When you apply for a car loan, the lender will want to know several important pieces of information about you. This will usually include your credit score, stability of residency, income, and down payment amount. If you recently started your own business, it might be hard to prove your income, though. Here are some tips that will help you get approved for auto financing, despite your current situation.
Build On What You Do Have
Instead of focusing on the fact that you cannot prove your income, try to build on what you do have. If the income verification is the only problem you have when applying, it will help if all the other factors are strong. For this purpose, you will probably want to make sure you have a decent credit score. A score of 680 or higher is usually considered good; however, as long as your score is no lower than 620, you should not encounter too many problems getting financed for a car.
The second thing you can use to your advantage is a down payment. If you have a decent amount of money to put down on a car, a lender may not view issuing you a loan as a super risky investment. This is because if you are willing to put a lot of money down on the car, you probably have every intention of paying the loan. After all, if you fail to make the payments, the lender could repossess the car, and this would cause you to lose your investment into the vehicle.
While it might not be required, you should be prepared to put at least 20% down on the car. Not only could this help improve your odds of getting a loan for the car, but it will also help keep your car loan equal to or less than the actual value of the car you are buying. If you have $1,000 to use as a down payment, look for a vehicle that is priced at $5,000 or less.
The other factor that can help your case involves the stability of your residency. Most lenders want to see that a person has lived in the same place for at least one year. This is an important factor because living in the same place for a year or more shows stability, and stability is an important factor in creditworthiness.
Show The Income You Have
Building on the factors that make you a good candidate for a loan can be helpful when you are negotiating a deal with a lender, but the lender may still want to know that you have a job and income coming in. The problem is that if you just started your business, you may not have a lot of records to prove this.
What you can do is show them the records you do have. If you have a bank statement from last month that shows money coming in, show them. If you have copies of outstanding invoices that reflect money owed to you, show them. Without any proof of income, it might be harder to get a loan; however, all the good factors you have going for you may help offset this one factor in your situation.
The requirements for getting approved for auto financing vary from lender to lender. If you find that you are having trouble getting approved through a regular car dealership, you may want to visit a dealership that specializes in offering loans to people with little or no credit. Those types of dealers can typically offer financing options to anyone, even to a person that has no proof of income.
If you still have questions, click here to read about auto financing services in your area.
Share8 June 2016
After dealing with car repair after car repair, I started thinking about ways that I could prevent future problems. I started taking my car in for regular tune-ups, focusing on things like tire rotations and never forgetting an oil change. I also kept careful records that helped me to track my vehicle's performance. This blog is all about maintaining your vehicle as efficiently as possible, so that you might be able to save money and prevent issues in the future. After all, who has time and money to get their car fixed constantly? Thanks for reading our blog and have an awesome day!