Question: Can I get a car loan with a temporary job?
Answer: Yes, it is possible to get a car loan with a temporary job. Applying for a car loan with a temporary job or a new one is certainly considered a risk for a lender, but it’s not one that will automatically knock you out of the running for financing.
Can I get a car loan if I just started a new job?
Most lenders prefer you to have been at the same job for six months to a year, with a stable work history over the last three years. Lenders give out car loans based on a risk assessment — borrowers with a steady job, good credit score and down payment are at less of a risk of defaulting the loan. This doesn’t mean you are out of luck if you have a new job or temporary job, though. You might just need to jump through extra hoops to show you are a qualified borrower.
If you’re temporarily employed, or you’ve recently started a new job, lenders might ask why you made the switch. Depending on your situation, you might need to provide extra documents, especially if you frequently change jobs, work on contract or have just entered a new field.
If required, you may be asked to submit the following to be considered for a car loan with a temporary job:
- A pay stub that lists your year-to-date earnings
- Tax returns from the last two to three years
Lenders might be more understanding if the change was for better pay or conditions, or due to relocation. However, if you often switch jobs or fields without advancing, it could hurt your approval chances, especially if your credit score is less than stellar.
What if I can’t get a car loan
If your temporary job makes it harder to get car financing, consider improving your credit score or putting a larger down payment down. You can also opt for a less expensive car or used vehicle to see if that fits better with the lender’s requirements.
If you’re still unable to meet your lender’s basic criteria for employment or income on your own, a co-signer or joint applicant could be the solution.
What is a co-signer and how can they help?
A co-signer is someone who agrees to take on the responsibility of your loan if you’re unable to make payments. They don’t have ownership of the vehicle but act as a guarantor. Having a co-signer with a strong credit history can boost your approval odds and potentially secure you a lower interest rate.
Pros and cons of using a co-signer for your car loan
Consider the benefits and drawbacks of using a co-signer to help you get a car loan if you have a temporary job.
| Pros | Cons |
|---|---|
| Improved approval chances: A co-signer with good credit can make it easier to get approved for the loan. | Shared credit risk: Any missed or late payments will affect both of your credit scores. |
| Better interest rates: You might qualify for a lower interest rate, saving you money over the life of the loan. | Potential strain on relationships: The financial responsibility could create tension between you and the co-signer if things don’t go as planned. |
| No ownership involvement: The co-signer doesn’t have a claim to the vehicle, so they’re only involved in the financial aspect. |
What is a co-applicant and how can they help?
A co-applicant applies for the loan with you and shares equal ownership of the vehicle. They contribute their income and credit history to the application, which can strengthen your overall profile. A co-applicant is not only responsible for the loan but also has a stake in the vehicle, making them a more involved partner in the purchase.
Pros and cons of using a co-applicant for your car loan
Using a co-applicant for your car loan can be riskier than a co-signer. Here’s what to consider:
| Pros | Cons |
|---|---|
| Increased approval chances: With two incomes and credit histories combined, you may have a stronger application. | Joint responsibility: Both parties are equally responsible for the loan payments, so any missed payments will impact both credit scores. |
| Shared ownership: Both you and the co-applicant have equal ownership, making them a true partner in the purchase. | Shared ownership: This can be a drawback if disagreements arise about the vehicle since both parties have equal rights. |
| Potential for larger loan: Combined incomes can allow for a larger loan amount, possibly letting you buy a more expensive vehicle. | Complexity in selling or refinancing: If you want to sell or refinance the vehicle, you’ll need the co-applicant’s agreement, which could complicate things. |
Sarah Gray is an insurance writer with nearly a decade of experience in publishing and writing. Sarah specializes in writing articles that educate car owners and buyers on the full scope of car ownership—from shopping for and buying a new car to scrapping one that’s breathed its last and everything in between. Sarah has authored over 1,500 articles for Jerry on topics ranging from first-time buyer programs to how to get a salvage title for a totaled car. Prior to joining Jerry, Sarah was a full-time professor of English literature and composition with multiple academic writing publications.
Ashley Eneriz is an editor and finance writer with over 15 years of experience in a wide range of financial topics, including car loans and insurance. In editing for Jerry, Ashley aims to make all car material reader-friendly for both the new driver and car enthusiast alike. Prior to joining Jerry, Ashley was the financial deputy editor for ConsumerAffairs. Her work is featured on Forbes, Yahoo, MSN, The Hartford and more.
