If you've recently started a new job, it's natural to consider improving your vehicle situation. You may not have a car and need transportation to get to work, or maybe your new income affords you more flexibility to buy a more reliable upgrade. But applying for an auto loan becomes a bit trickier when you have less than perfect credit.
Auto Financing When You Have a New Job and Bad Credit
If you have poor credit, you may not be able to get approved for an auto loan with a traditional lender. Instead, you may have to seek out alternative financing. Subprime lenders are capable of working with bad credit circumstances; they simply look at other qualifying factors when making approval decisions.
In the end, all subprime lenders want is for you to pay back the money you borrow. As such, they place extra emphasis on an applicant's income and employment situation. There is no nationwide standard, but a subprime lender will generally use requirements along these lines:
- A monthly income of at least $1,500, pre-tax
- Full-time employment, or a guaranteed fixed income
- 3-4 continuous months of time on the new job
- Temporary or seasonal employees do not qualify if they have been at their job for less than six months
Again, these are not hard-and-fast rules. They are simply the general qualifications that most subprime lenders start with.
Every Situation Is Different
If you have recently started a new job, have damaged credit, and are seeking auto financing, the important thing to remember is this: Everybody's situation is different. Subprime lenders know and understand this.
If you don't perfectly meet the set of requirements above, there are many extenuating circumstances that they will take into consideration. Here are just a few scenarios that can factor into a lender's decision:
- You Held Your Previous Job for an Extended Period of Time
Your past job can be just as important as your new job. If you can show that you had two years of continuous employment or more at your previous employer, most lenders will feel more comfortable about your job change. You may also be viewed more favorably if you had a quick transition between jobs and weren't unemployed for an extended period of time. If you can't show previous long-term employment, having the same permanent residence for a long period could help your cause, especially if you own and don't rent.
- You Switched Jobs but Remained in the Same Field
If you switched jobs because a better opportunity in the same field presented itself, that's going to matter to lenders. They understand that people will take advantage of new opportunities for a change of scenery or better pay. If this is the case for you, it is possible that it won't matter if you've been at your new job for less than three or four months.
- Do You Have Situational Bad Credit?
If your credit situation can be attributed to one unexpected life event, you have situational bad credit. If you suddenly lost your job but have an otherwise strong credit and employment history, you will be viewed much more favorably than an individual with a spotty job and payment history.
There are many other scenarios a subprime lender might consider. It may be true that the longer an applicant has been on the job, the better the individual will be viewed, but as long as you can explain your situation and prove your income and employment with bank statements, pay stubs and/or tax forms, you might still be able to get approved.
We Can Help
When you have bad credit and need an auto loan, employment stability does become an important factor. But there are many circumstances where an individual can get approved, even if they have recently started a new job.
Fulfill your vehicle needs with the help of Auto Credit Express and our nationwide network of special finance car dealers. All you need to do to start the process is fill out our free and secure online application.
And if your job switch has resulted in a few extra expenses that are adding up, you could apply for a personal loan to get an advance on your paycheck to take care of them.