How Can Single Mothers Get Approved for a Car Loan?
One of the most difficult groups of people to get approved for loans
is the group of single moms.
Lenders know that single moms typically have
low income and big expenses, both of which are considered as red
flags for financing. Even if you receive child support, you still
pay for the majority of the upkeep of your child and home.
But a reliable car is a not just a want but a need. You need your
own ride to bring your kids to and from school. You also need it to
go to work and run errands.
But late-model cars are often the most reliable ones. Choosing an
older car may be budget-friendly at first but repairs and
maintenance could be costly over time.
Fortunately, there are a few lenders today that offer auto loans for
First of all, you have to understand that your financial situation
wonít get you into a car loan that easily. Lenders are looking for
steady income if not excellent credit. If you donít have both, it
will be difficult to get approved for an auto loan.
But there are several ways to make lenders say yes.
- FIND OUT YOUR CREDIT STATUS. Get a copy of your credit
report before applying for any credit. You are entitled to a free
copy every 12 months via
AnnualCreditReport.com. So donít hesitate to pull one out.
- ELIMINATE DEBTS. Pay down as much debt as you can.
Lenders do not just assess your ability to make money but they
also compare that against your expenses and liabilities. Your
application will look better if you donít owe that much.
- ASK SOMEONE TO BE YOUR COSIGNER. A cosigner lessens
credit risk. He or she, though, must have excellent credit in
order to qualify.
- PUT DOWN A BIGGER AMOUNT FOR THE INITIAL PAYMENT. A
bigger down payment helps anyone get approved for a loan because
itís like showing lenders that you are capable to pay the loan
back. It also gives them more security.
Auto loans for single mothers are a kind of high-risk loans. If they
are not managed well, theyíll cause great damage to your credit and
You can avoid this by following these practical tips:
- Get into another job or a business. You need to earn more not
just to get approved for a loan easily but also to have enough
cash for your car payments. You can get into a part-time job or
sell stuff. You can also turn your hobby into a lucrative
- If your budget is stretched to the limit, look for ways to cut
your expenses. Perhaps, you need to downsize your food expenses,
clothing allowance, groceries, etc.
- Talk to only legitimate lenders. You may not know it but there
are a lot of unscrupulous lenders out there. They take advantage
of people who have poor credit and low income and are desperately
looking for a car.
- Check out organizations that support single parents.
Sometimes, these groups give away free cars to single moms. If you
find one, thereís no need to get an auto loan or look for cash to
purchase your own ride. But take note that these cars came from
donors so donít expect them to be brand new.