What can be used to show proof of income?
In order to get a good deal on auto loans, you need to prove to the lender that you are worth the investment and are capable of making timely payments. You can have several means of showing that you have a strong and consistent source of income that will help you return the debt.
Typically, in order to get a better deal, you need to have excellent credit because lenders are more likely to believe the debt will be repaid. The type of documentation that you are supposed to provide depends upon the source of income. However, at 500 Below Cars we offer in-house financing and go off your stability rather than your credit.
How to show proof of income
Showing your income as an employee
If you are a W-2 employee, the most common type of employment in the United States, the employer withholds different taxes from the paychecks (social security, income, Medicare, etc.). As an employee, you typically receive a paycheck from the employer on a monthly or weekly basis.
These checks would usually be coming with paystub listing your withholdings and income for the current period of pay. Most lenders would ask for your recent month check stubs. However, the exact number can vary depending on the lender.
Showing income as a self-employed individual
If you are self-employed, then you don’t need to get a W-2 form for tax purposes. As an independent contractor, you might be receiving income from different sources. For each income source, you need to get a 1099 form.
If you have a business of your own, i.e., working for yourself, you don’t need any of these forms. Since you are not a regular income taxpayer like a W-2 employee, you would be asked to pay taxes on a quarterly basis.
For such borrowers, lenders usually ask for the tax returns for the last 2-3 years. Based on these returns, your net income is estimated, and after making the necessary deductions evaluate you qualify for the loan or not.
Proof of alternate income
Having more than once a source of income can make the loan acquiring process easier for you and will ensure you get the best deal possible including best interest rates and more car choices.
If you are unemployed, you can always check out our article on how to get a car loan with no job? Or you can show proof of some of the non-taxable incomes at your disposal such as:
- Social Security Disability
- Social Security
- Child Support
These are some of the non-taxable incomes that come along with the regular income, generally every month. These sources of income can influence the loan decision to be in your favor giving the assurance that you are capable of making timely payments.
If you are suffering from some form of disability, then we have an article for you that shows how you can buy a car on disability.
Types of income sources need to be considered
As we have already established that you don’t have regular PAYG sources of income, but what most people fail to realize is that there are other sources of income that are viable and can help them get a car loan.
It’s time for you to start thinking outside the box and identify means to show proof of alternate income.
You might be a freelancer working from home, which can also count as a viable income. Make a record of your freelance income by showing your bank statements, incoming transactions, and eBay invoices.
You can also have a rental income or making a room available for rent at your property, also called automatic income. Any regular source of income you have can increase your chances of getting a loan.
How can we help?
If you are paid in cash, we can accept the bank statements of your last three months rather than asking for paystubs to make things simple and easy for you. All of our clients who get paid in cash need to bring some form of proof to show the money transaction, either a debit card or bank statement. This will allow us to get a better read on disposable income. We can also help you if you want to buy a car with bad credit.
Here is how you get approved for an auto loan at 500 Below Cars
We ask our customers to bring the following in order to get approved for a car loan at 500 Below Cars
First and foremost, we understand that each person’s situation is different, and therefore, we ask them to bring some additional documents that can help make a strong case for them, offering them the best possible offer. At a minimum, we recommend all our clients to bring these documents to our dealership.
- State ID, driver’s license or passport
- Automobile insurance proof (if you don’t have auto insurance, we can help!)
- Residence proof like your utility bills etc. (If you don’t have these proofs, we can help you)
- TIN or your Social Security Number
- Five complete references (including three relatives at least)
- Employment verification or income proof like bank statement or paycheck (if you are having trouble arranging these documents feel free to contact us, we will help you)
So, if you want a sweet deal on your car dealership, then 500 Below Cars are just a call away. We make sure, no matter what your financial status may be, you deserve to have a car of your own. Schedule an appointment with us today!