Login / Signup


Car Financing With a New Job

Updated on April 9, 2024

At a Glance

  • New employees can secure a car loan based on factors like job title, duration, and credit status.
  • For those with bad credit, lenders may require a minimum employment duration of six months to a year.
  • Income stability, additional income sources, and having a cosigner positively impact approval chances.
  • Making a down payment is crucial for improving approval chances, reducing interest rates, and lowering monthly installments.

People with new jobs often have the desire to improve their social conditions. Some plan a vacation a few months in advance, some purchase a house, some enroll themselves in a course, while others plan on purchasing a brand new car.

The majority of people buy a car with the help of a loan. But as a new employee, is this an option? Let’s answer that question.

Can a New Employee Get a Car Loan?

First of all, you don’t necessarily need to be employed to qualify for a car loan. You can always obtain a car loan irrespective of your employment status, or the job title you hold. And there is a long list of circumstances under which you can get a loan.

As you will see in the section below, lenders will check your job title and duration, among other factors, to determine whether or not to lend to you.

What’s the Minimum Employment Time to Get an Auto Loan?

If you have a bad credit history, then lenders will probably look at your employment duration to approve your auto loan application. Depending on the lender, the duration can be a minimum of six months to a year.

Why Your Job History Is Important to Lenders

To understand how lenders decide whether or not to lend money, you need to understand the factors used to determine the eligibility criteria. Some of the major ones are:

Current Status of Your Credit

Your current credit status, along with your credit history, is the most important factor that decides your eligibility. You can either have good credit or bad credit. When you have good credit, lenders will look at the duration you have held your current job. On the other hand, if you have bad credit, they will then focus on the term of your employment even more.

Other Considerations for Lenders

Your line of work

While gauging your auto loan eligibility, the lenders will also look closely at your line of work. This is the particular field you’re involved in. Say, for accounting. If you’ve been an accountant for all your working years, but simply changed employers, lenders will take note of it. They may also ask the reason for switching employers if you had in the past.

Is the income steady and verifiable?

Are you getting paid on a timely basis, and can you prove it by submitting paychecks or payslips? You might have a job, but if you’re getting paid irregularly and there are a lot of deductions, then it may negatively influence your loan approval decision-making process. Some lenders will go as far as to look past the newness of the income source, which they may or may not disclose.

Any other source of income?

If you’re showing extra income above what you’re getting at your current job, then you need to describe the source. This can be from a side hustle or federal benefits like court order payments for child support or an annuity. Depending on the auto loan provider, this income may be considered legit.

Cosigner

While not mandatory, having a cosigner can increase the chances of getting an auto loan, even if you are not employed. Some lenders make it mandatory to have a cosigner while applying for a loan.

Download the Car Financing with a New Job Checklist

New job and need car financing? Download our checklist for a seamless and successful application process!

Get the Checklist

Increase Your Chances With a Down Payment

While you cannot control the final outcome, you can certainly increase the chances of getting an auto loan amount with a down payment. A down payment is an amount paid to the lender upfront. Not only does it increase your chances of getting a loan, but it also reduces the interest rate and total loan repayment amount, both of which can save you money in the end.

How a Down Payment Can Influence the Interest Rate and Repayment

Since the down payment is a sum paid upfront, it reduces the principal debt. Let’s say your interest rate was initially 10%, and the loan amount is $50,000. So the interest you incur in the first year is $5,000.

If you make a down payment of $5,000, then the annual interest total will be $4,500. Take note that the 10% remains the same, just that there is a decrease in the amount of money owed, which will reflect the monthly repayments.

Let’s use the same example. In the case of a loan without a down payment, if you opt for the 12-month payback period, then your monthly installment will be around $4,167. With a down payment of $5,000, your monthly amount will stand at approximately $3,750. This will make it relatively easier to pay back.

Benefits of a Down Payment

Some of the benefits of a down payment are already discussed above. Let’s explore the benefits thoroughly in this section. Here is an in-depth guide on down payments you might want to read.

  • Lower interest rates: Your interest rates will be lower when you take an auto loan with a down payment.
  • Lower monthly installments: There will be a reduction in the monthly bills that you have to cover while paying off the loan.
  • Better equity: Equity is the difference between how much the car costs and how much you owe. If the loan amount is more than the car costs, then you’re running on negative equity and vice versa. By depositing a down payment, you bridge the gap and have more equity.
  • Manageable debt levels: The higher you make the down payment, the less it will be a burden on you. Thus, it will be much more manageable down the line.
  • High chance of auto loan approval: When you make a down payment, lenders will have more confidence that you will pay back the loan. So they will be less hesitant in approving your auto loan application.

How Much of a Down Payment Is Enough?

There is no one standard answer to this question. As a general rule, the more down payment, the better. However, you should take into account your current financial conditions, future planning, interest rate, and lender policies. You can even get a soft credit check auto loan!

6 Best Auto Loans to Help Buy a Car With a New Job

Starting a new job often means new beginnings and sometimes the need for a reliable vehicle to get to work. If you’re in the market for a car and require additional financial assistance, a personal loan can be a practical solution. Depending on your credit history, different lenders may offer varying benefits. Here’s a look at some lenders who could assist you in securing a personal loan for your car purchase.

Spotlight Loans (Best for Bad Credit)

Starting a new job shouldn’t stand in the way of securing car financing. With Spotlight Loans, individuals can access flexible loan options designed to accommodate changing employment status. Their quick and hassle-free application process ensures customers can get behind the wheel of their dream car with ease, regardless of job tenure.

Spotlight Loans

4.8
Stilt rating
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

6.63% and up

Variable APR

N/A

Overview

  • Minimum credit score: n/a
  • Variable APR: 4.99% and up
  • Loan amounts: $100 – $5,000
  • Repayment: Depends on choice of lender

Qualifications

  • Be 18 years of age or older
  • Have a checking or savings account
  • Have regular income
  • Have a fair credit rating

Pros

  • Spotlight Loans is willing to work with individuals who have less-than-perfect credit, making it a viable option for those who may struggle to secure loans from traditional lenders​​​​.
  • Spotlight Loans offers same-day approval and funding, which is beneficial for those in urgent need of funds. This makes it a good option for emergency financial situations​​.
  • Unlike traditional payday loans, Spotlight Loans provides the option to repay the loan over a period of months, offering more flexibility in repayment planning​​​​.

Cons

  • One of the most significant drawbacks of taking a personal loan with Spotlight Loans is the potentially high interest rates. With APRs that can be much higher than traditional personal loan lenders, this can lead to substantial interest payments over time​​.
  • Spotlight Loans offers loan amounts that are relatively low, which may not be sufficient for all borrowers’ needs​​​​.
  • Spotlight Loans services are not available in all states, so it’s important to check if you reside in an eligible location before applying​​.

AmOne (Best for Okay to Good Credit)

AmOne is well-suited for individuals who have okay to good credit and are starting a new job. Their service connects borrowers with multiple lenders, increasing the chances of finding a loan with favorable terms. AmOne’s platform is especially beneficial for those who need a car to commute to their new job but might not have the perfect credit history.

AmOne Personal Loans

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 3.99%-35.99%.
  • Loan amounts: $1,000 to $50,000.
  • Repayment: 1 to 7 years.

Qualifications

  • Must be at least 18 years old.
  • Must be a U.S. citizen or permanent resident.
  • While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

  • Suitable for individuals with lower credit scores.
  • No cost for the matching service.
  • Attractive loan rates.

Cons

  • Acts as an intermediary, not a direct lender.
  • Risk of multiple contacts from prospective lenders.
  • Lack of clarity on lender details.

Spring Loans (Best for Bad Credit and No Credit)

Spring Loans caters to those who might be starting their career or have yet to build a strong credit history. Understanding that a car is essential for commuting to a new job, Spring Loans offers options for those with bad or no credit, focusing on broader financial indicators beyond just credit scores. This inclusive approach can help new job starters secure the funds they need for a car purchase.

Spring Loans Personal Loans

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Demonstrate a recurrent income.
  • Minimum age prerequisite: 18 years.
  • Validate U.S. citizenship status with an SSN.
  • Provide a legitimate U.S. driver’s license or a state identity card.
  • Establish a functional bank account for incoming deposits.
  • Adhere to any specific demands by the loan provider.

Pros

  • Open to applicants with any credit background.
  • Four-year loan period aids in structured financial management.
  • The $3,000 offer addresses several short-term financial challenges.
  • Wide-reaching eligibility criteria invite a broad spectrum of applicants.
  • The focus on dependable income over job title benefits varied income sources.

Cons

  • The set 27% APR is higher than many alternatives.
  • Restriction to a $3,000 loan might not cover all financial outlays.
  • Possessing specific IDs is mandatory, sidelining some applicants.
  • A prerequisite for an ongoing bank account may limit certain users.

First Premier Lending (Best for Bad Credit)

First Premier Lending specializes in helping those with bad credit. If you’ve just landed a new job and have a less-than-stellar credit history, First Premier Lending can provide personalized loan solutions. Their approach takes into account your entire financial picture, not just your credit score, offering a chance to secure a loan for that essential vehicle.

First Premier Lending Personal Loan

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%.
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Maintain a consistent source of income.
  • Must be at least 18 years of age.
  • Possess valid U.S. citizenship and a legitimate social security number.
  • Hold a current U.S. driver’s license or state-issued ID.
  • Keep an active bank account for direct deposit.
  • Satisfy any lender-specific criteria, such as credit rating, borrowing history, or place of residence.

Pros

  • No minimum credit score requirement allows accessibility for those with varied credit histories.
  • 48-month term provides clarity and allows for long-term financial planning.
  • Specific loan amount of $3,000 can meet many short-term financial needs.
  • Broad set of qualifications make the loan accessible to a wide range of people.
  • Emphasis on consistent income, not necessarily employment type, allows flexibility for borrowers.

Cons

  • A fixed APR of 27% is relatively high.
  • Loan amount is capped at $3,000, which might not cater to larger financial requirements.
  • Requirement of a U.S. driver’s license or state-issued ID could exclude some individuals.
  • Mandatory active bank account could be limiting for those who are unbanked.

Upgrade (Best for Good to Great Credit)

For those with good to excellent credit embarking on a new career phase, Upgrade offers competitive personal loan options for purchasing a car. Known for their straightforward application process and quick funding, Upgrade is an ideal choice for job starters looking for a hassle-free loan experience and favorable terms.

Upgrade Personal Loan

5.0
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

560

Fixed APR

8.49% - 35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 560
  • Fixed APR: 8.49% – 35.99%
  • Loan amounts: $1,000 to $50,000
  • Repayment: 3 to 5 years (7 years on some larger loans)

Qualifications

  • Possess an active bank account.
  • Able to provide a legitimate email address.
  • Minimum age requirement: 18 years (19 for Alabama residents).
  • Credit score of 600 or higher.
  • Annual income of $25,000 or more.

Pros

  • Willing to accommodate borrowers with a credit score as low as 560.
  • Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
  • Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
  • Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.

Cons

  • Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
  • Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
  • While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.

BestEgg (Best for Good Credit)

BestEgg is a great option for individuals with good credit who need a car for their new job. Their efficient approval process and competitive interest rates make them an attractive lender for those in stable financial standing. With BestEgg, borrowers can expect a smooth journey in securing a loan to purchase a vehicle, aligning with their new career endeavors.

BestEgg Personal Loan

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

8.99-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 8.99-35.99%.
  • Loan amounts: $2,000-$50,000.
  • Repayment: 3 to 5 years.

Qualifications

  • Targets borrowers with good to excellent credit; fair credit may qualify.
  • Minimum credit score of 600.
  • At least two years of credit history.
  • Minimum annual income: $3,500 from various sources like employment, alimony, and more.
  • Debt-to-income ratio: 40%, or 65% when including a mortgage.
  • Must be a U.S. citizen.

Pros

  • Soft credit check available for pre-qualification.
  • Offers a diverse spectrum of loan amounts.
  • Provides options for secured loans.
  • Direct payments can be made to creditors for debt consolidation.
  • Late fees are not charged.

Cons

  • Charges an origination fee.
  • Doesn’t offer rate discounts.
  • Initial payment date isn’t customizable.
  • Lacks a dedicated mobile app for loan management.

Read More

Conclusion

Purchasing a new car can be fun. However, it does come with responsibilities, the most important being making your monthly payments on time. Making timely payments will be good for your credit history and your ability to apply for more of these types of loans in the future.

Frequently Asked Questions (FAQ)

Can I Get Car Financing If I Just Started a New Job?

Yes, you can get car financing even if you’ve just started a new job. Lenders typically require proof of stable income, which can include a job offer letter or your most recent pay stubs.

What Do Lenders Consider for Car Financing with a New Job?

Lenders consider your credit score, debt-to-income ratio, the stability of your new job, and your income. They want to ensure you can afford the car loan payments.

How Long Do I Need to Be Employed to Qualify for Car Financing?

Some lenders require a minimum employment period, which can range from a few months to a year. However, others may approve you based on a job offer letter for a new job.

Are Interest Rates Higher for People with New Jobs?

Interest rates can be higher if you’ve just started a new job, especially if you have a limited employment or credit history. Rates vary based on the lender and your overall creditworthiness.

What Documents Will I Need to Provide?

You’ll likely need to provide proof of income (such as pay stubs or a job offer letter), proof of identity, proof of residence, and possibly other financial documents.

Can a Job Offer Letter Be Used as Proof of Income?

Yes, many lenders accept a job offer letter as proof of income, especially if the job start date is near and the salary is clearly stated.

Will My Job Type and Industry Affect My Car Financing Options?

Your job type and industry can affect financing options, as lenders may consider certain jobs or industries more stable than others.

Can I Finance a New or Used Car with a New Job?

You can finance both new and used cars with a new job, depending on the lender’s policies and the loan amount you qualify for.

Is a Down Payment Required for Car Financing with a New Job?

A down payment might be required, and providing one can lower your monthly payments and potentially qualify you for better loan terms.

What Should I Consider Before Financing a Car with a New Job?

Before financing a car with a new job, consider your job stability, the total cost of the loan, the monthly payments, insurance costs, and how it fits into your overall budget.

JOIN OUR NEWSLETTER
I agree to have my personal information transfered to MailChimp ( more information )
Join over 100,000 visitors who are receiving our newsletter and learn more about finance, immigration, and more!
We hate spam. Your email address will not be sold or shared with anyone else.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

Get the Checklist