Finance companies use different factors when determining an auto loan payment, including the person's credit score, the cost of the car and the interest rate, according to the Federal Trade Commission. They also take into consideration the occupation and sources of income, and the person's debt obligations and credit accounts.Continue Reading
Aside from the cost of the vehicle, the credit report is the next most important thing to consider when it comes to the auto loan monthly payment, says the Federal Trade Commission. The credit report shows the applicant's credit score and payment record; public records such as bankruptcy or court documents; and current debt or credit obligations. This is used to approve or deny the loan and determine the interest rate. If the credit rating is low, the interest rate is high, which raises the auto loan amount.
The income and length of employment are also considered when determining if an applicant is approved for a car loan, explains the Federal Trade Commission. The financing officer needs to know the applicant has enough money after monthly expenses to afford the loan payments and a dependable income. Recent pay stubs, bank statements or tax return documents are often requested to verify employment and income.Learn more about Credit & Lending