When applying for a car loan, a proof of income is one of the determining factors as to whether or not the loan will be approved. Should you be seeking to acquire a loan and have no proof of income, read the following information which highlights what you should be knowledgeable of before speaking with a lender or dealership.
Be Ready With a Down Payment
Be aware that lenders will be hesitant to provide you with a loan without a proof of income. Instead, the lenders may require you to pay substantial amount of money for the down payment of the car. The amount of the down payment is determined by the lender and your credit score. At the very least, you will be required to provide a substantial down payment in order for the car to not be "upside down". In other words, the worth of the car should be worth more than what you owe on it. The lender requires more of a down payment from those who cannot provide income because if the payments are not received, it can repossess the vehicle and resell the vehicle without taking a huge loss. You should also be aware that loans secured with no proof of income will contain higher interest rates.
Check the Paperwork Thoroughly
Once you have provided a large down payment and get approved, you should still be wary, especially if the dealer arranges financing. Make sure you see the paperwork showing your approval prior to giving the dealer or lender any money. Some dealers have tricked buyers into believing that they were approved for loans when in reality they were not; taking their money, trade-in, or both, and leaving them with some serious problems later on. Your best bet is to get approved from a third party bank. In this way, you can be approved for a loan securely and most likely without having to provide a proof of income.
Take Overall Precautions
Getting a loan with no proof of income is possible, but you have to be careful. Stay away from predatory lenders and dealerships that will not show you proof of your approval prior to signing paperwork. You should also be wary of loans or financing that deducts payments from your paycheck on a weekly basis. Additionally, make sure to watch for the interest rates on the loan documentation. Interest rates have a tendency to be on the extravagant side, so you could end up paying vastly more for your car than you originally intended if you're not careful.