11 Nov Disabled Veteran Car Loan: What You Need to Know
A question that keeps Veterans wondering is, can you get an auto loan if you have a service-connected disability? While most disabled Veterans might be eligible for auto loans, many indeed face inevitable roadblocks. Working as a service member affects your credit score, which might impact your eligibility. Further, the VA does not offer car loans, making it even more challenging to qualify for one.
However, there are several other ways to get a disabled Veteran car loan. You can even get military discounts from credit unions and lenders. Keep reading to learn more.
What Is a Car Loan?
A car loan, also known as an auto loan, is the amount a person borrows to purchase a car. These loans are offered by banks, lenders, or an individual.
Can Disabled Veterans Get a Car Loan?
Borrowing a car loan as a disabled Veteran can put several roadblocks in your way. If you have a disability, you may not be eligible for a traditional auto loan. However, several organizations offer auto loan discounts to Veterans suffering from a service-related disability/condition.
Additionally, while the US Department of Veterans Affairs (VA) does not offer auto loans, several other organizations provide auto loans to service members and Veterans.
Does VA Disability Count as Income for a Car Loan?
Yes, VA disability can be counted as income for a car loan. However, it can impose specific difficulties, as the safety net of wage-garnishment won’t be available. It’s not impossible to get an auto loan with VA disability income as your primary income. With the following tips, you can quickly get a quote with great discounts.
Work on Your Credit Score
It doesn’t matter where your income comes from, as long as you can maintain a good credit score. Just pay your bills on time, consolidate any debt, and remember not to max out your credit card.
Show Some Extra Income
If possible, show some extra income that could provide a clear indication of revenues to the lender. Additional income can be a part-time job or rent. Moreover, you can show the proof of that income through bank receipts, tax documents, and pay stubs.
Consider a Co-signer
If your credit score is a bit shaky, you can consider a co-signer for the loan. If you fail to pay the installment on time, the co-signer can be a friend or family member responsible for making the payment.
Make a Downpayment
Making a small downpayment can make a vast difference in your application. Not only can this make you eligible for an auto loan, but it can also reduce your monthly payments to a significant level.
Bad Credit Auto Loans for Disabled Veterans
You can qualify for a disabled Veteran car loan even with a bad credit score. Several lenders offer military and disability discounts all year round.
Whether it is sudden deployment or living overseas, working as a service member can indeed have devastating effects on your credit score. Moreover, if you have a service-connected disability, showing VA disability pay as your primary income can affect your loan application.
Regardless, you can always join credit unions or military banks/military-friendly banks for military discounts and easy eligibility criteria. Organizations like Navy Federal Credit Union and United Services Automobile Association offer auto loans, even if you have a disability.
Moreover, if you have a shaky credit score or not-so-fair credit history, you can connect with private lenders who are ready to offer loans.
Why Personal Loans for Disabled Veterans Is a Bad Idea?
In most cases, personal loans can help you consolidate debts or pay emergency expenses at a lower interest rate and flexible guidelines. However, as a disabled Veteran, when your income might not be as stable, getting a personal loan can be a bad idea, especially if you lack any source of steady income or good credit history.
You would be required to pay higher interest rates without an outstanding credit score, which can be pretty troublesome, given your military status and frequent deployments.
Rather than opting for personal loans, you can go for a VA cash-out refinance loan. This loan is backed by the VA and allows you to refinance an existing VA or non-VA mortgage into a VA home loan. This loan will also allow you to tap into your home’s equity and use the extra cash to pay for your requirements.
The VA Can Help You Get a Car
Though the VA does not provide auto loans, it does help disabled service members get a disabled veteran car loan. To qualify for disability benefits, you must have any one of the following conditions:
- Permanent loss of use of one or both hands
- Permanent loss of use of one or both feet
- Permanent decreased vision for both eyes
- Severe burn injury
- Amyotrophic lateral sclerosis
- Ankylosis in one or both knees or hips
These benefits are offered to Veterans and service members and can provide a one-time automobile allowance of $21,488.29 to purchase a particular vehicle well suited for your needs.
The VA also offers adaptive-equipment grants to upgrade your vehicle with features like breaks, seats, windows, power steering, and lift equipment.
Other Options for Disabled Veteran Auto Loans
If you are not eligible for disability benefits for auto loans with the VA, there are several other ways to get the loan at lower interest rates and lenient guidelines.
Join a Credit Union for Service Members
You can join a credit union like Pentagon Federal Credit Union and Navy Federal Credit Union to get military discounts. In addition to offering auto loans, credit unions also provide other facilities like life insurance or home loans. You can also buy bundle insurance from one place to qualify for even more significant discounts.
Look For Private Lenders Who Offer Military Discounts
You can also search for private lenders willing to provide military discounts to disabled Veterans with bad credit scores.
Improve Your Credit Score
You can improve your credit score through the following ways:
- Use credit responsibly – Make sure to make responsible payments and use your credit in a better way.
- Do not max out your credit cards – Ensure that you pay the bill before the due date and try not to max out your credit cards.
- Don’t close old accounts.
- Settle and pay outstanding debts.
- Dispute errors on your credit report.
Disabled Veteran Car Loans: The Buying Process
Here’s what you need to do to get a disabled veteran car loan:
Figure Out What You Can Afford
To make sure that you shop under the budget, figure out what you want and how much you are willing to afford. You can search online for what vehicle suits your needs or get in touch with an agent.
Check Your Credit Report to Know Your Credit Score
The second step is to check your credit score and make sure that you pass the credit requirements of the lender or credit union.
Shop Around for the Best Loan Terms
You can shop around to get the best quotes. For this, you can get in touch with the VA lender or apply for a quote online. Also, remember to get quotes from multiple places to compare for the best rates.
Getting preapproved can help you figure out how much loan amount you can qualify for. This will give you a figure to shop under your budget.
Shop for Your Car
After getting preapproved, you can go and shop for a car. However, always remember not to fall for the first car you see. Many cars are on the market, so make sure you browse as many as you want to select a car best suited for your particular needs.
Disabled Veterans Can Get a Car Loan
If you’re thinking that your disability is stopping you from getting a car, think again. There are several organizations that offer military discounts that can help you get an auto loan, regardless of whether you have a service-connected disability.