Having a car can be an essential part of a daily routine and often a necessary tool for working. When you’re unemployed it can feel like an endless cycle of needing a car for work while also needing work to pay for a car.
At FA Financing, we have designed a way of helping people improve their chances of getting an auto loan even without being on a payroll. But before we go into that let’s talk about the nitty-gritty of applying for an auto loan.
Generally, auto loans are structured as needing proof of one, some, or all of the following:
- What type of car you’re applying for
- Credit score
- Employment History & Income
- Downpayment
- And sometimes a Co-signer
Not only do all the above elements play a role in your being approved, but they also affect what your loan looks like in terms of interest rates, monthly payment size, as well as the length of the loan term.
To put it plainly, your interest rate is simply the cost of borrowing money from the lender for your car. The higher your interest rate is, the more you’re going to pay each month. Short-term loans with a lower interest rate mean you’ll pay less overall.
Typically, auto loans run from two to seven years. It all depends on the vehicle age, mileage, and whether a short-term or long-term loan will work best for you and your lifestyle. With shorter loan terms you will pay more each month but will pay off the car faster. With longer loan terms you pay less each month but over a longer period of time.
What type of car fits your needs?
An essential component of your application will be what kind of car you’re looking to apply for since your monthly car payment is going to vary significantly based on the type of car you decide on. For example, if you’re looking for a larger car with more cargo space like a truck or SUV you will most likely have to pay more than a basic sedan. This also goes for the car’s year. Generally, newer cars result in more expensive monthly payments than older, pre-owned vehicles.
Applying for a loan is a big undertaking, so it’s imperative that the result provides you with the perfect vehicle to suit your needs, and so it’s important to figure out what those needs are, factoring in questions such as…
- What kind of features are necessary for you? CarPlay? Backup Camera? Blind-spot monitoring?
- Will you need an all-wheel drive?
- Do you need lots of trunk space?
- How many passengers will you generally have to carry?
- What types of roads will you be driving on?
- How much garage or parking space do you have?
- What kind of fuel economy are you looking for?
- Do you have children and if so, will you need car seats, what kind of safety features are important to you?
At FA Financing our vehicle inventory holds a large array of different vehicles that support vastly different needs. When we start preparing for your loan application, we’ll work with you to determine your budget and personal preferences to decide on just the right type of car. Once you know exactly what kind of car you want, we’ll be able to assess the rest of the factors needed to secure your loan.
Credit Score
There is no one specific number that is needed to qualify you for a loan, however, having a higher credit score might allow the down payment as well as interest rates to be lower. At FA Financing we work with an array of lenders that can accommodate applicants with different credit histories and not so perfect credit profiles.
Employment History & Income
At FA Financing we understand that we are in a new age of employment, and it tends to look different than it once did when employees simply existed on a payroll. Unfortunately, many lenders in San Diego make it a bit difficult to obtain auto financing without a pay stub. The reason proof of income is so essential in determining whether an applicant will be approved is that lenders must take into consideration their ability to pay it back in the period that you’ve applied for.
However, with FA Financing, our pool of lenders can accommodate applicants who are currently unemployed, self-employed, or retired, some of which accept applications with no proof of income. We have several alternative methods to prove your income to the bank. These options range from bank statements to deposit slips to payment services transaction statements like Zelle, Cashapp, or Venmo, to even job letters. In some cases, we can waive proof of income all together. These can all be considered in the approval process by our network of lenders.
Downpayment
The downpayment is another key ingredient to the overall loan application that can increase your chances of being approved especially if you are currently unemployed as it shows lenders that you are more likely to make the monthly payments despite not having current employment.
Co-signer
When you’re unemployed and applying for a loan, having a co-signer can be an additional outlet in securing a loan. A co-signer is a person who is agreeing to jointly apply for the loan. With this you are both equal owners of the vehicle, and equally responsible for the loan. Because of this, you want to choose a co-signer very carefully, and only use them if it increases your approval odds, the terms of the loan, and ultimately you trust this person with your finances.
The bottom line…
Though all of the elements above play a factor, there’s not one definitive path to securing your needed loan. The lenders we work with look at applications holistically. And with our expert credit analysts and financiers who know the ins and outs of the auto loan process, we can help you find just the right vehicle in and around the San Diego area even if you are unemployed. We understand that there are pit stops and road bumps along the way that can hold you back. But we’re here to help you drive smoothly! Contact us online today or by phone at (858) 752-9835 to apply for your next auto loan.
