If you have two jobs and want both incomes to count towards a car loan application, this may be possible.
Two jobs and bad credit financing
Many borrowers work more than one job to make ends meet. Whether you hold two full-time positions or two part-time positions, it is natural to wonder (and hope) that both sources of income can be used to meet a car lender’s income requirements.
In some cases, subprime lenders who specialize in helping borrowers with credit problems accept two sources of income to help meet their requirements. However, this is lender specific. Some subprime lenders may only accept one source of income – your primary – to meet their needs, and the second job can only be used to lower your debt to income ratio (DTI).
The usual monthly minimum income requirement for a subprime lender is typically between $ 1,500 and $ 2,500 before tax (or gross). Most lenders prefer borrowers to do this on a single earned income, although in some cases they can accept self-employment, unearned income, or two separate sources. Unearned income is defined as social security, alimony, child benefit or similar income that is granted.
When applying for auto finance with a specialized financial broker who is enrolled with subprime lenders, you may only be able to put one job in one finance application. However, if you have additional sources of income, you can increase your likelihood of approval – if it is stable and consistent.
Understanding job history requirements
Even if your source of income or multiple sources of income meet the initial requirement for a bad credit auto loan, a lender will likely ask about your employment history as well.
A consistent work history is a good indicator of stability. The longer you’ve kept the same job or worked in the same industry, the more stable you’re likely to be seen by a car lender – and, in turn, have a high chance of getting approval. It’s not just about how much income you’re bringing in, but how likely it is that the income will be sustained over the life of the loan.
This is where the work history requirements come into play. Most subprime lenders require you to have had the same job for approximately six months to a year. If you have a second job, the same requirements usually apply as well. The majority of sub-prime lenders also examine your job history for the past three years and require that you have had no more than 30 days gaps between jobs.
In order for any primary or additional income to count towards income requirements, you must demonstrate that you will receive that income consistently and for the entire loan term you are applying for. Most auto loans have a term of between 48 and 96 months. Therefore, subprime loans in particular must have stability in your work history for both jobs before they can be approved.
This is how you prove your income
If your income is W-2, proving your income is usually simple: provide up-to-date computer-generated check stubs showing the year-to-date income. For your work experience, the lender may ask your employer for an employment review, which usually includes a start date and checks your current employment status.
If you are self-employed, freelance or other contract work, you likely have an income type of 1099. To provide evidence of 1099 income, you will typically need to submit two to three years of tax returns. A subprime lender may also ask you to provide bank statements, but this varies.
For any other type of extra income or unearned income, expect to need a copy of your award letter as proof. A lender may also request a bank statement to prove that you have access to this income and that you will receive it regularly.
Where Can I Find Bad Lenders?
Even if you have gathered all of the required documents to prove that you have the income for a bad credit auto loan, finding a subprime lender is not always the easiest hurdle. Not every dealership is registered with these lenders, and finding one can take a while.
But with Auto Credit Express, We are here to help. We have built a nationwide network of traders who are enrolled with sub-prime lenders. There is no longer any guess as to which merchants have the resources you need for bad credit situations – we are looking for you. Fill out our auto loan application form today. It’s completely free, secure, and only takes a few minutes. We are looking for a dealer in your area without obligation.
Comments are closed.