Can You Get Approved for a Car Loan on SSI?

Lenders examine several factors when deciding on a car loan.

For so many Americans, having a personal vehicle is a necessity of life. In places without good public transportation, a car may be the only way to do basic errands such as grocery shopping and picking up needed prescriptions. Even people with disabilities need and want vehicles. However, if your primary income is Supplemental Security Income (SSI) from the U.S. Social Security Administration, you may have a more difficult time securing an auto loan, but it's not impossible.



SSI presents a problem for car loan applicants because it's a relatively low, fixed income. Lenders care about your ability to make your monthly payments. On the positive side, Social Security is a stable, reliable payer, and lenders are unlikely to question your likelihood of receiving your income. Your low income can be offset by several factors, including low household expenses and any income from your spouse or other members of your household. It also helps if you don't have much outstanding debt. This makes creditors feel that you have few competing commitments and are therefore better able to pay.


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Your assets, including real estate holdings, securities and commodities can also influence a lender's willingness to finance a car. Naturally, if you have collateral or assets that you can liquidate, a lender takes less risk issuing a car loan.


Credit History

If you have successfully paid off a car or home loan before, lenders see you as a better risk on a car loan. Your credit card history and any other financing also affect your credit rating. A high credit score may overcome lenders' concerns about your income and allow you to proceed with a car loan. Don't be surprised if creditors demand higher interest rates than you may have previous experienced. Your SSI income makes you a higher risk loan recipient, and financial institutions typically require higher profit margins when they take chances.



Lenders may be more inclined to support your car loan if you can contribute a significant down payment. This shows your commitment to the purchase because you have more to lose by defaulting on the loan. It also means you don't need as much loan money as you otherwise might. In a worst case scenario, obtaining a co-signer may get you a loan that a financial institution is hesitant to make. Find a friend or family member with good credit and finances to help assure lenders that someone will repay the loan no matter what.