Low Income Auto Loans: Step up Your Game If You Have Limited Income

In this day and age owning a car is a necessity. A car is no longer a luxury but an essential investment for an easy life. You may require a car for college or work especially when you need to commute long distances. An important aspect of getting a car loan is your monthly income. If you are a first-time car buyer or if your monthly income is low, you can still avail an auto loan. Understand all about how to avail an auto loan while you suffer from limited income.

Low Income Auto Loans: Pointers to Keep in Mind

 

The following factors will help you to understand how you can obtain an auto loan if you have a low income.

1. Buy a Car That Fits Your Budget

When you have a low income, look for a car that is within your budget. Exceeding your budget because you are tempted to buy a new car will not get you a good deal. Buy pre-owned vehicles that are cheaper than new cars. You can also look at older car models that are no longer up for sale or demo cars at the dealership lot. Also, make sure that you are able to make a down payment of at least 20% of the total cost of the car. Do not exceed the loan term by more than 60 months. Once you take your budget into consideration, you can avail an auto loan, even with a low income. 

2. The Debt to Income Ratio

A debt to income ratio calculates the total debt that you owe against your current income. You may receive faster approvals on your car financing if your debt to income ratio does not exceed 40%. Additionally, get rid of your previous loans or debt because when a lender calculates your debt to income ratio, they may include the amount of the current auto loan along with the car insurance. Therefore, aim at maintaining a lower debt to income ratio especially when you want to get low income auto loans. 

3. Income vs. Expenditure

Usually, a lender requires $1500 as the minimum gross monthly income to approve an auto loan. However, if your income is lower than $1500, there may still be a chance you can avail the auto loan. Lenders make use of the payment to income ratio, i.e., your monthly car payments divided by your pre-tax income. A payment to income ratio of 15% will get you through auto loan approval. However, in order to increase the chances of your approval, try to reduce your monthly expenditures in a way that you can display more savings per month. 

Stay Away from Factors that sabotage your Chances

Since income is an essential element for getting auto loan approval, make sure you take care of certain factors that could sabotage your deal. For instance, do not overlook the cost of title fees, registration, insurance, etc. The total cost of car ownership is an important element especially when you have a low income. Additionally, employment is an important aspect and lenders usually prefer people who have been employed at the same place for at least one year. Therefore, if you are thinking of switching jobs, wait until you get your auto loan. So, make sure you manifest the image of a credible borrower to get the most out of a low income auto loan. 

Got low income? You can still buy a car. Apply for low income auto loans online. Choosing a reliable bad credit auto financing company will help you make a car purchase at affordable interest rates. Get in touch today.

Co-Signer, Co-Applicant or Single: What is the Best Strategy for Bad Credit Auto Loans?

A bad credit score can make you question your current financial status. It can also impact the process of applying for an auto loan. When you have suffered from a damaged credit history, you may feel like the addition of a co-signer or a co-applicant can make your life easy. You do have a number of options in order to secure auto financing. A co-signer, a co-applicant and a single auto loan application are all your possible options. Throwing light on each option should help you figure out the correct choice for you.

Exploring Ways of Applying for a Bad Credit Auto Loan

 

Bad credit is not a situation that can paralyze you from getting an auto loan. The below options are important to help you apply for an auto loan with a strong case. Explore the different options and study the pros and cons to build your strategy. 

1. Seeking Help of a Co-Signer

Pros of a co-signer: A co-signer assures to repay the entire amount of the auto loan or any payments that you do not make. As they are liable to pay the auto loan amount, there is financial safety for the lender. The presence of a co-signer on your auto loan can help you get lower APR. A strong credit score of your co-signer can put you in a great position to get quick auto loan approval. 

Cons of a co-signer: The biggest problem of having co-signer is the co-signer itself. The auto loan terms and interest rates that you receive will largely depend on the credit score and financial standpoint of the co-signer. Any faulty remarks in the credit report of the co-signer will affect the credit terms that will be provided to the applicant. 

2. Finding a Co-Applicant

Pros of a co-applicant: Ideally, a co-applicant is a co-borrower who gets equal rights to the ownership of the vehicle. The existence of a co-applicant increases the chances of obtaining a greater amount on the auto loan. The combined income of both the co-applicants reduces the debt-to-income ratio, implying an overall less risk to the lender. 

Cons of a co-applicant: As a co-applicant has equal rights to the ownership of the car, any attempt to sell or trade-in the car or refinance the auto loan will require the signatures of both the applicants. Additionally, the inability of any one co-applicant to make payments will lead to a credit damage to both the applicants. Any car damage will also hold both the applicants liable. 

3. Single Applicant: Applying on your Own

 

Pros of a single applicant: When you suffer from a bad credit score, it becomes difficult to get an approval on your credit score alone. However, the positive side of being a single applicant is that you are in complete control of the auto loan. The efficiency of your payments will help you to build a stronger financial foundation. 

Cons of a single applicant: The presence of a co-signer or a co-applicant can greatly increase the chances of approval for your auto loan. The reason being that if you miss a few payments, the other individual can repay the auto loan. Also, a single applicant will get much higher interest rates as against an application that has a co-signer. 

The More the Merrier: Buying a Car with Bad Credit

In the case of a bad credit history, the assistance of a co-signer or a co-applicant will come to your benefit. A single applicant will not be able to avail the best deal due to high interest rates and small auto loan amount. A joint auto loan can help you to obtain a bigger car due to a larger loan amount. Therefore, when you think about your bad credit auto financing strategy, remember the more the merrier. 

Do you want a bad credit auto loan? Having a co-signer helps in getting approval. But it is not always possible to find a co-signer. Apply for no co-signer auto loans. The company will make online auto financing simple and easy for you.

How to Ascertain the Right Budget for your First Car?

Buying your own car is usually the first monumental purchase, mostly for young adults. You may require a new car for college or traveling to work. Making the right car purchase is an essential task as you are investing a huge amount of money into it. However, with the help of the correct budgetary tools and tips, you can buy the right car for yourself. 

Calculate & Measure: Tips for setting a Budget for your First Car

 

The following tools will help you ascertain the correct method of budgeting your new car and the required guidelines to score a great deal. 

1. Income Vs. Cost of Living

The most important question to consider while buying your car for the first time is: What is my budget? Always set a budget first and then start looking for a car. The simple way of ascertaining the budget for your first car is to calculate your cost of living. The cost of living is the amount that you spend on rent or mortgage, food and health insurance. The amount that remains after deducting your expenses from the monthly income is the amount that you can spend on car payments. 

2. Car Overheads

The money that you spend on your car is not limited to monthly payments towards your auto loan. Other associated costs also make up for a fair share of the monthly car expenditure. The gas that you utilize will depend on the mileage and can cost you $75-$100 approximately. Another overhead cost that you should consider is the insurance of the car. While insurance depends on the age and history of the car, it can cost you close to $80-$100 per month. As compared to your monthly payments, the overhead costs may look minimal. However, it is a good idea to budget the overall amount for the purchase of your first car. 

3. Financing Saviors

A great way to save money and manage your budget is to get the right car financing program. Pre-approved auto loans are a great way to fix your budget. You can also narrow down your car options once you have a pre-approved auto loan. A co-signer will be useful if you are applying for the first time. While negotiating the deal, paying more down payment will reduce your monthly payments. Additionally, you can shop around through online auto financing companies to get the best interest rates for your car. 

The above-mentioned financing tips will surely help you to create a budget in the right manner. 

The Budget comes First for a First-Time Car Buyer

 

Budgeting and calculating what to spend is essential for every purchase. When you set out to purchase your first car, glance through online publications such as Kelley Blue Book so as to make sure how much a car can approximately cost you. Speak to owners who are using the same car you want to buy and take reviews regarding its functioning. Remember, making a budget and adopting a cautious approach will help you make an informed car buying decision. 

Congratulations on deciding to buy your first car! Do not worry about applying for your first car loan. FastAutoLoanApproval.com has you covered. Apply now to enjoy quick approval on no credit auto loans. Co-signer is not compulsory. 

Congratulations on deciding to buy your first car! Do not worry about applying for your first car loan. we have got your back. Apply now to enjoy quick approval on no credit auto loans. Co-signer is not compulsory.