If you have two jobs and want both of your incomes to count toward a car loan application, it may be possible.
Two Jobs and Bad Credit Vehicle Financing
Many borrowers work more than one job to make ends meet. Whether you work two full-time positions or two part-time positions, it’s natural to wonder (and hope) that both income sources can be used to meet the income requirements of an auto lender.
In some cases, subprime lenders that specialize in assisting borrowers with credit challenges do accept two sources of income to meet their stipulations. However, this is lender-specific. Some subprime lenders may only accept one income source – your primary one – to meet their requirements, and the second job may only be used to lower your debt to income (DTI) ratio.
The common minimum monthly income requirement of a subprime lender is typically around $1,500 to $2,500, before taxes (or gross). Most lenders prefer that borrowers meet this with a single earned income, although in some cases they may accept self-employment, unearned income, or two separate sources. Unearned income is defined as Social Security, alimony, child support, or other similar income that’s awarded.
If you apply for auto financing with a special finance dealership that’s signed up with subprime lenders, you may only be able to enter one job on a financing application. However, having additional sources of income can still increase your approval odds – if it’s stable and consistent.
Understanding Job History Requirements
Even if your income source or multiple income sources meet the initial requirement for a bad credit car loan, a lender is likely to ask about your employment history as well.
A consistent work history is a good indicator of stability. The longer you’ve kept the same job or worked in the same industry, the more stable you’re likely to be viewed by an auto lender – and in turn, have a high chance of approval. They’re not only concerned with how much income you’re bringing in but also with the likelihood of the income continuing for the whole loan term.
This is where work history requirements come into play. Most subprime lenders require that you’ve had the same job for around six months to one year. If you have a second job, typically, the same requirements apply as well. The majority of subprime lenders also look into your job history over the last three years and require that you haven’t had gaps longer than 30 days between jobs.
For any primary or supplemental income to count toward income requirements, you must provide proof that you’re receiving that income consistently and for the entire loan term that you’re applying for. Most auto loans are between 48 and 96 months, so subprime ones, in particular, need to see stability in your work history for both jobs before you earn an approval.
How to Prove Your Income
If your income is W-2, then proving your income is usually simple: provide recent computer-generated check stubs that show year-to-date income. For your work history, the lender may ask your employer for employment verification, which usually includes a start date and verifies your current employment status.
If you’re self-employed, do freelance or other contract work, then you likely have a 1099 income type. To prove 1099 income, you typically need to provide two to three years of tax returns. A subprime lender may also ask you to provide bank statements, but this varies.
For any other type of supplemental income or unearned income, expect to need a copy of your award letter for proof. A lender may also ask for a bank statement to prove you have access to this income and that you’re receiving it regularly, too.
Where Do I Find Bad Credit Lenders?
Even if you’ve gathered all the necessary documents to prove you have the income for a bad credit car loan, finding a subprime lender isn’t always the easiest hurdle to overcome. Not every dealership is signed up with these lenders, and searching for one could take a while.
But at Auto Credit Express, we’re here to help. We’ve created a nationwide network of dealers that are signed up with subprime lenders. There’s no more guessing on which dealerships have the resources you need for bad credit situations – we’ll do the looking for you. Get started today by filling out our auto loan request form. It’s completely free, secure, and only takes a few minutes to complete. We’ll search for a dealer in your local area with no obligation.