How The Impact Of Child Support Affects Your Auto Loan

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  2. How The Impact Of Child Support Affects Your Auto Loan
If you have damaged credit, are looking for an auto loan, and either receive or pay child support you may have a rough time when trying to get approved. Make sure that you know what you are getting into ahead of time and that you are sure of how exactly child support is going to affect your status before applying for a loan.

Income Issues

Child Support and Auto LoansThe main reason that payments like this will be so affective is because they are not garnished. Thus, this will create a problem for most lenders to finance bad credit for used cars. As a result of that most lenders are extremely cautious when taking into consideration aspects of child support as part or all of your income. There will be a few situations though where the lenders will take into consideration. The first will be if you have another source of income that can be garnished. Of course the higher that this income is the better chance you will have in successfully getting approved. The other situation will be if you have long term residence stability and if your credit is situational versus habitual (when your credit is lower because of a situational reason such as medical expense). If you fall under these categories then it is likely that you will have a much better chance.

You will also need to provide proof of child support to the lender as well. This can be done in a few ways so ask your lender what specifically they accept would be the best bet for this.

Payment Issues

Now if someone is required to make payments and they are behind then that definitely will create some issues. One of the most common things that will happen with this is someone who jumps from job to job trying to avoid garnishments on their paychecks. Also this will appear on their credit score report as well, and after reading that most lenders will reject the application.

If this happens to be you there is something that can be done, and if you make some arrangements with child services to catch up then typically you can get lenders to consider you for a loan.

Getting that Loan

While child support income or payments will be able to create issues for most people having a bad credit score will be much more devastating. Make sure that you have all of the proper documentation when you walk in from the very beginning.

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Do you meet the basic qualifications?

  • At least 1 year with current employer
  • A minimum income of $1,500 per month
  • No repossesions within the last year
  • Any bankruptcies must be discharged
  • Money down may be required, but not in all cases
  • Must be a current resident of the U.S. or Canada