Applying for a Car Loan When You Live Off of Social Security or Disability Income

Posted: Wednesday, October 30th, 2019

Many lenders are reluctant to finance someone whose income is based solely on social security or disability. If you happen to have a bad credit score, the odds against you securing a loan are even greater. Here at Green Light Auto Credit, we specialize in providing loans for disabled persons with bad credit who are living on a fixed income. We believe that even if you have a less than ideal credit rating, or have experienced bankruptcy, you should still be able to get the car you need.

Things to Know Before You Apply for a Loan on Social Security or Disability

The following tips will make it easier for you to secure a car loan if you are living on a fixed income:

Green Light Auto Credit Older Couple and Son Get New Car
  • Know Your Credit Score: It’s always a good idea to regularly check your FICO score in order to make sure that the information is correct. That way you can avoid any surprises when you apply for a loan.
  • Prepare a Down Payment: Try to save up for a down payment. It will help you get a better interest rate on your car loan.
  • Situational Issues: If your credit rating is bad because of a situational issue such as medical bills, you should disclose this to your lender. It will show them that your poor score is not due to simply neglecting your payments.
  • Second Income: If you have a fixed income, lenders will not be able to garnish wages in the event of a default on your loan. In some cases a second income, even if it’s small, can provide the lender with enough reassurance to sign off on your loan application. Make sure you’re well aware of the income limits for SSI and report your earnings to your caseworker, so you don’t run into problems later down the road.

Getting a Loan While on Social Security

Can you get a loan on social security? You can, but there are some points to be aware of. If you enter into a loan agreement, the cash value of the loan or the item received isn’t considered income; it won’t reduce your SSI benefit on its own. If you borrow funds, any funds not spent in that month will be counted toward your SSI resource limit, which is $2,000 for a single person and $3,000 for a couple. If at the beginning of the month the value of your resources is greater than the allowable limit for SSI, you won’t receive SSI for that month.

SSI Car Financing & Getting a Car While on Disability

Like taking out a loan, buying a car on SSI is possible, but there are limitations to note. If you’re an SSI beneficiary, your household is allowed to own one car, so long as it’s used as a means of transportation for you and others in your house. Cars are one of the few items not counted toward the SSI resource limit, assuming your household has just one. There are no restrictions on the car’s make, model, or value. Leasing a car on SSI is also a possibility, because you have no ownership of the car, so it isn’t counted toward your $2,000 or $3,000 resource limit.

If you have SSDI, on the other hand, you can buy multiple cars; there are no limits to how many assets you can have while receiving benefits. Buying a car on a disability allowance is not only possible, but there are no limitations. SSDI is given to individuals who are disabled and have met the required amount of work credits. Assets that would be of interest to SSI, such as the value of your home and how much money you have, aren’t of interest to SSDI. This is just one of the many differences between SSDI and SSI.

Get the Car You Need Today

A fixed income or bad credit doesn’t have to keep you from buying a car for yourself or your caregiver (if you don’t have a license). The experts at Green Light Auto Credit have considerable experience helping people just like you. Why wait? Fill out our online loan application to get the ball rolling today. Please feel free to contact us if you have any more questions about buying a car with social security income.