Unreported cash wages can very easily lower the approval chances for any auto loan applicant. Many bad credit auto loan shoppers are rejected just because of their unauthorized earnings. We, at Valley Auto Loans, understand each aspect of bad credit car loans because have been offering specialized car loan service to poor credit borrowers since many years. Through this official blog, we offer finance market related tips to help poor credit consumers make better decisions in their life.
Over the years, we have observed that many poor credit shoppers fail to receive approval because either they do not have a W-2 or the one they have is not the true representation of their total earning. This usually happens to consumers who are paid in check and cash that are not accounted for while calculating tax. Independent contractors do not receive a W-2 form, but should receive another form called the 1099-MISC. It is extremely important to keep in mind that any income received via regular check or by cash is required to be reported, and a tax return must be filed accordingly.
Unlike most of the traditional banks, the subprime lenders ask for the proof of income as a qualification parameter. It is not possible to prove the income if the applicant does not have a W-2 form or the income is not clearly mentioned on the tax return. Most of the subprime lenders also have a minimum income requirement to qualify for an auto loan. These companies determine the car budget and the debt-to-income ratio on the basis of figures reported on the tax return. The minimum income requirement for most companies varies between $1,500 and $1,800 per month. Many applicants making this earning are rejected because their tax return does not reflect the same. Rejection is also possible if the actual income is higher than the reported income, making the monthly expenses appear out of proportion.
Therefore, bad credit auto loan shoppers must be extremely careful about all incomes made by non payroll check and cash. If not dealt with care, this will lead to rejection of auto loan applicants. Valley Auto Loans is a reputed auto loan platform that has solved auto credit related issues for many bad credit borrowers. Instead of trying out other long and arduous alternatives, come to Valley Auto Loans for guaranteed approval of car loans with poor credit.