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A Full Deck: What Income Can You Bring To The Table?

Posted on Sep 22, 2011 by Thalia Green
Sep 22

Calculate income for car loansRegardless of your credit status, most lenders will want you to show proof of income. There are many ways to show a lender that you have the means to pay for a car loan. Here are some options that you can consider.

 

Employment
Employment is most commonly they way that people show that they they have the means to pay for a car loan. To show proof of employment income, most people bring a few of their paystubs. However, if you are an independent contractor or self-employed, there are other ways that you can show proof of income. Bank statements showing proof of direct deposit, or tax returns showing reported income from all customers are also acceptable to show proof of income. Don't forget that if you are currently holding two jobs, you can also use the income from your second job to qualify for your loan.

 

Alimony
If you are receiving alimony from a divorce settlement, this too can be shown as proof of income. Like employment, alimony earnings can be shown through bank statements, cancelled checks, or tax returns.

 

Settlements, Inheritance, Lottery Winnings
In some cases, people are receiving regular payouts of a large amount of money. This could be the case if you have inherited money, but also if you are receiving payments from a large lawsuit settlement, or monthly payments on lottery winnings. In all three cases bank statements and cancelled checks can be used as proof of income. You may also have to show additional paperwork regarding the payment arrangement as proof that the income from this source will be steady through the term of the loan.

 

Rental Income
If you are making money off of a rental property, rental income can also be used as income. You'll need to show proof that you own the property, in addition to your bank statements and cancelled checks from the renters.

 

In most cases employment is the primary source of income, but don't forget that other sources of income can be counted towards your loan application as well. By presenting all your cards on the table, you may find that you are able to qualify for a larger loan, or a more favorable interest rate. Each lender will have their own regulations as to what income sources are permitted. If you have sources of income other than your job, be sure to inquire with your lender as to whether your other income sources can be applied to your car loan. 

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