In our database we have over 100 sub prime lenders, each has an average of 5 lending programs. With over 500 programs in total there should be a program for almost every bad credit low income car loans situation. The major factors lenders consider when you apply for a car loan are:
Credit score and time in bureau. Most lending programs take into account your credit bureau score as well as the length of time you've been using credit. The higher the score, and the longer you've been using credit, the better. Lenders that incorporate the credit bureau score in their approval formula usually cut off around 525. If your score is less than 525, it is still possible to get approved for an auto loan
with a lender that does not use the credit bureau score in their formula.
Job time. Many subprime auto lenders look for at least one year on the job. If an applicant does not have a year on the job, most lenders look for at least three years of continuous employment with only 2 to 3 employers (max) during that time period.
Income. Income requirements, an especially important point if you're applying for one of the available low income car loans, are known to vary widely by the auto loan program. While most bad credit lenders prefer around $2,000 per month gross (before taxes) income, there are many programs with lower income requirements.
Debt to income ratio
. To calculate your debt ratio, take all your bills, including your new car payment, and divide this number by your total pre-tax income. Most lenders prefer a maximum DTI ratio of between 40 and 50 percent.
Payment to income ratio. To calculate the payment to income ratio divide your new car payment by your pre-tax income. Most lenders prefer a maximum PTI ratio that's between 15 and 20 percent
Down payment. Most low income car loans
lenders require some form of down payment. If you have no money down and nothing to trade in there are a handful of programs available (depending on other circumstances).
Approval killers. Also known as Automatic Rejections, these can vary by lender. Examples of some of these are listed below. It should be noted that these are not automatic rejections for all lenders; however, they are automatic rejections for some lenders:
Currently in credit counseling
A dismissed bankruptcy
Past due child support
Excessive tax liens
Once again, it should be pointed out that lenders are not the same. If you do not meet all the criteria for bad credit low income car loans mentioned above, there is still a good chance that you could qualify for a number of lending programs.