Can I Get a Car Loan with an ITIN Number?

Introduction

Getting a car loan with an ITIN number can be challenging, but it is possible under certain circumstances. An ITIN (Individual Taxpayer Identification Number) is a tax processing number issued by the IRS for those who do not have a social security number. Since ITIN holders are not eligible for social security, they face more hurdles when applying for credit, including auto loans. However, some lenders may still approve applications from ITIN customers who meet other requirements. Here is what you need to know about can I get a car loan with an itin number:

What is an ITIN Number?

An ITIN or Individual Taxpayer Identification Number is a 9-digit number issued by the Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but do not have a social security number. Some examples of ITIN holders include:

• Non-resident aliens filing a tax return
• Spouses or dependents of foreign nationals on dependent visas
• Foreign students
• Foreign investors
• Immigrants seeking U.S. residency

The ITIN resembles a social security number in format, but it does not authorize U.S. employment and does not qualify someone for social security benefits. The ITIN is used for tax filing purposes only.

Challenges of Getting a Car Loan with ITIN

The biggest challenge to can I get a car loan with an itin number is that most lenders require a social security number to approve auto financing. Without an SSN, the lender cannot easily pull credit reports or credit scores to assess the risk of lending money. Key difficulties include:

No FICO credit score: 

The main credit bureaus (Equifax, Experian, TransUnion) require a social security number to generate a FICO score, which is the standard metric used in underwriting loans. ITIN holders likely won’t have a FICO.

Limited credit history: 

Lenders prefer 3+ years of U.S. credit history. Most ITIN holders haven’t established enough history.

High risk: 

Lenders view ITIN applicants as riskier than social security number applicants, given the lack of SSN, credit, and U.S. credit history.

Co-signer difficulties: 

Few lenders allow ITIN applicants to use an SSN co-signer due to compliance complexities.

Due to these hurdles, many mainstream lenders will automatically deny a car loan application with an ITIN number. However, it’s possible if you find the right lender.

Qualifying for a Car Loan with ITIN

While challenging, you may still qualify for can i get a car loan with an itin number if you meet requirements that help mitigate the absence of an SSN and a robust credit profile. Key qualifying factors include:

Significant down payment: A larger down payment (25-50% or more) signals you are financially invested in the vehicle purchase.

Higher interest rates: Lenders may offer higher interest rates to offset perceived risk. Rates may be 3-5% higher than standard.

Shorter loan terms: Lenders may only approve 24-36 month loans instead of 60-72 months to limit long-term risk.

Low loan-to-value ratios: The loan amount in relation to the car value may be restricted to ensure the lender can recoup costs if repossessed.

Alternative credit history: Utility payments, rent history, bank statements, and insurance payments can demonstrate creditworthiness.

Co-signer: In rare cases, a co-signer with strong credit may boost the chances of approval.

Types of Lenders for ITIN Car Loans

Very few mainstream lenders will finance auto loans for ITIN applicants. Only about 1% of car loans go to ITIN holders. Instead, you need to find specialized lenders with experience serving ITIN customers. These include:

Hispanic Banks and Credit Unions: Financial institutions that cater to Hispanic Americans and immigrants may offer ITIN auto financing. For example, El Ahorro Bank, and Latino Community Credit Union.

Subprime lenders: Specialized subprime lenders provide financing options for customers with limited credit histories. They accept higher-risk applications but charge much higher interest rates.

Buy here pay here (BHPH) dealers: BHPH lots that finance vehicles in-house take on their own risk. They will review an ITIN applicant’s unique creditworthiness factors beyond a FICO score. Down payments are usually 30% or higher.

Online lenders and marketplaces: Websites like Car.Loan.com, Auto Credit Express, and MyAutoLoan.com work with networks of ITIN-friendly lenders and dealerships. This opens up more potential sources of financing.

Documentation Needed for ITIN Car Loan

When applying for auto financing as an ITIN number holder, you need to supply documentation above and beyond the usual required paperwork. Can i get a car loan with an itin number, be prepared to provide:

• ITIN number: Copy of your ITIN assignment letter from the IRS. This proves your taxpayer identification number.
• Passport: Valid passport confirming your identity and immigration status.
• Proof of income: Pay stubs, W-2, tax returns, and other verification of your earnings. This helps demonstrate ability to repay the loan.
• Utility bills: Home utility bills help establish residency and credit history.
• Down payment funds: Bank statements or other paperwork showing you have the cash for a down payment.
• Co-signer: If applicable, your co-signer will need to provide SSN, proof of income, and authorization to have their credit pulled.

Thorough documentation ensures the lender you are representing your situation accurately. Being an ITIN holder is not necessarily a deal breaker if you provide everything needed to analyze the application.

Tips for Getting Approved

Can i get a car loan with an itin number, keep these tips in mind:

• Shop around among lenders familiar with ITIN applicants to compare options and interest rates. Don’t assume you’ll be turned down everywhere.
• Aim for at least a 30% down payment to increase approval chances and get better terms. The higher the down payment, the better.
• Bring someone with a social security number to co-sign if possible. Their income and credit can help strengthen the application.
• Look for newer used vehicles since loan amounts will be lower. New cars likely won’t be approved without stellar credentials.
• Consider a shorter loan term so the balance gets paid quicker and with less interest expense.
• Prepare all required paperwork confirming income, residence, and down payment funds. Make it easy for lenders to document the file.
• Accept higher than average interest rates which will be necessary to offset the higher perceived risk.
• Enroll in credit builder products like loans and secured cards to start compiling a history in the U.S.

With prudent planning and preparation, you can overcome the difficulties of can i get a car loan with an itin number. Seek out lenders specializing in credit-challenged borrowers and highlight other strengths in your application.

Conclusion: Should I Get a Car Loan With My ITIN?

Getting a car loan with an ITIN number is more difficult and expensive than auto financing with a social security number. While possible in some cases, you need to consider:

• Will the higher interest rates be affordable?
• Can you accept more stringent loan terms?
• Do you have the large down payment amount needed?
• Will public transportation suffice for now?
• Should you buy an inexpensive used car with cash?

For many ITIN holders, a financed car purchase may not be prudent given the challenges involved. Building up your credit first may be a smarter long-term move. However, if you urgently need reliable transportation and can meet the stricter requirements, can i get a car loan with an itin number may be an option in rare cases. Through the above article, Bidatawiki hopes you will proceed cautiously and manage well as you expect.