Getting a job can be a bit difficult, and that shouldn’t stop you from getting a car loan. If you are not currently employed and still looking to get a car loan, then you have come to the right place. 500 Below has all the means to make that happen.
We realize that car finance is not something that comes easy, especially when you are on disability, on bad credit score, or maybe most of the income is coming from disability funds or social security. Sometimes the car you want requires a huge down payment to be made. But we don’t want you to lose any hope – as we believe, “DIFFICULT DOESN’T ALWAYS MEAN IMPOSSIBLE.”
How to get a car loan when unemployed
When you are unemployed, you need a car to get to job interviews to increase your chances of getting a job. First, we tell you the most commonly and ordinary ways of getting a car loan.
- Co-Signing a loan (taking loan in partnership)
- Showing financial stability (proof of living on the same address for a year and at least one-year experience of having worked in the same company)
- Showing good credit history to entice the lender
- Making a hefty down payment (to show that you are a serious buyer and will pay back the loan)
- One quick option for getting the money to buy a car is giving something valuable at the pawnshop
- Taking a short-term loan from a relative or parent
- Getting a loan at a higher interest rate
- Home Equity Line of Credit – like having a credit card where the equity in your home
Five ways to get a car loan when unemployed
Getting someone to cosign your loan
The best and perhaps the easiest way to get a loan during unemployment is by getting a co-signer. Having a co-signer puts you in a better position as it shows that there are two people responsible for repaying the loan. This can obviate the problem of not having a regular income.
However, the co-signer will have sufficient credit and income to pay the loan, and your success will impact their credit score, and so will your failure. So always make sure you pay your payments on time. If you co-singer has bad credit then check out this article.
Cosigning a loan makes the loan application attractive for the lender, and lenders are more inclined towards giving you better and favorable terms such as a low rate of interest, lower fees, and better flexibility.
People need a cosigner when they are incapable of applying for a loan alone. You can one of those people and desperately need a cosigner. There can be many reasons for that, such as bad credit rating, inadequate monthly income, or lack of credit history.
Show nontaxable income
Showing other sources of income such as:
- Social Security Disability
- Social Security
- Child Support
These are some of the non-taxable incomes that come along with the regular income, generally on a monthly basis. These sources of income can influence the loan decision to be in your favor giving the assurance that you are capable of making timely payments.
Other Types of Income Than Salary
When you don’t have any source of income, getting a car loan can be a bit difficult. However, there are many other ways you can get a car loan while being unemployed. All you need to do is show the lender that you have other sources of income to make the payments. If you can do that, there is no way you can’t get a loan.
As we have already established that you don’t have regular PAYG sources of income, but what most people fail to realize is that there are other sources of income that are viable and can help them get a car loan.
It’s time for you to start thinking outside the box and identify means to show proof of alternate income.
You might be a freelancer working from home, which can also count as a viable income. Make a record of your freelance income by showing your bank statements, incoming transactions, and eBay invoices.
You can also have a rental income or making a room available for rent at your property, also called automatic income. Any regular source of income you have can increase your chances of getting a loan.
Starting a New Job
If you are about to start your new job, then you must have the employment contract, and your date of joining has also been arranged. Some lenders do give loans on the basis of the employment contract. The employment contract is proof of income in the future. There are two conditions, however, that you need to meet in order to approve for the loan:
- There must be at least a one-month gap between your current and previous job
- Your new job is in a similar industry as your last job
Best case scenario, if you have passed through your probation period, then there is no way you shouldn’t qualify for a loan.
If you have decided to apply for an auto loan, we suggest opting for a cosigner or borrower. Get one of your family members, a relative, or a close friend to cosign the loan for you so that the procedure can go smoothly.
If you have other sources of income like the ones we mentioned above, bring us the documents that can prove that, and we will make sure you get approved for a car loan right away.
How 500 Below Cars Handles This?
We have thousands of customers who got approved for a car loan while they were unemployed. Yes, having a steady source of income is always a plus, but if you are currently not employed and looking to buy a car, we can help you.
Schedule an appointment with us so that we can work together and figure out alternate means and navigate all possible options that can help you get a loan. We can talk to your family members if they want to cosign for you, find other possible means of showing your income. In short, when you contact 500 Below Cars, you never leave disappointed. Schedule an appointment today