Auto Loans for Single Mothers

Auto Loans for Single Mothers

Being a single parent is difficult on many levels. The amount of weight you have to pull on your own can feel overwhelming and in this day and age, it has become so common place that sometimes it seems as if it barely bares mentioning as there are a lot of single parents out there.

One of the areas where it can seem particularly difficult is in securing loans for things like homes and automobiles. Banks and financial institutions exist to make money and very often, look differently on single earning households. Particularly single mothers.

A sad fact of our society is that women still make less in the same jobs as men. Banks and loan officers know this and take it into account when they are looking at applications for loans. They also know and take into account that single mothers are mothers and still hold on to the antiquated stigma that they will miss more days of work because they have children and despite there being a father somewhere, the assumption is the mother will miss the work for the child.

With a reliable car being more of a need to a single mother, being able to purchase one is very important. It can make the difference between obtaining and keeping a job and not. In addition, a single mother has children to transport. It can be tempting to make due to older model cars, but what you would typically end up paying in repairs and upkeep very often amounts to what buying a newer model car would cost you over time.

The stereotypes about single parents and mothers in particular are disappointing but not insurmountable. The following are some tips for successfully applying for auto loans as a single mother.

  • Get a copy of your credit report. Many agencies offer a service to provide it to you like But these services are not actually free. They ask you for money up front then enroll you in a monthly service. You are entitled to a free copy of your credit report once a year. You can obtain it at: Once you have your credit report go over it thoroughly to make sure there are no mistakes or misreported credit problems. If you should find any, write to the agencies and get a correction letter which you can then submit to the different credit reporting agencies. (Equifax, Experian, Transunion.)

  • If there are bad ratings on your credit report, take the time to write an explanation of why they happened. Example: you were divorced and made responsible for debt incurred by your spouse. Or, a medical bill was too high for you to pay outright but you are making payments.

  • Contact the lenders you have debts with and make arrangements to pay them down and stick to it. Very often if you are willing to work with a lender they will eliminate service and late fees in order to recuperate their debt. This is a service that so called credit cleaning agencies do for people, but you can negotiate it yourself with time and diligence. Showing that you are working on a debt is a positive for lenders. Ask someone to co-sign. This may not be an option for everyone, but if you have a family member or friend who is willing to, having a co-signer can significantly reduce your interest rate on an auto loan.

  • Put down a large amount as a down payment on a loan. It may be difficult but the higher the down payment, the lower your monthly payments and interest rate.

  • Be reasonable in your choice of vehicle. As a single mother you need a vehicle to get around, not as a status symbol. Choose something reliable that will fit your needs with the greatest economy in price and in upkeep. Check the Kelly Blue Book and Consumer Reports to make sure your choice is priced reasonably and reliable.

An auto loan is not un-doable, it is just more work. Look for agencies that specialize in car loans and work with those is special circumstances. Some may be local, especially if you bank at a credit union. Other larger agencies understand that financial problems hit us all and are willing to work with you. Some of the better rated agencies are and

It does take quite a bit more planning as a single mother to secure an auto loan. Banks and loan officers look not at the person but the risk and they know that single mothers are statistically a higher risk. It’s your job to ensure that you present yourself as a lower risk to them. Doing your homework and having all the things they would normally ask for like credit report fixing done ahead of time will show them you understand their concerns and want to minimize the risk to yourself.