In earlier times, a good credit score used to be the major deciding factor which decided the approval/rejection for an auto loan. However, with changing times, the focus has shifted from credit score due to the introduction of subprime lending institutions and bad credit loan providers. Now the salary of the borrower is taken as the main requirement for getting easily approved for the auto loan. Some think that salary is included in the credit score. However, the credit rating states the probability of the borrower paying back his/her auto loan.

The requirements for the salary can change from lender to lender. It is seen that the banks carry the stringiest of the salary requirements. This is done to ensure that the borrower doesn’t break his/her back while paying back the monthly installments. The minimum limit for the salary can vary but it usually lies between 1500 to 2200 dollars a month.

As most of the auto loan installments lie in the $200 – $500 dollar range, the aforementioned salary limit ensures that the EMI doesn’t exceed 25 percent of the salary. If the borrower has any other income sources such as grants, alimony etc. then these should be mentioned in the total salary column. This would help the lender in approving the loan at a lower interest rate.

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