Auto Loan Requirements
Auto loan requirements can be difficult for some people with bad credit to meet. If you guessed that you need a credit score of at least 620 in order to get an auto loan, you are actually mistaken. The whole “credit score of at least 620” mostly applies to mortgages and deals with the FHA home loan requirements. Getting an auto loan is totally different than getting a mortgage and is naturally going to have a different set of requirements. Luckily for people wanting to get themselves a car, an auto loan is much easier to get than any home loan.
The question that I know you are wondering is whether your credit score is going to affect your ability to get an auto loan. Although your credit score is going to probably affect whether a lender chooses to work with you, it is not one of the essential requirements in car loans. The most important requirements deal with being of legal age, having citizenship in the United States, having a fairly good financial and employment history, as well as earning money from a job. Most of these are not too hard to meet for people with bad credit except “having a fairly good financial history.”
I want to point out that you are going to need to be at least 18 years old before you start worrying about meeting auto loan requirements; because you must be this old to take out any loan. A second thing I should probably mention is that you are going to need to have a social security identification card that you can show your lender to prove that you are a legal citizen. If you don’t currently have a social security card or are not aware of your number, you will have a very tough time getting yourself an auto loan.
The requirements of “age” and having “United States citizenship” (as proved by your social security number) are going to be easy for most people. When financial history comes up, the auto loan process can get somewhat complicated. Most lenders are not going to be sticklers for making sure that you have a great FICO credit rating, but some might. What’s more important than your credit history is whether you are currently bankrupt.
You are not allowed to have any “open bankruptcies” if you expect to get an auto loan. It should be common sense for most people that asking anyone for a loan when you are bankrupt is going to be impossible; I don’t recommend you waste your time trying. The next most important auto loan requirement is that you have been able to hold down a job for at least 6 months. If the auto loan lender is able to find out that you have a good employment history, you will have a much better chance of getting your car loan.
Finally, you will need to make sure that you are making at least $20000 per year. Some lenders will require you to be making more, while some may not require as much. If you are buying a very expensive car, then you are obviously going to need to make more money than just $20000. With that said, if you are buying a very inexpensive or used car from a dealer, you probably can take out a loan and be making closer to $15000 per year. Twenty-thousand dollars is just a rule of thumb that you can use to figure out whether you pass the auto loan requirements.
As I mentioned earlier, getting bad credit auto loans are way easier than getting home loans. The requirements are not very hard for most people to meet. The only minor difficulty that you may experience is getting a job that pays you enough money to cover the interest.
