Proof of Income

Proof of income is a requirement of most subprime lenders. It is proof, in the form of a computer-generated pay stub and/or a prior year W-2 form, of the stated income on a credit application. The pay stub must show year-to-date income, gross pay and net pay. From a weekly or bi-weekly pay stub, gross monthly income and net monthly income can also be determined as well as gross yearly income and net yearly income. Unlike many conventional lenders, subprime (bad credit) lenders require a borrower to furnish proof of income in order to determine safe and affordable debt to income and payment to income ratios. This enables these lenders to determine the amount of money a buyer can reasonably set aside for a car payment every month.