Getting a car loan with only a part-time job can be difficult, but it is still possible. There are several factors that will determine whether you are approved or denied. These include your income, number of hours, and down payment.
Sufficient Income from Part-Time Employment?
One of the primary factors that makes the difference between approval and denial is your ability to repay the loan. That will most likely hinge on exactly how part-time your job is. If you only work 12-20 hours a week, you will most likely be denied, no matter how much you put down. That’s because it’s unlikely that you will have sufficient income to repay the loan. Most lenders require a minimum weekly income of $375 per week. If you only work 12 hours a week, that would be an hourly wage of $31.25 – quite high. However, if you are like many in the work force and work around 32 hours a week, your chance of getting the car loan you need greatly improves. After all, you could meet the minimum income requirement if you make $11.72 an hour.
Can You Provide a Sufficient Down Payment?
Next, lenders are going to want to see a down payment. How large that down payment must be will depend on your credit score. If your score is 680 and above, you may only need 10 percent down. 620-680 and it will not be uncommon for you to be required to have 15 to 20 percent down. Under 620 and you may need as much as 50 percent down to secure a car loan. Only your lender or dealer specialist can tell you how much you’ll have to put down. We encourage you to apply online to speak with a representative about your options.
Factoring in Your Existing Debts
You will only be improved if your total debt repayment, including the loan you are applying for, accounts for less than 25-30 percent of your after tax income. That means multiple home or vehicle loans could make it more difficult to be approved. After all, lenders want to ensure that your budget is not so overtaxed with existing debts that you can’t repay the new loan.
While it may take some time, you can find the right loan. Traditional banks may balk at offering a loan with part time income, so stop by your local credit union. If that down not work, try an online company. Whatever you do, avoid a buy-here-pay-here dealership. These dealerships do not help you credit and sell high mileage cars that may not be as reliable as you need. It is better to apply online through a service such as ours, because we can help you get pre-approved through a dealer or lender that finances people with better rates and terms.