Nowadays, having a car is a necessity for everyone. For persons who are employed and self-employed, obtaining a car loan is rather simple, but for those who are unemployed, it can be extremely challenging. However, persons without a steady source of income can also obtain auto loans secured by a mortgage.
Provide Reliable Residential Evidence
You must provide the bank with the completely completed and signed application form as well as documentation of your identification, age, address, and income when applying for a car loan. Lenders may be ready to approve your application for a car loan if you can demonstrate home stability by living in the same place for more than a year.
Obtain a Car Loan using FDs
It's a well-liked method for unemployed people to get a car loan. When requesting a loan, you may use a fixed deposit (FD) you have with the bank as security. The lender approves the loan in this case and treats it as an OD (Overdraft) on your FD. Keep in mind that you must obtain the written permission of the co-holder of a joint FD before you apply for a loan if you have one.
Pick a Loan against your Current Vehicle
If you already own a vehicle, you may apply for a loan against it. In this case, your old vehicle serves as collateral for your car loan. Vehicle loans typically have terms of one to three years and interest rates of at least 14% annually. You can get up to 150% of the current vehicle's market value (the one you're using as collateral) when you apply for a loan against it. Empower Loans to help you to get the best interest rate on a LAP loan.
Put a Large Down Deposit
Having a sizable down payment on the car increases your chances of getting a car loan, even if you're unemployed. A sizable down payment substantially reduces the loan amount. Lessening the loan amount lowers the lender's risk, which encourages them to approve your loan application.
Take out a Car Loan using your Property as Collateral
It is comparable to a car loan secured by FD. The only distinction is that you are offering your property as collateral in this case. But be aware that if you can't make loan EMI payments on time, the lender might take possession of your house as payment.
Consider taking a Car Loan against Gold
Similar to a car loan secured by real estate, you are offering your gold jewelry as security. If you are unable to make the repayments on time, the lender may sell the ornaments that you have pledged.
Possessing a High Credit Score can help you win the day
Price scheme your trustworthiness, or your capacity to repay the loan, in addition to your income by examining your credit score and credit history. If you have a solid credit score and a clear credit history devoid of late payments or bankruptcy filings, lenders are more likely to approve your loan application.
Conclusion
Loan amounts and interest rates for car loans for unemployed borrowers may be lower than for loans for regular vehicles. The down payment and interest rates might increase. Invest your savings in a sizable down payment. If the bank where you bank is where you are applying for a car loan, ask your bank relationship manager to negotiate a lower interest rate.
