Why You Have to Be 18 to Get a Car Loan
Seventeen-year-olds can ’ t take out a cable car loanword, or flush become a cosigner or co-borrower on one. In the U.S., you absolutely have to be 18 years erstwhile in order to legally sign a lend sign. Up until you turn 18, you ’ re considered a minor by law and can ’ t enter into a contractual agreement with a lender. This credibly international relations and security network ’ thymine what some teenagers want to hear, but it ’ s the police. Besides, there are many other factors outside of your historic period that you have to consider when it comes to qualifying for an car loan. even 18-year-olds are going to want to do their due diligence before they consider applying .
Auto Loan Requirements
even if you were allowed to take out a loanword when you ’ re only 17 years honest-to-god, it ’ s probable that you would have a hard time meeting the typical car loanword requirements.
Reading: Can You Be 17 and Get a Car Loan?
here are four criteria lenders consider when qualifying you for an car loan :
- Credit – You have to have qualifying credit in order to get approved for a loan. The minimum credit score you need varies from lender to lender. Subprime lenders, for example, specialize in helping borrowers with bad credit or no credit get financed. They’re more likely to be able to work with a borrower with a credit score below 600 than mainstream banks or online lenders, who tend to have stricter credit score requirements. It’s not uncommon for 17- and 18-year-olds to have little or no credit, so this is likely to present a road block.
- Income and Employment – You also have to be able to meet the lender’s minimum income requirement. Obviously, lenders aren’t going to be interested in approving loans for borrowers who aren’t going to be able to pay them back. How much you need to make varies by lender, but subprime lenders often require a minimum monthly income of at least $1,500 to $2,000 before taxes. Outside of the legal implications, not many 17-year-olds are able to meet such an income requirement. You also have to have a job, or at least a steady income from another source that you can prove you’ll receive for the entire loan term.
- Residence – Lenders also have rules pertaining to an applicant’s residence situation. Generally speaking, they want to know where the vehicle is going to be parked, which is why they require you to prove the location of your residence. Don’t be surprised to be asked to provide a utility bill in your name at the address listed on your application to serve as proof of residence.
- Identity – You have to provide a valid driver’s license or state ID to serve as proof of identity. This also has to prove that you’re at least 18 years old. The ID has to be valid, which means it can’t be expired, suspended, or revoked.
needle to say, the general requirements for a car loan are going to be difficult for younger borrowers to meet .
The Bottom Line
You can ’ thyroxine be 17 and get an car loan, and even most 18-year-olds are going to be facing an uphill climb to get approved. These younger consumers are going to be better served if they take some time to prepare for a car loanword in the future. Start by establishing a good credit history arsenic soon as potential, and make preparations to be able to meet lenders ’ other typical requirements.
Read more: Credit Saint Credit Repair Review
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