Even if you’re on disability, a car may be a necessity for your everyday life. And without a car, you might feel trapped, unable to get to doctor’s appointments and live your life to the fullest.

Being on a disability income doesn’t mean you can’t own a car – it just means you have to be smart about financing one. Here’s what you need to know about applying for an auto loan while living on disability.

Take a Look at Your Credit Score

Your first step in applying for – or even considering – an auto loan should be to take a look at your credit score. So many people simply ignore their credit score, but that single number can seriously impact your ability to qualify for an auto loan.

Lenders, including banks, credit unions, and auto dealerships, will take a look at your credit score in order to determine whether or not they’ll give you a loan. Your credit score shows lenders your credit worthiness, or your ability to repay a loan. The higher your score, the more likely you are to repay debts, and the more likely you’ll be to get a loan.

So, in order to figure out where you stand and what kind of loans you’ll qualify for, you’ll want to get your hands on your credit report in order to see your most recent score and your credit history. You can get a free copy once per year from any of the three credit ranking agencies:

  • Experian
  • TransUnion
  • Equifax

Once you have your credit score and report, make sure to take a look at your credit history. If anything is incorrect, file a dispute in order to get the issues removed. If there are any ways you can improve your score, such as by making on-time payments, finally paying off one loan or debt, or even limiting hard inquiries on your credit, you’ll put yourself in a better position for applying for auto loans.

Determine Your Budget and Gather Your Pay Stubs

Once you’ve assessed your credit score, it’s time to figure out how much you can afford to pay and set a budget. You don’t simply want to set a budget for a new car – you also need to determine your budget for your monthly auto loan payments. Remember, just because you can buy a $60,000 car doesn’t mean you can afford the monthly loan repayment!

To determine your budget, you’ll want to assess the following:

  • Your monthly disability income
  • Any additional income, such as pay from a part-time job or freelance work
  • Your monthly expenses

When you’re receiving disability income, you’re able to work up to 80 hours per month and earn a maximum of $810 per month in additional income. While this limits your income potential, it also helps give you an idea of how much money you could add to your budget and disability income if you have a job that you can safely and comfortably perform.

As you determine your budget, you’ll want to keep the requirements of most lenders in mind. According to CarsDirect, many lenders require borrowers to have a minimum monthly income between $1,500 and $2,000. When you’re on a disability income, lenders can’t garnish your wages if you fail to pay your auto loan – which is why the minimum is set.

If you income doesn’t meet this minimum, you may need to find a way to increase or add to your monthly income in order to afford a vehicle and secure an auto loan.

Once your budget is set, you’ll want to make sure you have financial documentation to prove your financial stability to lenders. Make sure you keep your pay stubs from any part-time work, your tax records, and your proof of disability eligibility. Many lenders will want proof that you’ve been on disability for at least six months.

Shop Around for Loans and Rates

With all of this information prepared, you’re ready to begin looking for the perfect auto loan. This is the step that will likely take some time, as you’ll need to get different loan options and interest rate offers from a number of lenders before you decide to sign.

Contact or visit different lenders in your local area. With your credit background and income level, see what options they can offer you. Make sure you take note of the interest rates and loan terms offered.

To make the process easier, you can search online and even get loan rates and offers right from home. You’ll just need to do some searching online in order to find lenders who work with those on disability – and you can start with dealerships and banks near you.

You can then compare all of the different options before you and make an informed decision. You may even be able to bargain a better loan deal with lenders with all of this information. Talk to potential lenders and let them know what offers and interest rates others have offered, and see if you can get a lower rate or more appealing loan.

Get a Co-Signer

One final step could help anyone on a disability income secure an auto loan: a co-signer.

While there are many lenders who have no problems offering auto loans to those on limited incomes or on disability, it might prove difficult to find and secure a loan with terms that work for you. If this is the case, a co-signer can make you more appealing to lenders and give you collateral to work with.

A co-signer can be anyone with good credit who’s willing to be your “second” on your auto loan. If you default on the loan and fail to repay it, your co-signer will become responsible for repaying the loan. While this is a big ask of anyone, your family members or close friends may be willing to co-sign in order to help you get auto financing. Make sure you talk this decision through with those closest to you if it’s an option for you.