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I know that when you have average to low credit, many if not all banks will require, at least, $1500 a month salary. I believe this is gross salary. Would they require the same if you have good credit?
For example, if you have good credit and finance a 20k car, would they need proof of income?
I know a friend who has good credit and makes less than $1500 a month, only works part time, yet he is financing a 20k car.
When I bought a car in March, I'm pretty sure they never verified my income. They never asked for a pay stub or W2, and at the hour I bought my car, my company would've been closed if they wanted to call to verify my employment. My credit score came back as 778 so I got the lowest rate and was out the door quickly with my new car.
Sounds like another housing loan fiasco that will require taxpayer money to clean up when the loans go bad. It is gross negligence on the part of the lender if income and employment are not verified.
Sounds like another housing loan fiasco that will require taxpayer money to clean up when the loans go bad. It is gross negligence on the part of the lender if income and employment are not verified.
No. There aren't any huge government auto lenders. The only reason private market housing loans lead to a government bailout was because of the huge portfolios of GSE (fannie/freddie) and agency (FHA/VA) loans that were put at risk when home values collapsed. Likewise, there's very little chance used car values are going to collapse at the rate or volume that home prices did. High risk car loans are already factored in to the overall lending model.
To OP's question though, auto lenders don't usually verify income. They will however if the loan significantly increases credit utilization. IE: if someone has an 800 credit score based on $150/mo of DTI utilization and they try to take out a $300/mo car loan, they're going to see that as a huge increase in credit utilization and determine whether the borrower has capacity to repay.
They don't verify income. They use 3 different credit scores to make the loan go through. Hope your friend is not a dummy to overextend himself...he sounds like a 30k millionaire
I bought a car back in May. They never asked for proof of income or employment. I did have to list my employer and income on the application. To my knowledge they never contacted my employer, and it was a Saturday when I signed all the paperwork so HR wouldn't have been available anyways.
In my experience, they ask for your annual income on their lending form, but if your credit score is good, that's all they need. It may be different if you're not putting any money down, but I've always put down about 50% or more when I have a loan.
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