Living on Social Security and a fixed income can come with lots of challenges. Among them, being able to secure a car loan. It can be more difficult to convince a lender to take a chance on you.
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According to Emil Sultanov, a car-buying expert and the founder of Long Term Car, “Fixed incomes and tight budgets often make traditional financing options seem out of reach. Securing a car loan on Social Security is possible with proper planning and preparation.”
Here are nine tips to help you get a car loan if you rely on Social Security.
Check Your Credit Score
GOBankingRates talked to several car-buying experts. They echoed one top tip: Check your credit score.
“A strong credit score can enhance your chances of securing favorable loan terms,” Sultanov said. “Address any issues or discrepancies in your credit report before applying.”
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Determine a Budget
Here’s a tip that applies to anyone looking for a car loan, including those on Social Security. You should look at your monthly budget to see how much you can honestly afford for a car loan. Don’t forget to include expenses such as insurance, maintenance and fuel.
Shop Around
Another tip that’s relevant for anyone looking for a car loan — especially for those on Social Security — is to shop around and compare loan offers to find the most favorable rates and terms. You could check out banks, online lenders and credit unions.
Explore Special Financing Options
Also, seek out lenders and dealerships that offer financing specifically for individuals with fixed incomes. Per Sultanov, credit unions often provide more flexible terms compared to traditional banks.
Understand the Loan Terms
Don’t rush through things. Carefully look at the terms of any loan offer. Sultanov suggested paying close attention to interest rates, loan terms and additional fees. Make sure the monthly payments fit within your budget.
Consider a Co-Signer
Want a loan and possibly better terms? Consider a co-signer. Lenders look for co-signers with good credit history and enough income to assume responsibility of your debt should you default.
Save for a Larger Down Payment
If you want to make your monthly payments more manageable, consider a larger down payment to reduce the loan amount needed. Aim to save as much as possible before applying for a loan.
Buy a Used Vehicle
If you’re on a fixed income, perhaps a used vehicle is the way to go. If you look for a reliable used vehicle with solid ratings for value and longevity, you can help lower the loan amount and make financing more feasible.
Lean on a Professional
A final tip is to seek professional advice if needed. According to Sultanov, “If you need personalized guidance, consulting with a financial advisor can offer valuable insights and assist you in making informed decisions.”
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This article originally appeared on GOBankingRates.com: Social Security 2025: 9 Tips To Help You Get a Car Loan
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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