If you’re self-employed you know that your income can fluctuate from month to month making it difficult to budget for large purchases like a car. But with careful planning and a solid understanding of your finances it is possible to get a car while self-employed. Here are a few tips to help you make the process as smooth as possible.
1. Know your credit score.
Your credit score is one of the most important factors in getting approved for a loan so it’s important to know where you stand before you start the loan process. You can get a free credit report from each of the three major credit bureaus once a year so make sure to check your score before you begin shopping for a car.
2. Have a down payment saved up.
A down payment shows lenders that you’re serious about the purchase and that you have the financial means to make the monthly payments. Generally you’ll need to put down at least 10% of the car’s purchase price so start saving early so you can make a larger down payment and get a lower interest rate.
3. Shop around for a loan.
Once you know your credit score and have a down payment saved up you can start shopping around for a loan. Be sure to compare interest rates and loan terms from a few different lenders before you make a decision.
4. Get a cosigner.
If you’re having trouble getting approved for a loan on your own you may be able to get a cosigner. A cosigner is someone who agrees to sign the loan with you and is legally responsible for making the payments if you can’t. This can be a family member or friend but make sure you choose someone you trust and who has a good credit score.
5. Consider leasing.
If you’re not ready to commit to a car purchase you may want to consider leasing. This can be a good option if you don’t have the cash for a down payment or if you don’t want to be tied to one car for the long term. Keep in mind that with a lease you’ll have to make monthly payments and you may have to pay fees at the end of the lease.
6. Get insurance.
Once you have your car be sure to get adequate insurance coverage. This will protect you financially if you’re in an accident or your car is stolen.
7. Create a budget.
Finally be sure to create a budget for your car expenses. This should include your loan payments insurance gas and maintenance. By knowing how much you need to budget each month you can avoid financial stress and keep your car purchase on track.
Can I get a car loan if I’m self-employed?
Yes you can get a car loan if you’re self-employed.
You’ll need to provide proof of income such as tax returns bank statements and payroll records.
How much can I borrow for a car loan if I’m self-employed?
The amount you can borrow for a car loan if you’re self-employed will depend on your income and credit history.
What is the interest rate on a car loan if I’m self-employed?
The interest rate on a car loan if you’re self-employed will depend on your income and credit history.
How do I apply for a car loan if I’m self-employed?
You can apply for a car loan if you’re self-employed by visiting a bank or credit union.
You’ll need to provide proof of income such as tax returns bank statements and payroll records.
How long does it take to get a car loan if I’m self-employed?
The length of time it takes to get a car loan if you’re self-employed will depend on the bank or credit union you use.
Do I need a down payment for a car loan if I’m self-employed?
A down payment is not required for a car loan if you’re self-employed but it may help you get a lower interest rate.
How do I make payments on a car loan if I’m self-employed?
You can make payments on a car loan if you’re self-employed by setting up automatic payments from your bank account.
What is the minimum payment on a car loan if I’m self-employed?
The minimum payment on a car loan if you’re self-employed will depend on the amount you borrowed and the interest rate.
What is the due date for a car loan if I’m self-employed?
The due date for a car loan if you’re self-employed will depend on the bank or credit union you use.
Can I prepay my car loan if I’m self-employed?
Yes you can prepay your car loan if you’re self-employed.
Doing so may save you money on interest.
How do I refinance my car loan if I’m self-employed?
You can refinance your car loan if you’re self-employed by visiting a bank or credit union.
You’ll need to provide proof of income such as tax returns bank statements and payroll records.
How do I calculate my car loan payment if I’m self-employed?
You can calculate your car loan payment if you’re self-employed by using a car loan calculator.
How do I get a car loan if I have bad credit and I’m self-employed?
You can get a car loan if you have bad credit and you’re self-employed by visiting a subprime lender.
You’ll need to provide proof of income such as tax returns bank statements and payroll records.
How much does GAP insurance cost if I’m self-employed?
The cost of GAP insurance if you’re self-employed will depend on the lender you use.
Will I need collateral for a car loan if I’m self-employed?
Collateral is not required for a car loan if you’re self-employed but it may help you get a lower interest rate.
