According to the Bureau of Labor Statistics, the unemployment rate in the first quarter of 2023 is 2.6%, with 283,000 people without jobs. 2.6% might sound reasonable, but not if you’re one of the jobless.
Even though the COVID-19 pandemic brought the world to a standstill, some industries, like the service industry, have never recovered. Over 2.5 million workers lost income in the first quarter of 2022. Some in these industries haven’t fully recovered.
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If you fall into the unemployed or under-employed category, you know getting reliable transportation is a big key to getting a better or more permanent job.
Can you get a car loan without a job?
Although challenging, securing a car loan without traditional employment is possible by providing alternative income sources or additional documentation.
What is required to get a car loan?
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Lenders use the following criteria to approve a borrower for a loan because they want assurance that monthly payments will be paid consistently over the loan term. One of the most important aspects is creditworthiness, which helps demonstrate past financial responsibility. If you were eligible for the American Rescue Plan, your credit might not have been too damaged while waiting for income and you may have some money in the bank.
- Proof of employment – Lenders often want borrowers with stable jobs and steady income.
- Creditworthiness – A good credit score demonstrates your ability and willingness to repay debts on time. Here’s how credit scores affect interest rates and how you can get a free credit report.
- Demonstrated ability to repay the loan – Your debt-to-income (DTI) ratio will determine your ability to pay. Your car payment needs to be under 15% for a new car and 10% for a used car of your net monthly income.
- Down payment – Borrowers typically need to provide a down payment of 10% and 20% of the car’s cost. However, sometimes, lenders may accept lower sums depending on credit score and job security.
- Vehicle information – The make, model, year and mileage of the vehicle you intend to buy can affect whether a lender will give you a loan. High mileage, older vehicles may not be worth the loan amount, which means lenders see no resale value in the car.
Source: https://tholansonnha.com
Category: Finance
