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How to Buy a Car on Minimum Wage: 2 Minute Guide to get a Loan

How to Buy a Car on Minimum Wage: 2 Minute Guide to get a Loan

If you are working at a job making $15/hr and need a car loan, there are options available.

 

While $15/hr may not seem like a lot of money, especially with inflation rates nearing double digits in Canada, you can buy a car on minimum wage. Our Hamilton auto loans team can help with that.

 

2020 Kia Soul EV available at Grimsby Kia

 

 

Is your job stable?

 

How long have you been working at your current job in Hamilton? Generally speaking, you want to be at your current job for at least three (3) months before taking on any new debts.

 

Three months is usually the probationary period with a new employer where they can let you go for any reason. Once you have completed your probationary period, then you are considered an employee, and the employer cannot dismiss you with cause.

 

This three-month period will also give you a chance to establish a baseline for your income.

 

Lenders will want to know how much money you are earning each month; these three months will help establish that average.

 

There is an adage, it is not what you make but what you keep that matters. This is very true when you want to buy a car on minimum wage in Hamilton!

 

If you make $30,000 per year, which is what $15/hr works out to but don’t have much debt, then you are a better credit risk than someone who makes $100k a year but is $90k in debt.

 

Source: moneyunder30.com How much to spend on a car

 

Prospective lenders will look at your income and then compare it to all of your liabilities.

 

There is a good chance with a wage of $15/hr, you just finished school, so you may have a student loan but no other big debts like an existing car loan or mortgage.

 

Lenders will add up all of your existing debts and then compare it to your gross income; so long as the debt-to-income ratio is under forty-two percent (42%) you will be fine.

 

Your credit score is what will make or break your car loan goals

 

You knew it was just a matter of time before we had to talk about credit. The good news is you can get a car loan provided you are not in a consumer proposal or bankruptcy.

 

To access the most competitive car loans, your credit score needs to be over 720, but so long as your credit score is in the 600s, you will get something competitive.

 

If you experienced credit issues in the past, you should address them as soon as possible.

 

Having a low credit score increases your borrowing costs. The easiest way to raise your credit score is to commit to always paying your debts on time.

 

Where to access the best car loans in Hamilton

 

You will not be able to access the best car loans online; when sourcing automobile financing, there is no substitute for experience.

 

Reach out to dealerships in your area and find out what type of car loan you qualify for; there is no cost or obligation.

 

The dealership will get you approved for the most competitive car loan, and since they have vehicles in their inventory, you can test drive the car today.

 

As you can see, it is possible to buy a new car working a $15/hr job, so contact the dealership today.

 

We’d love to help you buy a car on minimum wage! Simply fill in the form below and we’ll get back to you ASAP! 

 

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