If you're self-employed and have bad credit in Los Angeles, you may still be able to get an auto loan. The keys are being able to meet the lender's income requirements and bringing in the right documents to prove your income. Self-employed persons in Los Angeles can use copies of their most recent tax returns to serve as proof of income on a bad credit car loan, and bank statements may be asked for in addition to those.

Bad Credit Car Loan Income Requirements

What Do You Use to Show Proof of Income for Self-Employed Persons in Los Angeles?When dealing with bad credit auto financing in Los Angeles, you probably aren’t going to be able to get pre-approved through your bank or credit union. You should still try, but don’t be surprised if they turn you down. Instead, you’re generally going to need to work with a subprime lender.

These lenders are available indirectly through special finance dealerships, and they offer financing to borrowers dealing with various credit issues including no credit, bad credit, and even bankruptcy.

Subprime lenders have specific income requirements you need to meet. Although the minimum varies, most require that you make at least $1,500 to $2,000 a month before taxes from one job. They also require proof of income with the proper documents.

W-2 employees are usually asked to provide their most recent computer-generated pay stub to prove their income. If you’re not a regular W-2 employee, you’re considered to be self-employed or an independent contractor. Without a pay stub to show, self-employed persons in Los Angeles need to bring in copies of their tax returns.

Subprime lenders verify your income by looking at your Schedule C of the income tax form. They use your net income after business deductions as your gross (pre-tax) income. Subprime lenders may require two or more years of tax returns, as well as recent bank statements.

Co-Borrowers and Bad Credit Auto Loans

If you find that you don’t meet the lender’s minimum income requirement as a self-employed person, what can you do to get approved? At this point, you should consider getting a co-borrower on the car loan.

Co-borrowers are someone who signs the loan documents and shares ownership of the vehicle. What makes a co-borrower helpful is that you can combine incomes with them if they are your spouse. This means they can turn the tides in your favor if you aren't able to qualify on your own.

You also may be able to qualify for better loan terms by adding a co-borrower. If they have good credit, putting them on the loan is beneficial. Even if you're able to qualify for a loan on your own, adding a co-borrower to try for a better interest rate is still possible.

Need Help Finding a Dealer?

As long as you have the right documents to prove your income and meet the subprime lender’s income requirements, it's still possible to get approved for an auto loan even if you have bad credit.

Finding a dealer that works with credit-challenged consumers in LA isn’t always easy, but we’re here to help. At Auto Credit Express, we match car buyers to local dealerships that have the lending resources to assist people with bad credit.

Don’t wait for an opportunity to arise out of nowhere. Take action today by filling our simple and free auto loan request form.