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Getting A Self Employed Car LoanValley Auto Loans » Tips & Guides » Special Financing Options » Self Employed Car Loans

Car Loans For Self Employed People

You can get a “self employed auto loan” for a new or used car even with a bad credit history or bankruptcy.

Applying for car loans for self employed with bad credit can be as easy if you have the correct paperwork.

Valley Auto Loans has lenders who supply car loans for self employed with bad credit or good. They can save you and your family a lot of money with a better interest rate than the average bad credit auto loan companies. We can also show you how to save thousands on the selling price of your next car.

However, with self employed loans, the car loan income verification documents you must show are different for a self employed person than for W2 employees.Self Employed Auto Loans

Car Loans For Self Employed, Easy Process

Whether you own your own business, or you are an independent contractor working for a company, you can verify your income with tax returns and other tax documents.

If you are self employed but can not prove your income, you will not be able to get a secured loan unless you have documented income proof like a 1099.

Independent contractors and others who work on contract with companies receive a 1099 form for reporting their income instead of a W2 form. The W2 form documents wages for an employee, and the 1099 documents contract payments to the worker.

If you are in business for yourself, and you need a self employed car loan, you can use your 1099 forms. This along with your tax returns, to verify your income will be sufficient to prove your income.

Valley Auto Loans uses a simple auto loan application that makes your application process fast and easy.

Refinancing an auto loan can be a better loan choice over taking out a small personal loan if you need money.

Self Employed Loan Application For Auto Refinance, Car Purchase or Auto Leasing >>>

Auto refinance loans are a convenient way to consolidate debt or:

  • get money for home improvements.
  • Pay for weddings or vacations.
  • Get a better APR on present loan.
  • Start or upgrade your business.
  • Pay for attorney and court fees.

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Auto Financing For Self Employed 1099

If you are self-employed, you will need to provide your 1099 tax returns for the past few years

Besides your 1099 forms, your tax returns must show that your income is enough to carry the car note and that the income is steady over time.

If you own your own business, you likely write off many of your expenses as deductions to reduce your taxable income. This practice keeps money in your pocket at tax time, but may make obtaining a “self employed car loan” a bit more challenging.

With a credit check inquiry, the lender could see that your credit worthiness is low due to low recorded income. This is why it is important to report a correct income amount on your taxes to keep a strong credit rating.

Emergencies can also arise where you may need a secured loan to purchase unexpected needs. An auto accident that has left your car totaled could put you in a situation where you did not prepare to qualify for an auto loan, but now it is necessary. Car buyers having a good credit rating with acceptable credit scores will depend on good income records from your self employed business.

Self employed bad credit loans are harder to get because you have to show steady income for several years. When you complete the loan application for a car loan for self employed, you will show your net income. Keep in mind that the salary you pay yourself is generally what will qualify you or disqualify you for the loan.

Self Employed Bad Credit Loans

 Lenders who specialize in loans to those with subprime credit require documented evidence of income.

Income must be documented on professionally prepared and filed tax returns for the past two years. Additionally, your 1099 forms verify that your income has a documented source, another requirement for obtaining a bad credit loan, along with any child support that you might receive.

In other words, even if you make $100 K “off the books,” this income will not help you when you apply for self employed auto loans. If this income is not reported correctly, there will be no evidence that you make that much income. Then again, if you have that kind of revenue, you could probably pay cash for your car.

Minimum Income For Self Employed Car Loans

Lenders who specialize in self employed bad credit loans require that borrowers can prove that they make the minimum income specification set forth by the lending company. This minimum income limit varies by lender and borrower because the limit is calculated as a ratio, specifically a debt-to-income ratio.

If you make $100 K per year, but your bills account for $99 K, your debt-to-income ratio is very high, and you will not meet the minimum income requirements. However, if you make $ 25 K per year, and your bills account for only $2 K, you will likely qualify!

You must be able to prove that you have an income that is at least in the defined range.

As a rule, lenders who provide self employed loans to those with poor credit have documented minimum income requirement for borrowers. This minimum limit usually ranges between $1,500 and $1,800 per month. You must be able to prove that you have an income at least in the defined range, whether you are self employed, or are a W2 employee.

However, even if your income falls within this range, you will still need to prove to the lender that your debt-to-income ratio is within an acceptable range.

Even self employed people with outstanding FICO scores can run into problems when they apply for loans for self employed status. If their debt-to-income ratio is out of balance or if they have incurred several debts, qualifying for an auto loan can be a little more difficult at most places.

Applying For a Self Employed Auto Loan

When you get ready to apply for a car loan for self employed, gather the documentation you will need for the application. If you are self employed, get your tax returns from the past two years, along with any 1099s you have.

  • What you will need and how it works.

You can use the (Get Approved) button at the top of this page to apply. We will review your application with our pool of lenders to find the best auto loan lender for your car loan. Then when we match you to the lender that best fits your needs, and you will be contacted by them, and they will need this additional information.

You will also need the following documents:

Proof of Your Residence

A self employed person must provide proof that you live at your stated address with a phone bill or utility bill. Note that you cannot use a past-due bill or disconnection notice for this purpose. Your loan application should have your current address listed for an account in good standing. Some lenders will allow you to prove your residence in other ways. For example, if you own your home, property tax documents will suffice.

Phone Contact Information

Even if you do not use your home phone bill to prove your residency, you will probably be asked to include your phone bill in the required documentation. The lender wants to be sure that he can get a hold of you regarding the loan.

Mortgage Documents / Lease

The lender will want to see your home loan documents if you own your home, or a copy of your lease if you rent. The lender will need your landlord’s contact information, too. The lender will want to know that you have a relatively stable living quarters and that you can pay back the loan.

Self Employed Auto Loan References

Most lenders who write loans for those with less than perfect credit will require some personal references. Most will need eight to ten personal, professional and business references. Note that if you default on the loan, your references will likely be contacted by the lender, so you might want to consider the possibility when providing your list. For example, you might not want to include clients, bosses or business contacts.

Car Loan for Self Employed Business

Note that lenders who deal with bad credit loans will not finance commercial vehicles. This does not mean that you cannot use your car for business use, however. You cannot use bad credit loans to purchase a car solely used for commercial purposes, such as a semi or a refrigerated delivery van. You may  have to use personal loans for business purposes to get financing for business vehicles.


If you are self employed, but you cannot produce the necessary documentation to secure a self employed auto loan, you can still get a vehicle. However, you may need to resort to one of the in house car financing lots. You have probably seen car lots around your town that offer Buy Here Pay Here financing. These lots often advertise that “Anyone Can Get a Car. No One Is Turned Down,” “Your Job Is Your Credit,” or similar statements. Though it is true that these lots sell cars to those with few options, you will get a better deal by proofing your credit worthiness and securing an auto loan with a lender who specializes in subprime loans for self employed with bad credit.

Self Employed Auto Loan With Valley Auto Loans

At Valley Auto Loans, we understand the need of those with troubled credit history to repair their credit and get a good auto loan. We also understand the need for a self employed auto loan. Before settling for an older car from an in-house financing lot, complete the Valley Auto Loans application online. We will match you with a lender who understands your self-employed car loan. Apply today and qualify for financing with a self employed auto loan from Valley Auto Loans.

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