lower interest rates than you'd normally qualify for at a bank or credit union. In addition, you can look into vehicle donation programs with charities and non-profit organizations. They often make donated cars available to consumers who are low income earners, unemployed, or dealing with a disability.
If you're trying to get a car loan with low income, you can look into these assistance programs or donation programs, or check for grants for low income families. Another option, of course, is applying for an auto loan with a special finance car dealership - including those that Auto Credit Express works with on a daily basis. These dealers are signed up with lenders that understand and know how to work through unique situations.