There are qualifications you have to meet for income and employment when applying for a bad credit car loan in Seattle. In fact, the income and employment requirements are typically the same across the U.S., only the details differ from lender to lender.
Getting a Car Loan in Seattle
When you live in Seattle and need to get a bad credit auto loan, you have to meet a number of qualifications, including the income and employment requirements. This is important because lenders need to know that you have enough consistent income to be able to successfully complete your car loan.
The specific requirements you need to meet vary from lender to lender. Generally, when it comes to income and employment requirements for a bad credit auto loan, you must:
- Make at least $1,500 to $2,000 a month before taxes from a single job
- Furnish your most recent computer-generated pay stub showing year-to-date income
- Have been employed at the same job for at least six months to a year
- Have a minimum work history of at least the last three years
- Have no gaps over 30 days between jobs during the last three years
Lenders check that you meet these qualifications before they go through a process of calculating how your income compares to your monthly expenses. This process is easy to do yourself, and can help you see how much income you have available for a car loan in the Emerald City.
Budgeting for an Auto Loan
Calculating your budget is an important step before you start searching for an auto loan. Without knowing whether or not you can truly afford a loan, you run the risk of further credit damage by going from dealer to dealer only to be turned down.
To save yourself the hassle, you should calculate your debt to income (DTI) and payment to income (PTI) ratios. These two calculations are done by lenders when they “debt you out” to ensure you can afford a car loan.
Your DTI ratio compares your monthly bills – including an estimated auto loan and insurance payment – to your pre-tax monthly income, to see how much of your income is being used. To calculate yours, simply divide the total of your monthly bills by your monthly pre-tax income. Bad credit lenders don’t typically approve applicants for financing if their DTI ratio is more than 45% to 50%.
To calculate your PTI ratio, which compares a car loan payment to your monthly income, divide your estimated monthly loan payment by your pre-tax monthly income. The resulting number, when converted to a percentage, is your PTI ratio. Lenders don’t generally approve borrowers for a loan if their PTI ratio is over 15% to 20%, but the lower you aim, the better.
Even though these calculations are easy to do yourself, you can also use online tools, such as our payment calculator, to help you determine a budget. Either way, make sure you know what your budget is right from the start – you can save yourself a lot of headaches if you do.
Finding the Right Dealership in Seattle
Auto financing with bad credit requires you to meet more qualifications for income and employment than if you were financing a vehicle with good credit. This can make it more time consuming and difficult to get a bad credit car loan. For the most part, however, as long as you’re working with the right lender, it can be smooth sailing.
To make sure you have as little trouble as possible getting an auto loan with bad credit, let us help. At Auto Credit Express, we work with a large network of special finance dealerships all across Seattle, Washington State, and the rest of the nation. These dealers work with the right kind of lenders to help people in unique credit situations, such as bad credit, no credit, or bankruptcy.
Simply fill out our easy, no-obligation car loan request form, and we’ll get to work matching you with a local dealership. Don’t hesitate any longer to get the vehicle you need!