Low Income Auto Loans: Step Up Your Game If You Have Limited IncomeLow 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.

by Kaitlin Miller
References and Bibliography
Apply for low income auto loans online.
Rated:NR/0 Votes
Add To My Article Reading List
Add To My Article Reading List
Print Article
More Article By Kaitlin Miller
More Article by Kaitlin Miller
More Articles From Loans
More Articles From Loans
Related Articles and Readings
Low Cost Auto Loans - Save Money on Your Next Auto Financing By: Rachel Anthony
The terms of auto loan will settle on how much you are paying now and how much the overall auto financing cost you. ...
Auto Loans Brings Your Dream Automobile Within Your Reach By: Sara Chambers
An automobile is something more than an engine on four wheels. It is more than just another mode of transport. An automobile is the reflection of the personality and tastes of its owner. A person who owns a Rolls Royce is probably a person who gives top priority to quality ...
Advantages of Military Auto Loans Over Regular Auto Loan By: Rachel Anthony
There are so many people in the military that are unaware of the advantages they have because of their profession. One amazing offer is military auto loan ...
How to Get a Good Deal for an Auto Loans Online By: Rachel Anthony
These days online auto loans has become a very popular financing option for people with bad credit or any credit rating. ...
Before Shopping For a New Car Visit Your Banker By: Amy U. Goodmann
It's undeniable that feeling of excitement will rush through your veins if you're about to get a new car However, such positive feeling can get you into trouble with car loans if you let it cloud your reason and ...
The information provided in this article and/or the comments is the sole responsibility of their respective authors and does not necessarily reflect the opinion of ezinepost.com. ezinepost.com  does not endorse any article and/or comments published by our web users unless otherwise noted. 

Member Panel

login to submit articles and more


  • » Active Categories: 419
  • » Active Articles:252603
  • » Active Authors:31917
  • » Active Members: 38237
  • » Statistics Updated:
    - Tue Sep 1st, 2020 09:28AM EST