What Are Small Car Loans?
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is the Smallest Car Loan You Can Get?
What Factors Affect How Big of an Auto Loan You Can Get?
Credit score Debt-to-income ratio Employment status
Pros of Small Car Loans
Cons of Small Car Loans
Small Car Loan Requirements
Is no more than 10 years old Has less than 100,000 miles on it Has a non-branded title (meaning the vehicle does not have a car title indicating it has previously suffered serious damage) Is passenger vehicle
Getting a Small Car Loan
A valid driver’s license A recent pay stub as proof of income (generally must have year-to-date pre-tax income of at least $1,500 to $2,000 per month from a single source) Contact information for references (may need six to eight references) Proof of a cell phone or landline in the borrower’s name A down payment (often must be at least $1,000 or 10% of the vehicle’s selling price, whichever is lower)
Tips for Lowering Your Car Loan Payment
Save enough money for a large down payment so the total amount you’ll need to finance is lower. Buy a used vehicle instead of a new one. Research various lenders to ensure you’re getting the lowest interest rate possible. Work to increase the value of your car you currently own before trading it in. Opt for a basic model of your chosen car, leaving behind nice but ultimately unnecessary extras like heated seats or a leather interior, to lower the overall cost of the vehicle. Consider looking into how to refinance a car if you already have an auto loan but believe that market conditions or your improved financial situation could help you get a better interest rate on your loan. You also could opt to lengthen your loan’s term through refinancing to lower monthly payments.
3 Auto Loan Refi Tips
Refinancing your auto loan could lead to lower monthly car payments and more money in your budget. Lantern by SoFi can help you find the right automobile refinancing loan for you. Shortening the term of your auto loan may increase your monthly payments, but you’ll likely pay less in interest over the life of the loan. Generally, the newer your car, the lower the refi interest rate. This is because younger cars typically have a higher value than old or used cars — and the car serves as collateral for the loan.
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