Can You Get a Car Loan While on Benefits?
Can You Get a Car Loan While on Benefits?
Posted on January 31, 2023
If you’re currently on EI (Employment Insurance) or disability, can you get a car loan or refinance a car loan?
People are increasingly finding themselves in difficult positions through no fault of their own. Whether it’s coronavirus or something else entirely, we are living through challenging times right now.
Yet life has to go on.
If you need a car to get around but aren’t working right now, here's how you get a car loan or refinance an existing loan while on EI or another social security benefit.
Car Loans While On Benefits
Car loans are based on income and affordability so, in theory, you could get a car loan even if you’re on benefits. It won’t always be easy and affordability is a big concern but if you have the means, we can find you a car loan.
The process for applying for a car loan while on benefits is the same as any other time. You will need to be able to prove your income and demonstrate beyond reasonable doubt that you can afford the loan.
You will need:
Proof of your EI or social security: The same as if you were in work, you will need to demonstrate your income with evidence to back it up. If you’re temporarily on benefits and have an end date or expected return to work date, that can help too.
Proof of other income: If you have investments, other jobs, or other income, you will need to prove that too.
Proof of savings: If you have a rainy day fund or cash put aside for emergencies, it will help your application if you can demonstrate that. Bank statements showing any savings will help here.
Affording The Loan
As your income is going to be limited, even temporarily, you will need to prove that the car loan will not leave you in an undue hardship. Your main challenge will be demonstrating this to the lender.
Social security is a very basic tool to help you survive difficult times, for many of us, there isn’t much left over once bills are paid to pay for much else.
If you’re in a more fortunate position and can afford car loan payments and can prove it, you can apply for a loan.
You might benefit from some expert help to make that happen though. That’s what we are here for. Contact us to learn more.