Car Loans with Bad Credit for the Self-Employed

Being self-employed certainly has its perks, but you also need to be mindful of your own financial situation. When you are looking into purchasing a vehicle, what do you need to know about car loans with bad credit for the self-employed?

Your Down Payment

Now, as you probably know, it's generally recommended that you save up a down payment when you're going to be taking out a loan for a car. You might be tempted to empty out your savings account to do so. This is a bad idea for a number of reasons. Auto loans with bad credit for the self-employed should not leave you broke. Furthermore, you need to save that money to pay for your self-employment tax too.

Proof of Income

Be sure that you are saving all of your proofs of income! Dealerships and lenders generally need to see how much money you are making in order to be able to approve you for a loan. In the event that you have been self-employed for awhile, you probably have proof from the past tax seasons. For those who have just started out this year, it's important to keep whatever information you can to help make your case.

The Bad Credit Situation

Let's move on to the other part of the equation here. Bad credit makes it hard enough to obtain a car loan, and this can be even more problematic when you're having trouble showing proof of your income. However, lenders are available who are trained to work with your specific issues, and they can help you find a plan that is the best for you and your financial circumstances. Bad credit might prevent you from being able to get a car at certain places, but this is simply not true of everywhere.

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Paying Attention to the Interest Rate

When you go to obtain a loan for the car, your credit score is one of the factors that contribute to the interest there. Therefore, you need to realize that your interest rates could be higher due to your credit score.

For self-employed individuals with bad credit, keep these notes in mind when you are looking to obtain a loan:

• The amount of down payment
• Proof of your income
• How credit will affect the situation

Once you have sorted out these issues, you will hopefully have a lovely car in which to drive.