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Financing a Car Loan When Unemployed: How to Get Approved

Financing a Car Loan When Unemployed: How to Get Approved

‘I’m between jobs right now and I need a car to get to interviews. Can I get a car loan?’ This was the question we were asked the other day. It’s more common than you might think, so we thought we would answer it here in a blog post as well as answer the client directly.


We asked our Hamilton car loan team about what options are there for unemployed people who want a car loan.


Car loans and the unemployed


First, the bad news. Unless you have income from other sources sufficient to live on and repay the loan, an unemployed person will not qualify for a car loan.


You do have options though, which we’ll get to in a minute.


A lender is obligated to ensure that any loan they approve will not put the borrower into financial hardship. If you have no steady income, a loan will likely make life difficult.


Lenders also want to know for themselves that the borrower can afford the repayments. Lending is a business and there is an expectation that any money they lend will be repaid with interest.


So, unless you have other income, you won’t be approved for a car loan.


What are the options for unemployed people?


If you’re between jobs and need a car to get around, there are options. Not all of them are ideal but they are still options.


Use a cosigner – If you know someone with a good job, good credit score and who trusts you enough to co-sign a loan for you, this could work. Depending on the amount you want to borrow, a cosigner could be all you need to qualify.


You will need the means to repay the loan though. A cosigner guarantees the loan if you don’t pay, they aren’t there to pay it for you.


Prove other sources of income – If you have other income from rents, investments, pension or something else, you can use that as proof of income. If it’s sufficient to meet your daily needs as well as repay the loan, it should be enough.


You can use income statements, your tax return or other official paperwork to prove income.


Borrow a car – If you’re just looking for a runabout to get you to interviews, you could always just borrow a car. It’s cheaper than a car loan and would allow you to approach a car loan from a position of strength once you’re working.


Uber to interviews – Again, less than ideal but still an option. As long as Uber or other rideshare app operates in your area, you can just get to an interview using a ride. You might even arrive fresher if you’re not having to drive!


Remember, we can provide competitive car loans even if you have only been working a day. As long as it’s a permanent job that pays enough to qualify for a loan, we can help get you back on the road!


When you’re ready for a car lease or loan, get in touch with the Hamilton auto loan experts at Northway Ford for great deals on auto finance.


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Categories: Car Loan

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