Auto Financing Program for Buying a Used Car – Low Income won’t affect your Approval Chances

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!!!