Basic Qualifications for Bad Credit Auto Financing After Bankruptcy
“Can I meet the requirements for Bad Credit Auto Financing After Bankruptcy if….” There are so many potential scenarios it would be impractical to list them all here so I will address some of the most important ones.I know of over 100 sub prime lenders, each has somewhere around 5 lending programs. That’s over 500 programs overall so there should be a program for almost every credit situation. The biggest factors lenders take into consideration when you apply for Bad Credit Auto Financing After Bankruptcy, are:How much are you making at you JobAll auto loan programs have widely different income requirements by the lender. Most lenders, however, would like around $2,000 per month gross income (that’s before taxes). There are a lot of lending programs that have lower income requirements.How Long On the JobMany auto loan lenders want to see at least one year on the job. If you haven’t been on the job for a year most lenders like to see at least three years of nonstop employment with no more then 3 employers during that 36 month time period.Your Credit ScoreJust about every lending program takes into account your credit from the big3 credit bureaus; the higher you can get your score the better. Also most lenders that include the big3’s scores in their approval procedure typically have a cut off score at roughly 525. If you have real poor credit, less than 525, there are still possibilities to get approved for Bad Credit Auto Financing After Bankruptcy with a lender that does not use the credit bureau score in their formula. You will just have to find one, there out there and do this everyday.How Long On the JobMany auto loan lenders want to see at least one year on the job. If you haven’t been on the job for a year most lenders like to see at least three years of nonstop employment with no more then 3 employers during that 36 month time period.How much are you making at you JobAll auto loan programs have widely different income requirements by the lender. Most lenders, however, would like around $2,000 per month gross income (that’s before taxes). There are a lot of lending programs that have lower income requirements.Your Debt Ratio (DTI) To determine your debt ratio add up all your bills, don’t forget your new car payment, and divide it by your total gross income (before taxes). Most lending programs prefer you have no more then 45 percent DTI ratio.Now Your Car Payment to Income Ration (PTI)To calculate the payment to income ratio divide your new car payment by your gross income. Most lenders prefer a maximum PTI ration below 20 percent.Loan to Value (LTV)To calculate the LTV, divide the amount you would like to finance for your bad credit auto financing loan by the wholesale book value of the vehicle. If you live on the west side of the country use Kelley Blue Book, if you live in the central or eastern part of the country use NADA. Most lenders like to see a LTV under 120 percent. Some will allow a higher LTV amount if you opt to finance a service contract or GAP insurance.Down PaymentMost Bad Credit Auto Financing, After Bankruptcy lenders require some sort of down payment, but If you can’t come up with money for a down payment and have no other car to trade in there are a select handful of programs available.Not all lenders are created equal. Don’t worry If you can’t meet all the criteria above because there is still a good chance that you would qualify for several lending programs.
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