If you rig the amount of money you earn or anything else to do with your job on a car loan application, it could cause problems. Auto loans are tough documents, so it’s always a good idea to be honest when you need financing.
Lying about an auto loan application
Lying on an auto loan application is considered fraudulent, so it’s not a good idea at all. There are three main possible outcomes if you do this:
- Denial – The lender understands and denies you auto financing, which is likely since lenders almost always verify employment and income with documents.
- Future problems – If you somehow manage to get approval for a loan that does not match your actual income or professional situation, it could lead to default in the future if it exceeds your real budget.
- False pretext – The biggest risk you pose by lying on a loan application is being charged with false pretense, and if you are found guilty it could mean jail time if the lender sues you.
In the best-case scenario, you are denied funding; in the worst case, you are accused of lying.
And, if you manage to sneak in and get approved and take out a car loan that’s too high for your income, it could mean default and repossession. these results can cause significant damage to your credit reports and score, and can make it difficult to approve a car loan in the future, even if you apply to bad credit car lenders.
How lenders can see the truth
Lenders – bad credit and traditional – almost always verify employment and income before approving borrowers for auto loans. This is usually done by requiring you to provide either computer-generated check stubs or two to three years of tax returns. Most auto lenders look at your monthly gross income, which is your income before taxes.
Additionally, lenders who help borrowers with credit problems (subprime lenders) also review your employment history. Since borrowers with bad credit could potentially pose more risk, they tend to scrutinize your income and employment with a fine tooth comb to see if your situation is stable enough to handle the auto loan.
Most subprime lenders require a consistent three-year work history and require that you have worked with your current employer for about a year. An auto lender may even ask you to bring a job verification form completed by your current employer, which usually shows your date of hire and current employment status.
Be honest about your income
If you are considering lying about an auto loan application, we do not recommend that you process it. Lenders ask you about your income and work history as they make sure you can handle the loan amount you are applying for.
Believe it or not, lenders want their borrowers to be successful in vehicle financing. When you take out new credit, you can manage it comfortably, it also means less stress for the lender.
By being honest about how much money you are making each month, a lender can more easily determine what you can realistically afford. If you’re looking to take out a car loan that can stretch your budget to the max, consider a down payment.
Down payments reduce the amount you need to finance, decrease your car payment, and can expand your vehicle options. As a bonus, down payments can increase your chances of getting approved because you’re good at it. Cash tells a lender you’re ready to invest in your own success, and borrowers who have down payments have a rate. higher car loan success rate.
Shop according to your budget and credit score
Typically, bad credit auto lenders require their borrowers to have a minimum gross monthly income of around $ 1,500 to $ 2,500. This income requirement must generally be satisfied with a single source. And if your income does not meet this common threshold, having a co-borrower add their income to yours may be the solution.
Or, if you need a job or extra cash, check out our resources page to see what our partners can offer you.
If a lower credit score is the real issue in getting the car loan you need, then we want to help. TO Auto Express Credit, we have created a nationwide network of dealers who are registered with subprime lenders. These lenders specialize in helping borrowers with credit problems, and we want to put you in touch with a dealer who has registered with them.
Fill out our free auto loan application form and we’ll immediately get to work finding a dealership in your area with bad credit loan resources.
