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Do I Need Pay Stubs for a Car Loan?

Auto lenders of all types require proof of income, typically in the form of pay stubs or payslips. While it is possible to get a car loan without paystubs, you will need to provide some type of income verification.There are various ways to do this, depending on your employment status.

W2 Employee

Usually, someone without paystubs can qualify for a car loan by providing the auto finance service provider a copy of his W2 or a letter of employment from his employer verifying his or her income. Most lenders want to see a minimum of $1500 gross monthly income for both salaried and wage workers. If you earn less than this, you may need to find someone to co-sign the loan, or save up to purchase a vehicle with cash.

Contract / Self-Employed Worker

If you are contract worker or have your own business, you probably don’t have payslips or stubs. However, there are other ways to provide proof of income. The most common is a copy of your tax returns for the previous years. Some lenders may want to view up to three years of history. If you don’t already have copies of these in your records, you accountant should be able to provide them. Also, if you used a software like TurboTax, they are easily available for printing. Check with your lender/dealer for details of what information they need. When it comes to car loans for self-employed folks, such requirements vary from lender to lender.

No Income Documentation, Period?

Now, if you cannot even come up with any of these documents, you will need to find a cosigner with a strong credit history. The right cosigner can help just about anyone get a car loan when the time comes.

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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