Before you apply for an auto loan as a bad credit buyer, you must meet some basic car loan requirements. While each lender is slightly different, the main requirements typically don’t change. In addition, you should be prepared to show proof of each one in order to qualify for financing.

Four Main Car Loan Requirements

These requirements don’t change. Borrowers with bad credit must have proof of each car loan requirement in order to be considered for financing:

  1. Car Loan RequirementsIncome – You’ll need to show the lender proof of income with your most recent computer-generated paycheck stub. Generally, the minimum income for a car loan is anywhere from $1,500 to $2,000 a month gross (before taxes are taken out), but this amount can vary from lender to lender.
  2. Phone – You’ll need to show proof of either a working landline phone or contract cell phone from a national carrier in your name at the address listed on your application. Prepaid plans are not accepted.
  3. Identity – Proof of identification doesn’t apply if you plan to finance through a bank or credit union you have a history with. But you’ll need sufficient ID when visiting a dealer. You'll need a form of photo ID with your signature on it (a driver's license is the most common).
  4. Residency – You will also be required to prove your residence. You can use your utility bills as well as documentation proving you’re paying on a mortgage or renting. The bills need to in your name and addressed to the same place you list on your loan application.

Other Requirements

In addition to those requirements, there are other things you need to consider when it’s time to finance:

  1. Credit scores and reports – Your credit score determines what type of auto loan and car you’re able to finance. Most lenders use the FICO score, which normally can be purchased for a small fee. The better the score, the better deals you’ll be offered. You’re also entitled to one free copy of your credit report every 12 months from the three credit bureaus. Double check for any errors, and report them to the bureau quickly if you find any.
  2. Down payment – While a down payment isn’t always needed with a car loan, it’s still highly recommended. If you’re dealing with subprime credit, a down payment will nearly always be required. Most lenders are looking for $1,000 or 10 percent of the vehicle’s selling price, whichever is less.
  3. Trade-in information – You only need this if you plan to use your current car as a down payment. You’ll need to bring the title with you in order to be able to trade in your car to the dealer.
  4. Personal References – Bad credit borrowers may also need to provide a list of personal references with names, addresses, and phone numbers.

Bottom Line

Getting a car is exciting, but also stressful. You can lower the stress of getting approved by coming in prepared with the right information. While this may seem like a walk in the park, it isn’t always that way for car buyers dealing with challenging credit situations.

If you need a car and and aren’t sure where to turn to get the financing you need, let Auto Credit Express lead the way. Our fast and free service matches consumers dealing with poor credit to local dealerships that are trained in special finance. Get started today by filling out our online auto loan request form.