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Can I Get a Car Loan Without Pay Stubs?

Lenders want to see that you have the ability to repay a car loan, so they want to see some type of proof of income. This does not always have to be a traditional pay stub, though. Lenders will consider other documents for freelancers, contractors, and other self-employed persons.

Tax Returns as Proof of Income

The actual requirements for getting a car loan without a traditional pay stub will vary from lender to lender, but your past tax returns are the most commonly accepted alternative proof of income. Many lenders may want to see that you have had a stable income for the previous three years before considering a loan. Some lenders may consider your bank records, others could want to see that you have had previous loans. For this reason, if you are a server or bartender who earns a lot of income from tips, it is important to report this on your taxes. You will have to pay more to the IRS, but it will give auto lenders and other creditors an accurate reflection of your finances. Typically, auto lenders require you to be able to demonstrate a gross monthly income of $1400-$1800 per month. If you can show this much on your tax returns, then you should be in good shape for approval, although the amount you are approved to borrow may be less than expected if a large portion of your income has gone underreported on your taxes.

Improving Your Odds of Approval

You can improve your chances of being approved for the car loan that you want by checking your credit report for errors and forgotten delinquent accounts. Addressing both of these issues will improve your credit score. Additionally, you can offer a substantial down payment. This will prove that you are vested in the vehicle and have the means to repay the loan. A down payment of 20% is a strong indicator to lenders that you are serious about this purchase.

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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