Work history is just one of the many things that lenders look at when you apply for an auto loan. If you have bad credit, it's very likely that a subprime lender is going to ask about your past jobs and how long you’ve been at your current job.
Why Your Work History Matters
Auto lenders like stability. A stable borrower is one that’s more likely to keep their income and residency, and have a better chance of repaying the loan successfully. Generally speaking, the longer you’ve been at the same job or lived in the same area, the less of a risk you are to a lender, which increases your chances of getting approved for a car loan.
If you were recently hired and your credit is poor, your best bet is probably to give yourself more time on the job. It may not be ideal if you need a vehicle quickly, but simply giving yourself a few more months could be the difference between a denial and an approval for an auto loan.
Work History Requirements of Auto Lenders
While having a steady income can help you get approved for a loan, it may not be enough for a lender, especially if your credit history is a little spotty. With a lower credit score, it wouldn’t be considered rare if your lender asked about your work history, or asked for a month of check stubs.
In a perfect world, a bad credit lender (or subprime lender) wants a borrower to have had the same job forever. Since this is rare, they tend to require at least three years of consistent work history without large gaps between jobs – large gaps usually meaning longer than 30 days.
When it comes to your most recent job, lenders typically require proof that you’ve been at that place of work for at least six months to a year. In some cases, they may make an exception if you recently switched employers or positions, but maintained the same line of work.
However, if you change jobs frequently or tend to move around a lot (unless your job requires this), a subprime lender may not approve you for a car loan.
Other Requirements and Your Income
When it comes to income requirements for a subprime auto loan, on top of meeting lender-required minimum time on the job, subprime lenders require earned income. The minimum monthly income requirement of subprime lenders is usually around $1,500 to $2,500 before taxes.
To prove you meet the income requirements, they also require recent computer-generated check stubs that also show year-to-date income. You also need to meet a debt to income ratio, and as a general rule, it shouldn't be higher than 45% to 50%.
Ready for a Car Loan?
Lenders want borrowers to be stable and consistent, since it means there’s a higher chance of the loan being repaid. If your work history is stable, it's a good sign to an auto lender.
If you’re ready for a subprime car loan and you need a dealership that can work with your credit, look to us at Auto Credit Express! We match bad credit borrowers to dealers with special finance departments, and we can look for one in your area with our free auto loan request form. It’s secure, quick, and completely online, so get started now!
