For each car loan, you must meet certain conditions, such as having the income to pay for the vehicle. For a car loan with bad credit, there are residency requirements as well. We cover the common stipulations of subprime lenders regarding your life situation.
Bad credit auto loans and residence
Bad credit auto lenders look at more than just your credit score, and one thing they check is your residence history and stability. All other things being equal, the longer you have lived in the same area, the better your chances of getting approved for a car loan.
Subprime lenders who are registered with special finance dealers generally require that you have lived in your current residence for at least a year. If you haven’t lived there for that long, then living in the same area for at least three years can be accepted. It depends on the lender you are working with and their specific requirements, but the more stability you can show the better.
When it comes to bad credit auto loans, subprime lenders are looking for your ability, stability, and willingness to pay for a vehicle. Capacity refers to your income; stability means your work history and your life situation; and willingness to pay refers to your down payment. For all of these things, subprime lenders need documents proving that you are ready to take out a car loan.
Proving your residence
Prove that your residence is done by submitting a document in your name with the correct address. Your driver’s license must also have your current address.
You can usually use a gas, electric or water bill to prove your residence – and it should be in your name. Bank statements in your name can also do the trick.
However, if you have a PO Box or Rural Route Box listed as your address, it will not be accepted by a subprime lender.
Different life situations
There are many types of life situations people could find themselves in – everyone’s life is different. Despite this, many subprime lenders require that you have some sort of stability of residence in order to consider yourself for funding. If you are a homeowner or renter, you may have a better chance of qualifying for a bad credit car loan.
- Owner – Someone who owns a house, condo, townhouse, stick residence or prefabricated house (and the land on which it is located).
- Tenant – Does not own a house. A borrower who lives in a manufactured home who rents the land they are on is considered a tenant. A military borrower who is on a base is generally considered a tenant.
There are life situations where your residence may not be accepted. Every lender is different, but, in general, temporary facilities are not acceptable as a residence for a bad credit car loan approval. For example:
- RV – If you’ve thrown conventional life by the wayside for life on the road, you might not be lucky when it comes to an auto loan. Subprime lenders require that you have a permanent address, so if your RV is not on land you own, you cannot be considered for a car loan.
- Hotels and motels – When you spend 52 weeks a year traveling the country for work, it can be difficult to maintain permanent residence. Many people in this situation use extended stay hotels or motels instead of a residence, but these residences are not acceptable for subprime auto financing.
If your life situation doesn’t exactly match any of the above scenarios, be sure to speak openly to the special CFO about your unique situation.
Go ahead with a car loan
Ready to kick things off and participate in your next car loan? Look no further than Express auto loan. We match bad credit borrowers with dealers who have no charge bad credit loan resources.
Start by filling out our free auto loan application form. After that we will search for a dealership in your area who has registered with bad credit car lenders.