Buying a new car is an exciting time. With so many options available, it can be hard to choose which car is right for you. Unfortunately, if you do not have a job, you may find it a little more difficult to find somebody willing to finance you.
Consumers must understand that there are multiple requirements to be approved for an auto loan. Lenders do not just look at employment history, but also factors such as your credit score, past payment history, etc..
Do You Need a Job for an Auto Loan?
To qualify for an auto loan with bad credit, you must have a job or source of income. Depending on your location, most lenders like to see an auto loan applicant with a monthly income of at least $1,500 pre-tax. However, the income source can only come from one job, which can make things complicated for people who have multiple sources of income.
Sources of Income for an Auto Loan
The $1,500 monthly income requirement for an auto loan isn’t just limited to a job. You can include things such as social security, disability, and even pensions. However, wages from social security and other retirement accounts are not garnishable.
This means that if you default on your auto loan, the lender may not garnish your social security income. This can make lending to those on social security risky for a subprime lender.
Job History for an Auto Loan
Lenders love to see stability in any loan applicant. Most lenders will want to see that you have been at your current position for at least 6 months. Some lenders will want to ensure you have a solid work past as well. They may ask you about career information dating 3 years back.
Although it is not vital to have been at the same position for the last three years, it can help boost your odds of approval with certain lenders. If you have large gaps of unemployment on your record, you may find it harder to obtain an auto loan.
Lenders will want to see proof of your taxable income in the form of paystubs to ensure the repayment of the auto loan. If you have had a spotty job history with bad credit, you may have difficulty finding a lender who can work with you.
If you are looking to buy a new car but have less than perfect credit, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!