Minimum Employment Duration for Car Loan Approval

The length of time it takes to be considered for an auto loan depends on the lender you work with. However, there are a few general guidelines that most subprime lenders stick to when it comes to approving an auto loan. If you have poor credit, job stability is a key factor in qualifying for a car loan.

Terms of employment for car loans with bad credit

Typically, lenders require a borrower with bad credit to be employed at their current job for at least six months, although a year is preferable. Additionally, lenders must ensure that a potential borrower has at least three years of work experience, with no gaps of more than 30 days between jobs.

If you don’t have the work history a lender is looking for, your chances of getting a car loan are slim. Even with a long work history, if it’s clear that you’re jumping from job to job or only staying employed for short periods of time, you’re not likely to be approved either.

In some cases, if you haven’t been in the job for a long time, but you have a stable employment history and meet all other financing requirements, a lender may consider you. This is rare and depends on the lender you work with and your personal situation.

Your credit score plays a big role in your car loan

When you need a car loan, your credit situation is a strong indicator of the type of lender you should work with. With a credit score in the “good credit” range (generally considered a FICO credit score of 670 or higher), you are likely to qualify for approval for an auto loan through a traditional lender. Chances are there won’t even be a question about your job or income, unless you don’t have a lot of credit experience.

However, people with weaker credit usually have to work with special lenders, and these lenders are not always easy to find. Additionally, working with this type of lender requires you to meet a number of qualifications in order to be considered for financing.

One of the requirements for getting approved for a bad credit car loan is your length of employment. When lenders consider you for an auto loan, they are looking for your ability, stability, and willingness to complete a loan. The length of your employment helps a lender judge whether you have a stable income.

Unique Professional Qualifications

Now that you know the basic employment requirements for a car loan with bad credit, let’s take a look at some unique employment situations and how they might impact your ability to get a car loan:

  • In addition to being employed for at least six months, lenders who work with borrowers with bad credit generally require that all of your qualifying income be from one job. This means that if you have multiple jobs or are a part-time employee in addition to your full-time job, only your main source of income counts towards the employment requirement.
  • If you are not employed year-round, but are employed seasonally every year, you generally need to provide more than your pay stubs as proof of income and employment. This means additional documents such as bank statements and tax returns, usually for at least three years. This is because lenders need to know that you can continue to make loan payments during the off season. If you earn unemployment during this period, it cannot be used as proof of income (or employment).
  • If you work in cash or don’t receive traditional checks, you often need to provide notarized letters of employment from your company. Cases like these, though rare, may not even be considered. In these situations, if a lender cannot verify your employment, you usually need to find another way to obtain financing.

If you are unable to verify your employment with a lender, you may need to seek a loan from a buy here pay here dealer who does not place as much emphasis on your employment.