Getting an auto loan with bad credit may not be a picnic, but there’s no need for your credit to rain on your parade! Chances are, getting a car loan with bad credit might be easier than expected as long as you’re working with the right lender and you have these four important documents: proof of identity, proof of income, proof of residence, and proof of a working telephone.
You Already Have the Tools to Be Successful
When you need to get a bad credit auto loan, there are more steps involved than there are when applying for a car loan with good credit. The good news is that you probably already have all the things you need to begin the application process.
Getting a bad credit auto loan means applying with a subprime lender. These lenders work with bad credit borrowers, and they need to verify some basic information before they offer you a loan. They do this to make sure you have the ability, stability, and willingness to be a successful borrower.
How do these lenders measure success? A loan that’s paid on time each month and completed is pretty much the only definition of a successful car loan. Since there’s no crystal ball to tell them whether or not someone is going to have a successful auto loan experience, most lenders rely on your credit score and the information in your credit reports.
Bad credit car lenders don’t have that luxury. Since most borrowers with poor credit don’t have a good track record, lenders need to rely on other factors to offer approvals. Lenders want you to successfully complete your auto loan, and what they need from you are four simple documents.
4 Important Documents You Need
In order to judge whether or not to approve a bad credit applicant, subprime lenders have specific requirements that their borrowers must meet. The specifics vary by lender, but as a general rule, all subprime lenders need you to prove that you have what it takes to complete the loan.
When you have bad credit, you need these for things to qualify for a car loan:
- A pay stub – In order to qualify for an auto loan, you need to be able to make your monthly payments. The monthly payments are based on many factors, such as the vehicle selling price, loan term, interest rate, taxes, and fees. Typically, subprime lenders ask you to prove that you make at least $1,500 to $2,000 a month before taxes with a recent computer-generated pay stub that shows your year-to-date earnings.
- A utility bill – In order to show a lender that you have a stable residence, you have to provide a utility bill in your name for the address you list on your car loan application. This lets them know the vehicle they’re financing is going to be in one place (for the most part) and where to look for it if you stop making payments.
- A phone bill – You need to prove to lenders that they can contact you in case they need to. Providing a landline or contract cell phone bill in your name for the address on your application does this.
- A valid driver’s license – Lenders ask you to provide this piece of documentation to prove that you are who you say you are. It also provides proof that you’re legally allowed to drive and finance a car.
The Car Connection Tip: You’re typically also required to provide a down payment for any bad credit auto loan. The amount varies by lender, but the general standard is usually a down payment of at least $1,000 or 10% of the vehicle’s selling price, whichever is less.
Get the Car Loan You Need
Now that you know the power is in your hands for getting the bad credit car loan you need, you just have to find a lender that’s right for you. Rather than searching all over town, start with The Car Connection instead.
Not only can you research new and used vehicles, but you can get connected to a local dealership that works with the lenders you need, too. We’re teamed up with a nationwide network of special finance dealers, and take pride in helping bad credit borrowers get connected to them in their areas.
Don’t wait any longer! Just fill out our free, fast, and no-obligation auto loan request form to get started now.