Getting a Used Auto Loan Without a Job

A Credit Article Contributed by Kris Griebe

I Don't Have a Job, Can I Get a Used Auto Loan?

Used auto loans are available to anyone wishing to obtain one, whether you have a job or not. If you do have a job, it will obviously be easier, but it is still possible to get a loan without a job. You might be wondering how this is possible, given that you have no income. But the truth of the matter is that everyone needs a vehicle, after all, how can you GET a job without reliable transportation?

Having a Cosigner Will Help You Get a Used Auto Loan.

So what, you don't have a job. Do you know someone that does? Maybe they are willing to help you out. If you have good credit, a cosigner can help you find that used auto loan you have been looking for. They might even be able even if you have bad credit! If you fill out a loan application, and add a cosigner, the company who you are applying for a loan from will treat it as if your cosigner is applying with you. If they have a good job, and good credit, then chances are you will be approved!

But how does this work? Your cosigner acts as a guarantee for the company issuing the loan. If for some reason you cannot pay them, then they will seek out your cosigner and collect the debt from them. Both you and your cosigner must have a clear understanding about this, since it is someone that you know and this could have a major impact on both of you if you default on a payment. As long as you take care of your obligations, especially your used auto loan, you will not have to worry about this happening to you.

What If I Get a Job, Can I Take My Cosigner off My Used Auto Loan?

In some cases, yes. If you go back to the company with whom you have your used auto loan, you can request to refinance it, by yourself. This time, you can use your job and your good credit to get approved for the loan, without your cosigner. This means that they are no longer financially responsible, only you are. This can be a great relief to your cosigner, who has their own finances to worry about.

Another option is to go to another loan company, and take out a loan through them. You can then use this loan to pay off your used auto loan, effectively removing the responsibility your cosigner had for your automobile. Another added bonus to doing this is that you can also apply for more money than you need to pay off your used auto loan, giving you a cushion for repair expenses or to up-grade your car.

Sometimes refinancing can also reduce your interest rate, thus saving you money during the time you spend repaying your loan. So, when you find a job after you get your used auto loan, it is a good idea to attempt some form of refinance, that way you can remove the financial responsibility from your cosigner, and hopefully reduce your interest rates as well!