Not everyone has a nine-to-five job. For those that don’t, how do you get into an auto loan without income verification? Well, the truth is, it may not be the easiest task to tackle, but here’s what we know.
Income & Auto Loans
When you apply for a car loan, it’s likely that one of the first things a lender is going to require is proof of income, and they’re going to verify it. Since you’re financing, you have to repay the loan and need proof that tells the lender you’re able to do just that. Without any verifiable income, you’re very unlikely to get approved for an auto loan.
However, there are many unconventional ways that people earn income. Many borrowers earn their income through freelance work, rental properties, or are on permanent disability. Proving these income sources isn’t as easy as bringing a check stub, though.
Most times, with a non-W2 income source, you’re likely to need two or three years of tax returns to verify and prove your income. Bank statements don’t usually do the trick, since these don’t prove where the money is coming from or that it’s been reported and taxed.
For long-term sources of awarded income, such as permanent disability or alimony, expect to need an award letter that proves you’re going to receive that income for the entire duration of the loan.
No Income Auto Loans
No matter what auto lender you choose to go with, they’re going to require some form of verifiable income. Depending on the lender, they may only accept certain types of income.
If you don’t bring in any sort of income, then your other option is to bring someone else onto the car loan application, making it a joint auto loan. Joint car loans have co-borrowers who both share equal responsibilities for the vehicle and the loan.
If you have no income, but your spouse or life partner does, they may be able to help you meet income requirements. Co-borrowers are almost always spouses or life partners since it’s typically required that you prove you both have access to each other’s assets and income.
If you’re approved, then you both get your names on the car title, and both of your credit scores and reports are impacted by the activity on the loan.
Credit Score & No Income Auto Loans
The fact is that car buyers with FICO scores below 550, currently in bankruptcy, or with a total household income of less than $1,200 a month have very little chance of qualifying for a car loan through a subprime lender. Most consumers facing these circumstances will end up either paying cash for a vehicle or financing one from a BHPH car dealer.
On the other hand, many buyers searching for what they think are "no income auto loans" that have successfully completed a bankruptcy, have a credit score in the mid-500 range or better, and a gross monthly income of $1,800 (or more) often believe they'll never qualify for an auto loan – especially if the lender needs to review their credit report. But in the majority of cases, this isn't true.
Look at it this way: anyone that tries to entice applicants by advertising "no income" loans is only hoping to lure the most desperate car buyers. After all, how can anyone pay back a loan if they have no way to pay it off? Secondly, it's almost a given that this type of loan program will not reestablish someone's auto credit – something for borrowers to consider if they don't want to find themselves in the same credit situation the next time they need a car.
So we ask buyers who meet most high-risk lenders' minimum requirements to consider this: imagine driving a more reliable car that's either covered by a new car warranty or a used car service contract while enabling you to reestablish your car credit at the same time.
Sounds like a better deal, doesn't it? Here's how it works:
Subprime auto lenders consider your ability, stability, and willingness to pay when you apply for financing. This means taking a good look at your work and income security, residency stability, and more, as well as requiring a down payment. Down payments increase your odds of getting approved since they lower the finance amount and lower the chance of default.
Finding the Right Car Dealer
Finding bad credit dealerships isn’t always easy, but we want to help. Here at Auto Credit Express, we’ve created an expansive network of dealers that assist bad credit borrowers.
By visiting websites that support these types of programs, such as ours at www.autocreditexpress.com, applicants are able to use the resources available to them. Loan calculators can give them a reasonable idea of what they can afford, videos can educate them about the subprime auto loans process and, to top it off, there are also live operators available during business hours who are anxious to answer any questions they might have.
We also make no pie-in-the-sky promises with regard to guaranteeing that an application will be approved. Unlike some sites that advertise "no income auto loans", the lenders our dealers work with have income and residency requirements that must be met in order to qualify for a car loan.
Get the ball rolling on your next car loan right now by filling out our auto loan request form. We’ll get to work looking for a dealership in your area, completely free of charge and with no obligation.