Don't fall for the web sites that suggest that all customers will qualify for a loan. If these sites are working with legitimate car dealers that will help you re-establish your credit, there will always be minimum requirements that will be requested by lenders. These requirements usually include income, proof of age and citizenship as well as employment verification.
Bad Credit Car Loan Income Requirements
Let's start with income. For most bad credit car loans, the lender will require a minimum monthly W-2 (regular employee) income of $1,800 if your credit score is less than 640. This requirement refers to your gross income, meaning the amount you are paid before withholding and Medicare/social security taxes are taken out. Lenders require this minimum income so that you can afford a car payment and full coverage insurance in addition to your other bills.
This bad credit car loan
income requirement is, if you noticed, for W-2 employees. This means that your employer furnishes you with a W-2 income statement at the end of the year that reflects the wages you were paid. If you receive a 1099 form (which means you are an independent contractor) or you are self-employed, the situation becomes more complicated. In the current lending environment, most bad credit lenders will not accept anyone other than W-2 employees. Those lenders that might consider self-employment income will only do so with three previous years of income tax statements that have been professionally prepared. You may also be required to furnish bank statements to support your declared income.
Bad Credit Car Loan Employment Requirements
The next requirement concerns the length of your employment. As a rule, most bad credit car loan lenders will require at least one full year with your current employer as well as an additional two years of verifiable employment history.
Bad Credit Car Loan Age Requirements
Another requirement has to do with your age and citizenship status. All bad credit car loan applicants must be at least 18 years of age and U.S. citizens. There are no exceptions to these two rules.
Bad Credit Car Loans and Bankruptcy
The next issue has to do with the status of any bankruptcy filings. As a general rule, most bad credit lenders will require that all Chapter 7 bankruptcies be discharged, although some will consider you if your 341 meeting has been completed. If you are currently in a Chapter 13 bankruptcy, you must first obtain an order to incur additional debt through the court appointed trustee. But you should also be aware of the fact that in the current economy, most lenders are avoiding applicants that are involved in an open Chapter 13 and are looking for bad credit car loans in bankruptcy
Bad Credit Car Loans and Repossessions
The final requirement has to do with vehicle repossessions
. All lenders will look at any repossession in your credit history. If you've had one within the past year, it must be included in a bankruptcy (this includes both voluntary and involuntary repossessions). If you have a repossession that occurred before or after your bankruptcy, you will not qualify for a bad credit car loan.
Those are the usual basic requirements for bad credit car loans
. If you have additional questions, there are a number of legitimate web sites where you can find additional information on bad credit car loans. Many of them also feature a secure application that you can fill out in the comfort and privacy of your own home. These sites have helped thousands of qualified applicants with bad credit obtain reliable transportation and re-establish their credit at the same time.