The internet is a busy and thriving place. And with so many active websites up and running, working as a freelancer has become a good career option for a lot of people. For those who like working from home, crave independence or want flexible hours, working as a freelance writer can be rewarding.
However, when it comes time to make a large purchase that requires financing, freelancers may find that getting approved for a loan is a little harder for the self-employed. This is especially true if you have a fluctuating income, no steady employer and bad credit.
Bad Credit Car Loan Income Requirements for Freelancers
If you're a freelancer, anything that applies to other self-employed individuals also applies to you. So, just like anyone with bad credit who works for themselves, you will need to show a lender that you earn a regular, qualifying income.
Most car buyers with credit issues find that it's easier to get financed through a special finance lender. These types of lenders are able to look at factors beyond your credit in order to approve you. They will want to know that you maintain a stable residence, have a regular job and earn a qualifying income.
Different lenders have different requirements, but most will need proof that you make at least $1,500-$1,800 (pre-tax) per month. Ideally, this income should be garnishable and dependable. So if you work for a single employer, you could simply produce your most recent paycheck stubs. But as a self-employed freelancer, additional documents will be needed in order to verify your income.
These may include:
- Tax returns (1040 forms) from the past two years
- A recent bank statement
- Court letters that show any proof of supplemental income (disability, alimony, etc.)
Established freelancers have also reported that it's useful to obtain letters of recommendation from long-time clients. These letters should show that you have relationships with employers who intend to continue using your services.
A growing number of freelancers are registering with websites like Upwork. Here, you can find jobs and collect payments all in one place. Upwork also allows for easy access to past invoices that can be printed and shown to potential lenders.
Additional Bad Credit Car Loan Requirements for the Self-Employed
In addition to a qualifying income, there are other requirements to consider. These include a valid driver's license, a cell phone contract and proof of a stable residence. Why does it matter where you live and how long you've been there? It all comes down to risk vs. stability. Lenders will always look for evidence of stability in your life that makes you less of a loan risk. So, having a permanent address that you've maintained for at least a year can give you a better chance at an approval.
In order to verify your residence, you will need to provide a recent utility bill that is addressed to you. If, on the other hand, you're the type of person who moves around a lot, you should be ready to offer a good explanation for your nomadic behavior. If you've frequently relocated for work-related reasons, a lender will probably understand.
Another way to handle frequent moves is to invest in a business address. For a low monthly fee, you can have a real street address and a place to receive your mail. Just type "business address" into your search engine and you will be presented with a number of options that are available for a variety of rates.
Auto Loan Assistance for Freelancers with Bad Credit
If you need a little help getting connected with a special finance lender, Auto Credit Express is ready to go to work for you. We can match you with a dealership in your area that works with the right kinds of lenders, and it won't cost you anything.
Our service also comes with no obligations, so you have nothing to lose except another day without a car. Just fill out our simple and secure online loan request to get started today.