Thread Rating:
  • 3 Vote(s) - 5 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Can a Personal Loan be used as a Down Payment?
#1
According to this article https://www.autocreditexpress.com/blog/c...n-payment/ you can’t use a personal loan as a down payment. How would the auto lender even know that your down payment came from a personal loan?
Reply
#2
Wow I'd never heard that before. It's a really good question, how would they know where the money is coming from?
Maybe there's a section in the contract where you're obligated to disclose that information, I've never taken out a car loan so I'm not sure.
Reply
#3
I think one of the requirements to have your loan approved is a proof of income so if you have a job, you need to pass a payslip and there it will be evident that you have a loan. Also, these lenders often do a background check, even investigate you, ask specific authorities about your finances, maybe government agencies to be sure of your stable financial standing.

But I think the lenders are right with that policy. First of all, you loaned the downpayment and you have to pay that also which may be in conflict of paying for the car or anything that you paid the DP for.
Reply
#4
I would think the loaner would have an application state their income information, money used for living expenses (rent, mortgage, and other needs for life), and other statements. This could indicate if the applicant could afford the down payment or they might have to use a loan. If that is the case, the loaner could assume they had to get a personal loan to afford the payment for the service. That is what I would assume to figure out a personal loan. How can a person afford if the income goes for everything else? The income information would include information on savings.
Reply
#5
(12-26-2017, 11:13 PM)Michael Puttman Wrote: According to this article https://www.autocreditexpress.com/blog/c...n-payment/ you can’t use a personal loan as a down payment. How would the auto lender even know that your down payment came from a personal loan?

Yeah, how would the auto lender know that?  Big Grin I can take out a loan a few months before applying for an auto loan and though that may appear in my credit history, how can anyone assume that it was meant to be used as downpayment for a car? Would the auto lender decline my application if my credit scores and sources of income clearly show that I am well capable of paying off the auto loan? I don't think so. The blog post was obviously made to sell the services of an auto loan assistance company which is trying to position itself as an authority. It can work against them, though. The article can raise more questions and put their credibility as service provider at risk.
Reply
#6
there is an interview and you will need to submit all your financial aspect , I think there, they will know where your money came from. and also it is not really wise to use a loan for a down payment for an auto , the best time to buy auto is if you really have a money .
Reply
#7
(12-31-2017, 08:57 PM)Robbie626 Wrote: I would think the loaner would have an application state their income information, money used for living expenses (rent, mortgage, and other needs for life), and other statements. This could indicate if the applicant could afford the down payment or they might have to use a loan. If that is the case, the loaner could assume they had to get a personal loan to afford the payment for the service. That is what I would assume to figure out a personal loan. How can a person afford if the income goes for everything else? The income information would include information on savings.

I don't think it works that way for a car loan. They just want to know your income and credit score. They don't look at specific loans you have
Reply
#8
(01-01-2018, 06:32 PM)Michael Puttman Wrote:
(12-31-2017, 08:57 PM)Robbie626 Wrote: I would think the loaner would have an application state their income information, money used for living expenses (rent, mortgage, and other needs for life), and other statements. This could indicate if the applicant could afford the down payment or they might have to use a loan. If that is the case, the loaner could assume they had to get a personal loan to afford the payment for the service. That is what I would assume to figure out a personal loan. How can a person afford if the income goes for everything else? The income information would include information on savings.

I don't think it works that way for a car loan. They just want to know your income and credit score. They don't look at specific loans you have

Agreed. Unless the loan clearly reflects in your credit score they would really have no way to know without asking. Presumably the loan would be recent enough that it wouldn't show in your score yet.
Reply
#9
I haven't heard or seen anything like this before and it seems off for me, like how they would possibly know if where it is coming from. And I also think the perfect time for you go auto or buy it is when your earning and using your own money.
Reply
#10
What???. This is the first time i heard about this thing and how come a lender knows about the money that i got is from a personal loan for me to turn down my application. I don't really get the point of making this as a rule. I've been on a car loan application and this thing doesn't exist. I made a down payment and no questions about where the money was came from. As long as you have the money and your able to comply all the requirements needed therefore application is made easy. With regards to the article, i don't know if there are other companies and institutions who implements that kind of rules or just their rules. As you can see, its their own website.
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)