If you’re working part-time and need an auto loan but your credit isn’t the best, you may be looking at subprime car loan options. Subprime (bad credit) auto loans come with different requirements than the typical car loan, but different doesn’t mean complicated! Here are some examples of what to expect from bad credit auto lenders.
Part-Time Work and Income Requirements
The amount of income you’re bringing in is typically more important than the hours worked when it comes to bad credit car loans.
Subprime lenders often require a minimum monthly income of $1,500 to $2,000 before taxes (gross), and proving this income with pay stubs is a qualification for borrowers with poor credit. These lenders require computer-generated check stubs showing year-to-date income.
If your income relies on tips, such as serving or delivery services, be sure you’re accurately reporting them. Without an accurate representation of what you’re actually making in your proof of income, there isn’t much a subprime lender can do for you.
Because they work with borrowers with lower credit scores, they need to have proof that you can afford the loan. This means verifiable, taxable income must be proven to subprime lenders.
Multiple Sources of Income
If you have more than one job, lenders usually only consider one source of income: your primary job. If all your work is part-time, they consider your highest-paying part-time job for the minimum income requirement. However, this doesn’t mean that your other sources of income count for nothing!
Your other part-time jobs or any other additional income may help you meet the debt to income (DTI) requirement. In order for additional income to count, it needs to be proven with the necessary documentation. It also needs to be consistent, meaning non-seasonal work or benefits that end prior to when the loan ends may not count. All lenders are different, so be up front with the finance manager about your work situation.
Work History and Other Requirements
Many subprime lenders require buyers to have a consistent place of employment for at least six months to one year. They also usually require a minimum work history of three years with no gaps longer than 30 days between jobs.
Along with proof of income, you need proof of residency to qualify for an auto loan. While gathering your pay stubs, be sure to save recent bills or bank statements that have your current address listed on them.
It also helps if you have been living at the same residence for at least one year. Subprime lenders may view borrowers who move a lot less favorably, so keep that in mind when applying. However, they do account for special circumstances, such as if you’re moving for work.
Subprime lenders also require a down payment of at least $1,000 or 10% of the vehicle’s selling price. While collecting your documents, be sure to start saving for a down payment. The more you can save, the better.
The Bottom Line
Subprime auto lenders require you to have consistent income, whether it be part-time or full-time. They need to see verifiable, taxable income that proves you can afford the monthly payment if they approve you for a loan. Be ready to prove your residency, work history, and income, and report your tipped income.
Getting approved for a bad credit car loan doesn’t have to be stressful or complicated, and it can start with us at Auto Credit Express. We work with dealerships that are able to accommodate unique credit situations, nationwide, and we match you with a dealer in your area. Simply fill out our free, no-obligation auto loan request form to get started!