Purchasing a car is not too difficult of a process. For consumers obtaining an auto loan for the car, they are usually for rather small amounts and repaid over just a few years. Most consumers are eligible for some type of car loan, although those who are currently unemployed may face the most difficult time getting financing.
If you’re aiming to get a car loan, but you have no job, here are five rules that will help you increase your chances of driving away in the new car you’re hoping for:
- Lower Your Expectations – If you’re trying to get a car loan with no job, you may want to avoid thinking about walking onto the lot and driving off in a $50,000 vehicle. Find an affordable option that will allow you to finance a smaller portion of the purchase price in order to increase your likelihood of approval.
- Save Up A Down Payment – To get a loan if you don’t have a job, you are going to need to save up a much larger down payment than if you were employed. Most vehicle lenders which will loan to borrowers without jobs required a minimum downpayment of at least 30% of the purchase price. In some situations, this down payment percentage may be even higher.
- Improve Your Credit History – To a lender, the single most important thing associated with your loan application will be your credit history. If you’ve had financial trouble in the past, it is important to make sure those problems are settled and your profile looks spotless before seeking to obtain an automotive loan, especially with no job.
- Provide Other Sources Of Income Or Funds – A traditional job isn’t the only source of income that a lender will consider when deciding whether or not to approve you for an auto loan. Financial institutions look at your job for proof that you’re able to pay back the loan. If you have income from other sources, such as disability or child support, the lender will be more likely to approve you. Also, if you happen to have significant assets save in the bank or in investment accounts, lenders may be willing to consider that as security against your loan.
- Look For A Co-Signer – If you’re simply not able to get approved for a car loan with no job, you may want to think about finding a co-signer. A co-signer is someone who will sign with you, on the loan, and will act as a financial guarantor to the lender in case you do not make your payments. This means that they are also financially responsible for your loan, and your failure to pay can hurt their credit score. If this is your only option, consider asking family and close friends if they would be willing to help you out.
Getting car loans with no job is no easy task, but it is certainly accomplishable if you’re committed. It is not something that will likely happen overnight – it takes time to save up a down payment and make improvements to your credit in order to look the most favorable in the lenders’ eyes. By being informed and taking the time to find a loan before going to the car dealership, you are most likely to get your new car, even with no job.