What to buy a car but cannot afford it. Then go for auto loans but once you get an auto loan the second thing you need to do is to get an approval of the auto loan. In order to get an auto loan approval there are few auto loan requirements that you need to follow. This is important for you as the lender who will lend you the auto loan has to be sure if you are a person with good credit risk and that he can easily give you the auto loan.
The requirements that you may need to know are as follows.
Good credit history:
This is the basic and the most important requirement to issue an auto loan. In order to issue a loan you need to have a good credit history.
That is if you have a good credit background and you have paid back all your previous loans and are clear from all the debts. This will give a good impression to the lender and he will be satisfied to lend you the auto loan. If the lender is not satisfied then he looks over your previous credit score in which he can easily have the entire credit history in one number. The higher the number is the better your credit history will be. If you have already paid all your debts and are free from any then he can lend you the auto loan as soon as possible and waste no time. But a bad history in credit may take few time or maybe the lender may not lend you the loan before you pay your previous debts.
When lending any sort of loan the first thing which the lenders notice is your income. They see this to make clear and to see clearly if the issuer is able to pay back the loan. He has to make clear if the issuer can afford the loan he is willing to have. The lenders will see your bank account and see if you have enough savings and if you have enough income left with you after the monthly cut down of the charges.
Before lending the loan the lenders will have a clear look at your debt situations and make sure if you have paid all your previous debts. In order to check your debt situations the lender uses the debt-to-income ratio in order to decide if your debt is in the line of your income. Having less debt will satisfy the lender and he will lend you the loan soon but if you will have a bad debt then it will be difficult to lend you an auto loan.
What are the Requirements for Auto Loan Approval?
Here at Auto Credit Express, we have worked in the subprime auto loan industry for more than 20 years. Our experience has given us an inside look into how subprime lenders operate and therefore we know what they generally look for in an applicant.
While there is no universal standard, these are the basic requirements for auto loan approval:
A gross (pre-tax) monthly minimum income of $1,500
Subprime lenders will need verification of your income because they want to make sure that you can afford a car payment. They will also calculate your debt to income ratio and a potential payment to income ratio to see how your finances hold up when adding a car and insurance payment to the mix. They do this because they want to give borrowers the best chance of completing the loan, and these methods help set a realistic budget for consumers to stick to.
Full-time employment or a guaranteed fixed income
To go along with the income requirement, lenders want to ensure that you make that income each and every month. You will probably be asked about the number of hours you work, the number of hours you are guaranteed, overtime, and the like.
Are 18 years of age or older
18 is the minimum legal age somebody needs to be in order to obtain an auto loan in the United States. Anybody 17 or younger is still considered a minor in the eyes of the law, and minors cannot enter into a contract.
Current resident and legal citizen of the United States (or Canada)
This one is pretty self explanatory. You will need to provide proof of your residency at some point during the process, and it also helps if you have lived at the same residence (or same geographic area) for at least six months, as it is a sign of stability.
What about a credit score requirement?
There is no set in stone credit score requirement when you seek auto loan approval. Each person’s application will be evaluated individually, and whether or not they are approved is dependent upon that person’s situation and circumstances.
It is important to remember that each lender is going to have their own set of requirements, but the above qualifications are typically what we’d expect them to be.
How Long Does it Take to Get Approved?
Nearly all subprime auto lenders work indirectly through car dealerships. Trying to find one of these dealers on your own can be both inconvenient and time-consuming.
We here at Auto Credit Express try to make the process of getting approved for a bad credit auto loan as easy and hassle-free as possible. How? We have assembled the nation’s largest network of dealerships that specialize in helping people in unique credit situations.
When you apply with us, we will find one in your area that stands to give you your best shot at an auto loan approval. The best part is that our service is free, and we will do everything in our power to try to help you get the vehicle you need as soon as possible.
If you have bad credit and need a car, we can help. To get our fast and easy process rolling, all you need to do is complete our secure online application today.