If you’re in the process of buying a car with low income, you are in luck. We are going to show you what steps you need to take when trying to get your car loan approved, don’t worry, it won’t be overly technical.
Taking a Closer Look at Your Credit Score
Lenders want to know how responsible you are with your money, and they have no way of knowing how you manage your finances aside from looking at your credit score.
There are two major credit reporting agencies in Canada; most car loan providers will use both of these platforms.
Your credit score has to be in the 720 or higher range to access the best car loans. You are able to get approved for a car loan if your credit score is over 600, but the interest rates are not going to be as competitive.
Since you are using non-traditional sources of income, it will require an additional level of underwriting, so you should work on your credit score to get it as high as possible. There is no major secret when it comes to raising your credit score; just keep your total credit utilization rate to less than 30% and always pay your debts on time.
How Unconventional are Your Income Sources?
When you fill out the application for a car loan, some of the questions will be about where you get your income. For example, are you self-employed or work as a freelancer?
If you are working primarily as a freelancer, you could provide links to your online profile and copies of contracts you have in place with your clients.
How your clients pay you is also something that lenders will want to look at; if you have clients paying you with Bitcoin or some other type of cryptocurrencies, you need to show the paper trail of how those funds entered your bank account.
Lenders follow the rule of “trust but verify” when they are underwriting a car loan. So, you need to show bank account entries for all of the transactions you are doing and have done for the last year.
This is a lot to ask, but you are asking the lender for a significant amount of cash, so you can appreciate their need for documentation.
Where to Buy a Car with Low Income
This is not something you should attempt to do on your own; reach out to dealerships in your area and let them help you find a suitable lender.
These dealerships have seen it all, so they will know how to prepare your loan application and which lenders are going to approve your car loan.
After the dealership has reviewed all of the details of your car loan, they will also give advice on how to repair your credit if you are having any issues.
So, when you go through a dealership, you will have complete peace of mind knowing you are going to be getting the most competitive terms based on your unique profile.
Click here to get approved for your next car loan online today! we have a team of credit specialists ready to help you easily buy a car in Hamilton with Low Income and will work with you no matter your credit score.