Employment requirements are just one of the qualifications you must meet when you're getting an auto loan from a subprime lender. Subprime lenders work with bad credit car buyers, so you can still get the vehicle you need even if you're struggling with credit.
Basic Bad Credit Car Loan Employment Requirements
Bad credit auto loans come with different requirements than more traditional car loans. One of those is that you have to have enough taxable income to be able to afford the auto loan.
Subprime lenders – the lenders that work with bad credit car buyers – usually require this income to be from one job. The basic employment requirements to qualify for a bad credit auto loan are:
- It must be taxable income.
- You have to have been at your current employer for at least six months.
- You need to be able to show a minimum of three years of work history with no major gaps in between jobs.
The reason lenders ask that you have this kind of work history and a taxable wage is because they're looking for stability. Having a stable job lets the lender feel more secure about approving you for a loan.
Other Employment Requirements
In order to meet the income requirement for most subprime lenders, you typically have to prove a minimum income of $1,500 to $2,000 a month before taxes from a single job. This can be W-2 employment income, or your net self-employment or contract employment (1099) income.
However, just because lenders require your income to come from a single source in order to qualify doesn't mean that a second job can't help you when getting a bad credit car loan. Having a second job helps with your debt to income ratio and payment to income ratio, which lenders always calculate to see if an auto loan fits your budget. The income from a second job can usually be factored in to your initial qualifying income here.
When a lender "debts you out" for a car loan, they're calculating these two ratios. Bad credit lenders typically cap your payment to income ratio at 45 to 50%, and your payment to income ratio at 15 to 20%.
Getting a Car Loan without Garnishable Income
Since subprime lenders require taxable income from one source of employment, it can be difficult to get a loan if you have other forms of income such as disability or social security.
Getting a car loan with these types of income is often easier at a buy here pay here dealership, because these dealers don’t care where your income comes from. These places usually are only concerned with whether you have enough income to make a payment.
If you're having trouble getting approved with a subprime lender because of the type of income you earn, you might need to try one of these dealerships.
Finding a Local Dealership to Help
When you need a subprime lender for an auto loan due to bad credit, it can be difficult knowing where to start your search. The special finance dealers that have these lenders available often don't advertise that they do, which can leave you driving all over town looking for a lender.
Rather than wasting your time and energy searching for a starting point, why not begin with us instead? Auto Credit Express has been helping bad credit car buyers find financing solutions for over 20 years.
We can help you find an auto loan by matching you with a local special finance dealership that has the lending resources you need. To get started right now, fill out our easy car loan request form.