Comfortable commute - A gift that Man received from the car! A car
was a great invention but it became popular because of auto loans. Car
financing made car buying possible for everyone. Because of easy auto
financing, anyone from a king to a pauper can own a car. Don’t think
that lack of huge income will prevent you from buying a car. With
increasing number of auto financing companies, many people with limited
income get approved for loans. So, don’t worry if you have low income,
you can easily get a car with your limited budget.
Used Cars – Ideal for People with Low Income
If you earn low income, used cars are the best option for you. Pre-owned car are priced lower than a new car. This ensures a lower auto loan amount. When you have a smaller loan amount, monthly payments will become more affordable for you.
Most people change cars every 2-3 years. This means used cars that
are available in the market are not very old. Also, the depreciation
rate of an old car is very low. If you are worried about ending up with a
lemon, you can opt for CPO cars and end your doubts.
All these point prove that a used car is exactly what you need.
Getting Approval is not a once in a Blue Moon Event
There are many people with low income who easily get approved. And,
it’s not because of their luck. Working hard for an auto loan will
ensure that you get approved for it. Here are few tips to help you get
through the auto financing process. To make it simpler, the entire
process is divided into pre-application and post application work.
Pre-Application Work
Budget – Important for every Low Income Car Buyer
Not everyone is born with a silver spoon in their mouth. Most of us
have to budget every purchase. And, there is nothing wrong with it. A
budget ensures that you never overspend. When you are ready to buy a
used car, know your affordability. Understand the amount of money that
you can spend on a car. Do remember that payment is not the only
expense. You will have to spend money on fuel, repairs and maintenance
as well.
List of Documents
Lenders and used car dealers require certain documents to ascertain
your credibility as a used car buyer. Keep the following list of
documents ready:
1. Your ID and SSN
2. Income & Employment Proof
3. Residential Details
4. Bank and Financial Statements
5. Receipt of Utility Bills, if any
Down Payment and Co-signer – Ideal for Approval
No matter what amount of money you earn, your car loan approval
chances can be increased by having down payment and co-signer. This
amazing duo has the potential to turn the tides.
Make down payment of at least 10% of the total car loan cost. If you
don’t have money for making a down payment, use your old car as
trade-in. It is an ideal way of avoiding cash down payment.
Convince someone with a good credit score to become your co-signer.
Explain it to him that you will make regular payments. Make sure you pay
regularly because your co-signer is taking a huge risk.
Apply with a Lender
Before applying with a lender or an online auto financing company, make sure that the company offers auto loan options to people with low income.
There is no point in wasting time with lenders that don’t offer loans
to people with limited income. Also, check the reliability of the
lenders.
Post Application Work
Compare Auto Loan Quotes
When you receive auto loan quotes for buying a used car, don’t just
consider monthly payments as the factor for comparing loan quotes. Do
remember to study APR, loan terms and conditions, clauses, penalties,
etc. before choosing the best car loan quote.
Choosing a Used Car
When you get approved for an auto loan, it’s time to buy your
reliable used car. You can buy a car from a private party or a dealer.
Do ask the lender if he is fine with your choice. It shouldn’t happen
that the lender has a problem with your car.
Ensure that the title is clean and it’s not a salvage car. Also, ask your trusted mechanic to check the car.
By following this process, you will definitely get the car of your
choice despite low income. Hope you get the best low income auto financing program for buying a used car.
Best of Luck!!!
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