The length of time needed to be considered for a car loan depends on the lender you’re working with. However, there are a few general guidelines that most subprime lenders stick to when it comes to auto loan approval.
Employment Requirements Can Vary
When you need a car loan, your credit situation is a strong indicator of the type of lender you should work with.
With a credit score falling in the “good credit” range (typically considered a FICO credit score of 670 or higher), you’re likely to qualify for auto loan approval through a traditional lender. Chances are high that there won’t even be a question about your employment or income unless you don’t have much credit experience.
People with poorer credit, however, typically need to work with special finance lenders, and these lenders aren’t always easy to find. Plus, working with this type of lender requires you to meet a number of qualifications in order to be considered for financing.
One of the requirements for bad credit car loan approval is length of employment. When lenders consider you for an auto loan, they look for your ability, stability, and willingness to successfully complete a loan. The length of time you’ve been employed helps a lender judge if you have a stable income.
Employment Requirements for Bad Credit Auto Loans
Generally, lenders require that a bad credit borrower be employed at their current job for at least six months, though one year is preferred. Additionally, lenders need to see that a potential borrower has at least three years of employment history, with no gaps lasting more than 30 days between jobs.
If you don’t have the employment history a lender is looking for, your chances for a car loan are slim. Even with long job history, if it’s clear that you jump from job to job, or only remain employed for short stretches of time, you’re not likely to get approved, either.
In some cases, if you haven’t been on the job long, but have a history of stable employment and meet all the other requirements for financing, a lender may consider you. This is rare and depends on the lender you’re working with and your individual situation.
Unique Employment Situations
Now that you know the basic employment requirements for a bad credit auto loan, let’s look at some unique employment situations and how they could impact your ability to get a car loan:
- In addition to being employed for at least six months, lenders that work with bad credit borrowers typically require all your qualifying income to come from one job. This means if you have several jobs, or are a part-time employee on top of your full-time job, only your main income source counts toward the employment requirement.
- If you’re not employed year-round, but instead work a seasonal job every year, you usually have to provide more than your check stubs as proof of income and employment. This means extra documentation such as bank statements and tax returns, typically for at least three years. This is because lenders need to know that you can continue to make the loan payments during the off-season. If you earn unemployment during that time, it can’t be used as proof of income (or employment).
- If you work for cash or don’t get traditional checks, you’re often required to provide notarized letters of employment from your company. Cases like these, though rare, may not even be considered. In these situations, if a lender can’t verify your employment, you usually need to find another way to get financed.
If you’re unable to verify your employment with a lender, you may need to look for lending through a buy here pay here dealership that doesn’t place as much emphasis on your employment.
Ready to Find an Auto Loan?
If you’re ready to get started on the path toward your next auto loan, Auto Credit Express wants to help. We connect consumers with local special finance dealers with the lending resources to approve bad credit car loans.
The process is simple, fast, and free. Just fill out our auto loan request form to get started now!