What lenders look for to approve you for a car loan

• Documented Monthly income of $1600 or more
• Living in the same address for at least 6 months
• Employed by the same company for 6 months
• Preferably a year of established credit with no black marks
• Credit score of 680 or higher to get lowest prevailing interest rates
• If your credit score is 600 to 680 you'll pay higher rates like 10%-15% APR
• If your credit score is below 600, it's very difficult to get approval, and below 550 it is nearly impossible

Let's look at how paying a high interest rate does an enormous amount of damage to your wallet over time. A person like me with a great credit score might get a car loan at 4%. But if you have a bad credit history, or no credit history at all, you can pay up to 6 times the amount of interest over the life of your loan that I might pay. This is why people who are broke will stay broke all their lives and never break the downward spiral, because they spend virtually all their income on interest charges and late fees. Sometimes the financing interest rate (APR) of a car loan can be so high that the payments will actually keep you from getting a car you wanted, all due to the higher APR. Look at this table below to see how bad the damage gets on a $15,000 car loan for 48 months:

Interest Rate (% APR)	Monthly Payment	Total Interest Paid on loan in 48 months
4% (Good Credit)	$339	$1257
10%	$380	$3261
15%	$418	$5038
21% (Bad Credit)	$464	$7296

Looking at the table above, you can see how urgent it is for you to establish healthy credit, and maintain your healthy credit score, or you will spend your whole life wasting your meager earnings on interest, when it should be building your nest egg. This is why most people, even those ready to retire are broke. A lifetime of careless spending habits, paying only the minimum monthly payment, and paying full price for everything has left them with no nest egg.