If you have two jobs and bad credit, you may still be able to get a car loan if you can meet a lender's income and employment requirements. However, the minimum income requirement often has to be met using a single job. If you can't meet the requirements with the income from one job, you may not be able to qualify for an auto loan on your own.
Subprime Auto Loan Income Requirements
Each lender has their own specific income and employment requirements potential borrowers need to meet. Generally speaking, however, you can expect a lender to require that you make a minimum of around $1,500 to $2,000 a month before taxes from one job.
In order to prove that you make enough each month, you need to bring in a recent computer-generated pay stub showing year-to-date earnings if you’re a regular W-2 employee, or recent tax returns if you’re self-employed or an independent contractor.
However, just because a lender only looks at one of your income sources to meet the minimum income requirement doesn’t mean they ignore other ones. The lender is also going to debt you out, which means they’re going to calculate your debt to income (DTI) and payment to income (PTI) ratios. They may consider multiple income sources when doing so, which is where income from a second job can come in handy.
To calculate your DTI, what the lender does (and you can do this, too) is add up all of your monthly bills – including an estimated vehicle and insurance payment – and divide the sum by your pre-tax monthly income. Most bad credit lenders won't accept a DTI ratio that's over 45 to 50 percent, but this can vary.
As for your PTI ratio, they add up your estimated car and insurance payments and divide the sum by your pre-tax monthly income. The max PTI ratio subprime lenders allow is typically around 15 to 20 percent.
How to Qualify for a Car Loan with Low Income
If you don't meet the lender's minimum income requirement with one of your two jobs, how can you improve your odds of getting approved? The best way to do this is by adding a co-borrower to the loan.
A co-borrower is generally a spouse who signs the loan alongside of you and shares ownership of the vehicle. The biggest benefit to adding a co-borrower who is a spouse is that you can combine incomes. So, if you can’t qualify on your own, adding them to the loan may allow you to meet the necessary requirements. If your loan is approved with a co-borrower, it’s even possible you could get a better interest rate if their credit is better than yours.
Make sure you sit down with your co-borrower beforehand and discuss their role and why you need their help. It’s important that you work together, because both of your credit scores are affected by the loan – for better or for worse.
Ready to Find Auto Financing?
If you need help finding financing because of your credit, Auto Credit Express can connect you with a dealer near you that works with subprime lenders. Our service has been matching consumers to local dealerships for over 20 years. Fill out our quick and free auto loan request form to get the process started today.