If you’ve recently started a new job, it’s only natural to consider improving your vehicle situation. Maybe you don’t have a car and need transportation to get to work, or maybe your new income gives you more flexibility to purchase a more reliable upgrade. But applying for a car loan gets a bit trickier when you have less than perfect credit.
Auto finance when you have a new job and bad credit
If your credit is poor, you may not be able to get approval for a car loan from a traditional lender. Instead, you may need to look for alternative financing. Subprime lenders are able to work with bad credit situations; they just look at the others qualifying factors when making approval decisions.
At the end of the day, all that risky lenders want is for you to pay back the money you borrow. As such, they put more emphasis on the income and employment status of the applicant. There is no national standard, but a subprime lender will typically use requirements like:
- A monthly income at least $ 1,500, before taxes
- Full-time employment or guaranteed fixed income
- 3-4 continuous months on the new job
- Temporary or seasonal employees are not eligible if they have been in the job for less than six months
Again, these are not hard and fast rules. These are just the general qualifications that most subprime lenders start with.
Every situation is different
If you’ve recently started a new job, your credit is damaged, and you’re looking for auto financing, the important thing to remember is this: Everyone’s situation is different. Subprime lenders know this and understand it.
If you do not fully meet all of the above requirements, there are many extenuating circumstances that they will take into consideration. Here are some scenarios that can be taken into account in a lender’s decision:
- You held your previous job for an extended period
Your old job can be just as important as your new job. If you can prove that you worked two or more years continuously with your former employer, most lenders will feel more comfortable with your change of job. You may also be viewed more favorably if you have had a quick transition between jobs and have not been unemployed for an extended period. If you can’t justify long-term employment, having the same permanent residence for a long time could help your case, especially if you are a landlord and not a tenant.
- You changed jobs but stayed in the same field
If you have changed jobs because a better opportunity arose in the same field, it will matter to lenders. They understand that people will take advantage of new opportunities to change their scenery or pay better. If this is the case for you, it may not matter if you’ve been in your new job for less than three or four months.
- Do you have situational bad credit?
If your credit situation can be attributed to an unforeseen life event, you have situational bad credit. If you’ve suddenly lost your job but have an otherwise strong credit and employment history, you’ll be viewed much more favorably than someone with an uneven job and a payment history.
There are many other scenarios that a subprime lender could consider. It may be true that the longer a candidate has been in the job, the better they will be perceived, but as long as you can explain your situation and prove your income and employment with bank statements, pay stubs and / or tax forms, you may still be able to be approved.
We can help
When you have bad credit and need a car loan, job stability becomes an important factor. But there are many circumstances in which a person can be approved even if they have recently started a new job.
Meet the needs of your vehicle with the help of Auto Express Credit and our nationwide network of special auto dealers. All you need to do to start the process is to fill out our free form and secure online application.
And if your job change resulted in a few extra expenses that add up, you might apply for a personal loan to get an advance on your paycheck to take care of them.