Credit challenged car buyers with a full time job as well as another part time job should know how lenders might treat the additional income
Extra Income & Auto Loans
Consumers with bad credit who are employed full-time that also have a regular part-time job on the side should be aware of how subprime lenders typically treat that additional income.
That's because the way it is treated could have a big effect on whether or not their application for a car loan is approved. But in order to understand it, we first have to take a look at the income requirements of subprime lenders.
The minimum monthly income requirements vary by lender, but it typically ranges anywhere from $1,500 to $1,800 in gross (before taxes) wages. The higher the income, the better an applicant's chances are for an approval.
More income usually means a number of additional benefits including:
- A larger selection of available vehicles
- A greater choice of lenders
- A potentially wider payment range as a result of a better payment to income ratio
- The ability to cancel out more debt for a better debt-to-income ratio
This means that, in most cases, if applicants can add the income from a second part-time job to their regular income, provided their regular income exceeds the required minimum, they'll have a better chance of being approved for a car loan.
So the question is, what lender requirements must be met in order to add the income from a part-time job to an applicant's regular income?
Income from a Part-time Job
In order for part-time income to be considered, it must be consistent and the applicant must be able to prove it. In order to be consistent, applicants typically must show that they have been receiving this income for at least a year. In order to be able to prove the income, applicants must be able to produce pay stubs, 1099 forms or bank statements showing deposits on a regular basis.
In addition, more weight will be given additional income from the same field of work – for instance, someone in a skilled trade that also regularly does this work on the side or a person who works for a software company that also does programming on the side.
Applicants should also keep in mind that not all subprime lenders necessarily consider any kind of part-time job as additional income.
The Bottom Line
Some - but not all - subprime lenders will allow income from a part-time job to be added to an applicant's regular income.
In order to do this, the income must be received on a regular basis and the applicant must be able to prove it with documentation such as paystubs or bank statements.
One more thing: Auto Credit Express matches consumers with problem credit to dealers that can offer them their best opportunities for auto loan approvals.
So if you're ready to establish your credit, you can begin now by filling out our online car loan application.