How to Get a Car Loan If You Are Retired

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Even if you are retired, you can still qualify for a car loan. Employment is not the key factor in whether or not you can get a loan. Instead, lenders look at all kinds of factors to ensure you will be able to make your monthly payments. They will look at income from pension, Social Security and investments, your credit score and any outstanding debts you have.

Step 1

Put together a list of your sources of income, including pension, retirement accounts -- 401(k)s and IRAs -- and other investments, as well as Social Security. When you request a loan, you will need to show that you can comfortably make the monthly payments.

Step 2

Put together a list of any outstanding debts you have. Lenders will want to see proof that you've been paying these loans back on time. Additionally, lenders will want to make sure you have a high income-to-debt ratio.

Step 3

Request a copy of your most recent credit scores from a website such as, which gives you free scores from all three main bureaus once per year. Lenders will expect to see a copy of your credit scores. If you have a high score, this can work to your advantage because it serves as proof that you have a history of paying your loans back on time.

Step 4

Apply for a car loan. If you have a long-standing relationship with a bank, apply with them -- they will have easy access to your credit history and are more likely to give you a good rate. When you apply, bring proof of income, a copy of your license, information on the car you want to buy and any information on your debts.

Step 5

Negotiate the length of the car loan, most of which are five years. Depending on your age, lenders might want you to take out a loan for a shorter term. Though you will have to pay higher monthly payments, there are some advantages -- you will likely pay a lower interest rate. This is true especially if you can put a large chunk of capital down upfront.


About the Author

Amanda Erickson has been writing professionally since 2008. She has written for the "New York Times," "Christian Science Monitor" and "Chronicle of Higher Education." Before moving to New York, she worked as a political blogger at the "Washington Post." Erickson holds a Bachelor of Arts in urban history from Columbia University.

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