If you’re looking for a car loan but the thought of a lender checking your credit stops you in your tracks, take that next step – Drivers Lane can help. When you’re hoping your job counts as your credit, there are two options you can explore. Let’s look at your choices.
Your Job is Your Credit – No Credit Check
If you’re hoping to find a car without anyone glancing at your credit score or reports, you may want to start your search at a buy here pay here (BHPH) dealer. At a BHPH lot, you’ll find that the dealer is the lender (that’s why they’re known as in-house financing dealerships). Because they don’t rely on outside resources to do the lending, it’s not necessary for them to check your credit, which makes their income-based car loans easier to qualify for.
With BHPH dealers, the biggest concern is typically if you make enough money to make your loan payments, which may need to be paid in person at the dealership, possibly on a weekly or bi-weekly basis. If you’re living paycheck to paycheck, this can be convenient, since most BHPH dealers tailor payments to your pay schedule to ensure they get paid.
However, if you don’t live near the BHPH lot, this payment process could prove to be a hassle. Other points about financing a car from a BHPH dealer that might become a hassle are cars that are usually older, high-mileage vehicles that come with higher than average interest rates. Plus, because these dealers don’t check your credit, they may not report your loan or payments to the credit bureaus. Also, payments just one day late often result in the threat of repossession and can hurt your credit score (these dealers report missed payments).
Special Finance Dealers Can Provide a Better Alternative
Even if you have bad credit or no credit at all, buy here pay here dealers aren’t your only option for getting the auto loan you need. Special finance dealers work with subprime lenders that look beyond your credit score to help get you approved for financing.
Bad credit lenders look at factors such as your monthly income, employment, residency, and dig into why your credit score is the way it is. They look to see if you have habitual bad credit (if you struggle to pay bills on time), or if it’s situational (an unforeseen event has resulted in your credit score taking a hit).
These lenders have in-depth requirements you must meet in order to get financing, but it can be worth it in the end. In this case, your timely payments are reported to the credit bureaus, and with each full, on-time payment, your credit can improve.
The specific requirements vary by lender, but here are the basic requirements of getting a car loan through a subprime lender:
- Proof of income: Your most recent computer-generated check stub, showing year-to-date income. Lenders require you to make at least $1,500 to $2,000 a month before taxes from a single employer, where you’ve worked for at least six months (read – decent income from a steady job.)
- Proof of residency: A current utility bill in your name for the address listed on the loan application (read – not going to up and disappear).
- Proof of a working phone: Landline or contract cell phone, in your name. No pre-paid cell phones will work in this instance (read – can we reach you if need be).
- References: Six to eight personal references complete with names, addresses, and phone numbers (read – real people who can verify you are who you say you are).
- Driver’s license: Typically required if you plan to drive the vehicle you’re financing (read – should be self-explanatory).
- Down payment: Lenders typically require at least $1,000 or 10 percent of the vehicle’s selling price, whichever is less (read – show us you’re willing to invest in this loan).
Of course, there may be other qualifications you need to meet, depending on your situation, but these basics are generally a good rule of thumb.
Getting the Financing You Need
If you want a lender to rely on your income to approve you for financing, weigh all your options before you decide to head to a local buy here pay here dealer – you might be surprised by what a subprime lender can do for you.
If you’re willing to give a special finance dealer a try, but don’t know where to start, let Drivers Lane be your guide. We work with a nationwide network of special finance dealers that work with the subprime lenders you need. Fill out our easy, free, no-obligation auto loan request form today, and we’ll get to work connecting you with a local dealer!