What Lenders Consider for an Auto Loan

Milad Hassibi May 2, 2018

If you have been struggling to get approved for an auto loan with less than ideal credit, you are not alone. Having a car is a necessity for work and home life. It’s important that as a consumer you are aware of what auto lenders look for in their applicants.

Lending requirements can vary from location to location, but here are some of the main factors lenders will use in order to determine your eligibility for an auto loan.

Your Credit Score and Credit History

There is no question that one of the largest factors in determining if you are approved for an autoPaper with credit history along with a stack of copper pennies loan is your credit score and credit history.

These days, lenders have become cautious of borrowers with bad credit. Depending on the car, lender, and dealer, it can be hard to say what minimum score is needed to get you approved for an auto loan.

Down Payments

A down payment is the money you provide up front on an auto loan before you drive the car off the lot.

Most lenders and dealers will require a minimum down payment of $1,000 or 10% of the purchase price. If you can provide a higher down payment than 10% or $1,000, it shows the dealer that you are invested in the auto loan and less likely to default on your payments. If you cannot provide a down payment, it will be hard to find a lender that can work with you.

Employment History

Ideally, lenders want to lend to borrowers who have a stable job history. Having a stable job history indicates that you will have a steady stream of income to pay off your auto loan on time.

Typically, lenders want to see an employment history of at least 1-2 years long or more. If you have a history of jumping from job to job, explain to the lender why.


Although income requirements can drastically vary from location to location, the usual minimum income needed for an auto loan is $1,600 per month pre-tax. Having a steady income is another strong indicator to lenders that you are able to pay off your loan balance and the fees associated with your loan.

Final Note

There is no question that browsing around and trying to find an auto loan with less than perfect credit is difficult, but CrediReady can help. We have a nationwide database of lenders and dealers who are more than open to work with you and your credit score. Take a moment to fill out our free no obligation form today and start car shopping today!

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