Car loans are one of many options that Canadians can choose when looking to pay for a new car. Like other kinds of loans, car loans tend to come with minimum requirements that involve some form of income. So, does this mean you cannot get a car loan if you don’t have a job?
In this article, we’re going to answer the question ‘can you get a car loan without a job,’ offer some tips for getting approved for a car loan without a job, and go over the usual minimum requirements for car loans in Canada. Learn more below.
Financing a Car Without a Job
So, can you get a car loan without a job?
Whether you have just lost your job, you’re between jobs, or you cannot physically work, everyone is entitled to a form of transportation that makes things easier for them. While it can be tricky, you definitely can get approved for a car loan without having a job.
While traditional lenders may not be your best option, shopping around with online lenders and non-traditional places can help you to find car loans that are available without a job or with bad credit.
Tips for Getting Approved for a Car Loan Without a Job
Getting approved for a car loan without a job is going to be more challenging than if you have a stable income from an employer, but this doesn’t mean it’s impossible. Below, we have collated our top tips for getting approved for a car loan without a job.
A Big Downpayment
Anyone applying for a car loan knows that offering a bigger downpayment can reduce your monthly repayments and the length of the loan, but it may also make it more likely you will get approved for a car loan if you don’t have a job.
This method will show your chosen lender that you are financially stable and communicates that you are a less risky borrower. However, this does mean you will have to save up a sizable chunk of cash and essentially goes against the idea of a car loan!
Be prepared to have to offer a downpayment on any car, and consider the amount you will need before applying for your car loan.
A Co-Signer
A co-signer is an effective way of making your loan application more likely to be approved. A co-signer is someone who would be responsible for paying your loan if you don’t make the payments yourself.
Most people opt for a family member or partner, but anyone in your life with good credit and a stable income is an excellent option for a co-signer. Keep in mind that asking someone to co-sign your loan is a big undertaking and essentially leaves them saddled with your debt if you are unable to pay.
Co-signers make a loan much less risky, meaning a lender is more likely to approve your loan if you do not have a job but do have a co-signer with a job.
Proof of Other Forms of Income
A job isn’t the only form of income that you have, and showing this to a lender is a good way to make approval more likely. Other forms of income could include
- Child support
- Disability payments
- Alimony
- Freelance income
- Trust fund
- Spousal support
- A pension
- Investment dividend
- The income from a rental property you own
It is important to note that some lenders do not accept these as forms of income and may still decline your application.
Usual Minimum Requirements for a Car Loan
As with a personal loan, there are some minimum requirements that lenders ask for when giving out car loans. These are important to consider when you apply for a car loan.
The minimum requirements are as follows.
- Income requirements: At least $1800 per month.
- Credit score: The higher your score, the more likely you will be approved. Note: it is possible to get a car loan with lower or no credit now if you seek out specialized lenders.
- A driver’s license: Some lenders also allow learner’s licenses.
- Age requirements: 18 or 19 years of age depending on the province.
Looking For a Car Loan With Bad Credit History? Car Loan Masters Has Got You covers!
Car loans are made simpler when you go with Car Loan Masters. We’re a car financing and loan company in Markham specializing in car loans for people with no or low credit. We can have you approved in as little as 20 minutes, so why not get in touch today and find out more about how we can help you out?