A bad credit car loan, or subprime car loan, requires a little more documentation than a regular one. The good news, though, is that these items shouldn’t be difficult to locate because you probably have them at home already!
To help you get through the approval process, we’ve compiled a list of the documents that subprime auto lenders typically require.
Gathering Your Documents for the Approval Process
Before you can take delivery, subprime lenders generally require these items for auto loan approval:
- Proof of phone – An active, working phone in your name. It can’t be a prepaid phone. Bring a copy of your phone contract or a recent bill that proves the phone is yours and is working.
- Valid driver’s license – Your license needs to be current, not expired, revoked, or suspended, and has to have your current address listed.
- Proof of income – Computer-generated check stub from the past 30 days that shows your year-to-date earnings. Lenders typically require a minimum income of $1,500 to $2,000 a month before taxes. If you’re self-employed, you most likely need to bring at least two years of tax returns and/or bank statements.
- Proof of residence – Bring a recent utility bill or bank statement in your name, with your address listed.
- List of references – At least five to eight personal references. Have the names, addresses, and phone numbers of family members, friends, or co-workers that have given you permission to list them. References of family members cannot share your address.
- Down payment – Bad credit car loans require down payments, usually of 10% of the vehicle’s selling price or at least $1,000, whichever turns out to be less. Lenders also accept a trade-in with equity as the down payment, or part of the down payment, depending on the car.
More Documents May Be Required
While this list mentions the main items required by subprime lenders, depending on your credit history, a lender may require additional documents.
For example, if you plan on trading in your vehicle, bring the title to make the transition easier. Bring the registration, as well, if you plan on transferring license plates.
If you're going through a bankruptcy, or just finished one, more documents may be required to qualify for an auto loan. If you are currently in bankruptcy, you must get permission from the court to incur more debt. On the flip side, if you've recently completed bankruptcy, make sure to bring your discharge papers with you.
Auto Credit Express Tip: Other things to remember during the car loan process are: taxes, license fees, auto insurance, GAP insurance, and factoring in the cost of regular maintenance.
One Step Closer
By keeping yourself organized and having your documents at the ready, you can make the whole process easier for yourself. Knowing what to expect, and how to plan, is half the battle.
If you haven’t found a lender just yet, and don’t know where to start, then start with us at Auto Credit Express. We work with dealers nationwide that have special financing for buyers with bad credit. To locate a dealership in your area that may be able to work with you, simply fill out our free car loan request form.