If you have bad credit, getting approved for an auto loan involves a different process. The lenders that work with applicants with poor credit evaluate many factors, including your credit, income, and employment situation when determining whether or not you qualify. Believe it or not, your employment status is going to play a role.
Subprime lenders look for stability wherever they can find it, including your job. We know this because, at Auto Credit Express, we have been helping people with credit issues find auto financing for the past twenty years. Our experience has given us a tremendous insight into the requirements of subprime lenders.
Take, for example, this question we recently received from a potential applicant.
"I'm starting a new better paying job in about a month and would like to know how long I'd need to be employed before I'd qualify for financing."
Let's dive into the employment requirements for a bad credit auto loan.
There are no hard and fast rules because different lenders have different requirements. But, typically, a subprime lender is looking for three to four months of continuous employment at your current job. Also, they are looking for a three-year employment history with no long gaps (~60 days) in between.
As a rule of thumb, the longer your time on the job, the more stable your employment situation is viewed. This employment requirement allows lenders to verify your actual income level. It's especially helpful when they need to evaluate hourly employees, as they can see things like how consistent any overtime hours are over a period of time.
Again, subprime lenders will evaluate many different factors. Lenders evaluate each person who applies individually. So, don't get discouraged from applying if you don't perfectly meet the rules. Special finance lenders understand the complexities of employment, and they will consider unique situations.
Other Employment Factors in Play
Subprime lenders know that people sometimes find better employment opportunities. In most cases, if you change jobs for more money or a better opportunity in the same field, lenders will understand. Under these circumstances, it may be possible to get approved even if you haven't been at your current job for that long.
If you switched job fields altogether, lenders are willing to consider why. Generally, if you avoid any long gaps between your past and current employer, they should not take issue with it.
If you are unable to show a long and strong history of previous employment, it could be an issue. However, special finance lenders may look to your residence history to find stability. If you have lived in the same area or at the same residence for an extended period of time, it could help your cause. This is especially true if you own your home and do not rent.
If length of employment is going to be an issue, there are a few things you can do. In order to tip the scales in your favor, you can get a cosigner or have an extra large down payment. You can help your approval chances using these methods if you don't perfectly meet the job time requirement.
Additionally, the employment requirements discussed are geared toward full-time employees. There are different rules for those that are self-employed, seasonal workers, or part-time employees (especially if they have multiple part time jobs). Check out our blog for more information on these topics.
Finding Auto Financing
Often the most difficult part of getting a bad credit car loan is finding the dealer than can help. At Auto Credit Express, we have made that process as simple as can be. If you apply with us, we can match you to a dealer in your area that specializes in subprime auto financing.
Our service is free, our process is fast and applying puts you under no obligation. So, you've got nothing to lose. You can start today by completing our simple and secure online application.