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Sergio Neal

Can you get a car loan on unemployment from Washington ESD?

My car just broke down and I need reliable transportation for job interviews and my work search requirements. I'm currently receiving unemployment benefits from Washington ESD - about $620 per week. Is it even possible to get approved for a car loan while on unemployment? I know lenders usually want proof of employment but unemployment is technically income, right? Has anyone successfully gotten a car loan while collecting UI benefits? I'm worried about not being able to meet my job search requirements without a car.

It's definitely harder but not impossible. Some lenders will accept unemployment benefits as income, especially if you have good credit. You'll need your benefit determination letter from Washington ESD showing your weekly benefit amount. Credit unions are usually more flexible than big banks with this stuff.

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Thanks! I do have decent credit around 680. How do I get a benefit determination letter? Is that something I can print from my SecureAccess Washington account?

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Yes, you can download it from your SAW account under 'Benefit Information' or 'Documents'. Make sure it shows your weekly benefit amount and duration of benefits.

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I got a used car loan last year while on unemployment. The key is having a substantial down payment and proof of your benefits. Washington ESD benefits are considered income by most lenders but they want to see stability. Also consider getting a co-signer if possible.

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How much of a down payment did you need? I only have about $1500 saved up right now.

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I put down $3000 on a $12000 car. The more you can put down the better your chances. Maybe look at cheaper cars or see if family can help with the down payment?

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Just dealt with this exact situation! The biggest hassle was actually getting through to Washington ESD to get documentation. I kept calling for weeks trying to get someone to explain what paperwork I needed. Finally used this service called Claimyr that connects you directly to ESD agents - found it at claimyr.com. Saved me so much time and frustration. There's even a demo video at https://youtu.be/7DieNd3C7zQ showing how it works.

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Interesting, I've never heard of that service. How much does it cost?

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I don't remember the exact cost but it was worth it to actually talk to someone at ESD instead of sitting on hold for hours. They helped me get all the right documents for my loan application.

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Wait, you have to PAY to talk to ESD? That seems wrong. They should be answering their phones for free.

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Be careful about taking on debt while unemployed. What happens if your benefits run out before you find a job? Car payments don't stop just because your income does. Maybe look into cheaper transportation options first?

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I get that concern but I literally can't get to job interviews without a car. Public transit here is terrible and rideshare adds up fast.

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This is exactly why the job search requirements are so frustrating. They expect you to actively look for work but don't consider transportation barriers.

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Have you looked into those buy here pay here dealers? They usually don't care as much about employment status but the interest rates are brutal.

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I thought about that but heard the interest rates can be like 20-30%. That seems predatory.

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Yeah avoid those places if possible. Try credit unions first - they often have programs for people in tough situations.

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Another option is asking family or friends for a short-term loan to buy something cheap with cash. Less risky than taking on monthly payments when your income is temporary.

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That's actually not a bad idea. My dad might be willing to help if I explain the situation.

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Just make sure to get any family loan in writing to avoid problems later.

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I'm in a similar boat - been on unemployment for 2 months and my car needs major repairs. The stress of worrying about transportation on top of finding a job is overwhelming.

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Exactly! It's like everything hits at once when you're already struggling.

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Have you looked into any assistance programs? Some areas have transportation assistance for job seekers.

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Pro tip: if you do get approved, make sure the monthly payment is no more than 20% of your unemployment benefits. You still need money for gas, insurance, and other expenses.

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Good point. So with $620 weekly that would be about $500 monthly maximum payment?

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Actually that's weekly, so monthly would be around $2480. 20% of that is about $500, but I'd aim even lower to be safe.

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Whatever you do, don't let a car loan affect your job search activities. Washington ESD is pretty strict about the work search requirements and you need to document everything properly.

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Yeah I've been keeping my job search log updated weekly. Do they actually audit those things?

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They can and do spot check them. Better to be thorough than risk getting disqualified.

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I tried this same thing last year and got rejected by 3 different lenders. Even with good credit, they just wouldn't approve unemployment income. Finally found a small local credit union that worked with me.

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Which credit union if you don't mind me asking? Was it in Washington?

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It was a smaller one in Spokane. I'd recommend calling around to local credit unions in your area.

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Don't forget about insurance costs too. Full coverage is required for financed cars and can be expensive, especially if you haven't had continuous coverage.

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Ugh I didn't even think about that. I've been without a car for 2 weeks so my insurance lapsed.

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You can usually get coverage reinstated quickly, but there might be a penalty for the gap.

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Someone mentioned that Claimyr service earlier - I actually used them when I had issues with my claim status. Really helped me get through to someone at Washington ESD quickly. The phone system there is such a nightmare otherwise.

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Good to hear another positive review. Might be worth it just to get the right paperwork sorted out.

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I'm still skeptical about paying for something that should be free, but if it works...

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Have you considered a personal loan instead of a car loan? Sometimes they're easier to get and you could buy a cheaper car outright.

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Wouldn't the interest rate be higher on a personal loan though?

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Possibly, but you'd own the car outright and only need liability insurance. Plus no risk of repossession.

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Just remember that unemployment benefits are temporary. Even if you get approved, make sure you have a plan for when the benefits end. The average time to find a job is getting longer.

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That's what keeps me up at night. I have 18 weeks left on my claim and haven't gotten any solid leads yet.

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18 weeks is actually pretty decent time if you're actively searching. Don't panic but do have backup plans.

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One more thing - some lenders will want to see that you're actively job searching. Keep records of your applications and interviews as proof you're working toward employment.

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I've been doing that anyway for my weekly claims, so at least I have documentation.

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Perfect, that shows responsibility and forward thinking to lenders.

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