For those on disability income, it might seem impossible to imagine getting a car loan on disability. But while it can prove difficult, it is far from impossible.
And you’re certainly not alone in the United States. About one in every 25 Americans is receiving Social Security Disability Benefits. That’s millions of people in the same spot as you.
Car Loan On Disability
The knock on getting a loan on disability income is that, unlike regular income, disability payments cannot be garnished if a person fails to make payments. Lenders might be reluctant to extend an offer to someone in that position.
However, there’s no reason to give up on your dream of having a new car. There are steps to getting a loan on disability. They include the following.
Check Credit Report in Advance
It’s critical to have a clean credit report. Make sure all payments have been made on time. Use tips to improve your credit, such as disputing any errors on your report. Doing this in advance will help your chances and give credit bureaus plenty of time to clean up any mistakes. A clean report is especially important for getting a loan on disability.
Show Other Income
Generally speaking, most auto loan lenders will want to see an income of around $1,500 per month. If you have income sources other than disability payments, gather together the paperwork demonstrating this fact. It can go a long way toward convincing lenders to extend you a loan. This is especially true if you have a long history of making that extra income.
Not a Chronic Issue
One of the situations that keeps people from seeking a loan while on disability is the fact that they may have incurred a large amount of debt. It’s important to communicate to lenders that this is because of your medical condition, not a chronic problem with high credit debt. Again, this can increase your chances of success in getting a loan on disability.
Is there anyone among your friends or family who are willing to be co-signers on your loan? If someone is willing to do so, a lender will consider your ability to repay the loan based on their income and credit rating. This removes the issue of disability income.
Size of Loan
If you are attempting to get a loan on disability, it’s wise to pick a modestly priced car. That will keep the loan amount at a lower level. It also will increase your chances of approval.
Keep these tips in mind as you begin the process of searching for a loan while on disability. There are many lenders who are willing to work with those in less-than-perfect cash and credit situations.
Also, with online services such as Apply and Buy, you can get matched quickly with lenders who are willing to consider extending an auto loan. That convenience is especially useful for those on disability income.