There are several car buyers who are wondering if the standards for an auto loan with no money down apply to people with subprime credit scores at AutoNet Financial®. It would be easy for us to say "Yes", but that would cause us to be doing you a disservice. As a consumer, you must understand that subprime car loans is a type of financing that is very different from conventional financing. However, there are a few basic requirements that must be met when applying with us:
- At least two years of employment history
- Monthly gross income of $1500.00.
- No repossession within the last 12 months
- Must reside in the United States or Canada.
If you meet these simple requirements you can fell free to click the "Apply Now" button and work your way to instant auto loan approval. Otherwise, you read on and gather additional information that can help you.
How Subprime Credit Affect No Down Payment Car Loans
The first thing you must understand is that having subprime credit generally means that your FICO or Vantage score is anywhere between 640 and 500. This is clearly not a good range to be in as lending companies will view you as a high risk borrower, which makes it impossible to get loan approval without a down payment. Lenders know that people who need car financing with bad credit and have no money for a down payment are more likely to default on their loan, and cause them to be stuck with a vehicle that has less value than the original loan agreement.
The only real chance that you have to actually get approved for car financing with no money down is to either:
- Take on a co-signer
- Engage in credit repair
In most cases an individual would have to use both methods to improve their chances of qualifying for financing. Now, AutoNet Financial® can help you get approved for subprime auto loans, but we can not guarantee that a down payment will not be required.
Examining Your Income for Bad Credit Vehicle Loans
First and foremost is your income. There are a small amount of banks that will look at your application with a $1,000 gross monthly income, however, most lenders will require you have an income of at least $1,500 per month (gross) if you have subprime or bad credit. Remember, your gross income is the money that you earn before taxes.
Some people may try to qualify for car loans with a low income because they have better credit scores, but even with a score higher than 640 your gross income still needs to be in this range. The lenders will be more willing to work with you, but they still have to make sure you can afford the car payment and have full coverage auto insurance.
For the self employed, the situation is more complicated. The self employed don't receive wage and tax statements from an employer at the end of each year. Instead, you get a 1099 form. If you are self-employed, you need to prove income from the past three years with tax statements that are professionally prepared. Sometimes, a lender needs bank records in addition to these tax forms.
Bankruptcy and Repossession with Poor Credit Financing
Second of the requirements deals with subprime auto loans after bankruptcy. For those with Chapter 7 bankruptcies, you must be discharged before you can be approved for a loan. If you're in a Chapter 13 bankruptcy, you need to get in touch with the trustee assigned to your case and get an order to incur additional debt from the court. Without this order, no lender will consider you for a subprime credit loan.
The next thing you must be aware of with auto financing with credit problems is repossessions. You can't have a repossession within the past 12 months unless it was part of a bankruptcy on your credit report when you apply for a loan. This includes both repossession types - voluntary and involuntary.
- Voluntary
- A voluntary repossession occurs when you willingly turn in your vehicle to the lender to avoid that physical repossession. This still goes on your credit report as a repossession, and the lender can still sue or request payments on your loan.
- Involuntary
- Involuntary repossession is the traditional repossession that people think of when the borrower has refused to make payments on their loan, and has not returned the automobile at the proper time and place. Therefore, the dealer must hire a company to collect the property.
Age and Job Status Requirements for Subprime Car Loans
Many first time car buyers forget that their age plays a role in buying a car. By law, you must be at least 18 years old to apply for a subprime vehicle loan with any lender. If you're under 18 years old you cannot apply for a loan because you cannot legally enter a contract with a finance company.
Finally, you must have a job history and proof of residency. A utility bills that contains your name and current address as well as a phone bill (land line or cell) with your name and your current address will suffice as proof of residency.
