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There is no limit to how much lenders who work with Car Deal Expert can loan. How much you can borrow depends on your credit score, monthly income and job history. It also depends on the car you want to buy.

There are no restrictions on what type of car you can buy with your online auto loan. However, the lender must agree to accept your car as collateral for the loan. If you want to borrow $20,000 for a 10-year-old sedan, the lender probably won’t be comfortable using that as collateral. But if your lender doesn’t accept your collateral, that probably means you should not pay that much for that vehicle.

Credit score

A big factor in how much you can borrow is your credit score. If you have a good credit score you’ll be able to borrow more. Your credit score is based on how much credit you have versus how much you are using and how often you make payments on time.

It is up to the credit bureaus to decide, based on your history of repaying credit, how much credit you qualify for. Then it is up to the lenders to decide how much of that they are willing to give you. Once you start making payments on your loan, your credit score will improve whenever you pay on time.

Monthly income

Many lenders prefer borrowers who make at least $1,500 per month. This is not a set-in-stone rule, but if a lender sees that you make at least that much, it’s a plus. How much you can borrow depends on how much you can pay each month and how long your lender is willing to give you to pay off the loan.

Your monthly payments should only make up a small percentage of your monthly income. Most lenders will calculate the percentage you are spending on your loan each month versus your income. Different lenders have different standards, but your lender will try to protect you from taking on a loan that’s too expensive for you. Of course, lenders also want to protect themselves from never getting paid back.

Job history

Lenders prefer it if you have had your job for at least six months. Generally, it is not a good idea to buy a car if you are unemployed or don’t have a steady income anyway. Usually, after six months, a lender has faith that you will hang on to your job.

If you have a strong job history, meaning you keep jobs for several years, this will push up the amount the lender is willing to lend even more. The longer you’ve had your job, and the more proof you have that you have a good history of job security, the more your lender will feel comfortable loaning you.

How much should you borrow?

The general consensus among the auto industry and the credit industry is that the total cost of your vehicle should be only 20 percent of what you make in a year. That means if you make $25,000, you should only spend $5,000 on a car.

Granted, $5,000 is not a lot of money for a car. But $25,000 a year is not  as high a salary as you would need for too large a loan amount, either. The value of a car depreciates very quickly. Cars are not investments. A lot of people end up in trouble with their car payments because they just had to have a new car or a nicer car than they could afford. If you can’t find a car that fits into your budget, keep looking.

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