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How to Apply for a Car Loan When You Are Self-Employed or a Contract Worker

The Covid-19 pandemic affected economies in different ways. Many people are now self-employed, with a good number earning through freelancing. Yet another group depends on others to pay them and are generally termed as contract workers. The self-employed and contract workers face the same challenge; securing a car loan. 

While people on traditional employment may secure the loan smoothly, the self-employed and the contract workers may find it a bit rough. However, rest assured that you can get a car loan, provided you meet lenders’ requirements. 

Here is all you need to know about applying for a loan when you are self-employed or a contract worker.

Why do the self-employed and contract workers find it rough when applying for a car loan?

In reviewing your car loan application for possible approval, the bank and other potential lenders usually want to see proof of steady income to ensure that you can repay the loan. Of course, that’s a non-problem for anyone on a paycheck, and sometimes, those on W-2 arrangement. However, having proof of steady income may be hard if you are self-employed, freelancing, or a contract worker. 

The good news, though, is that there are provisions that cater to self-employed people, and the lenders will bank on these to verify your creditworthiness. For instance, most lenders will request the borrower to present proof of self-employed tax returns for the last two years, and having it may help you stand a chance of getting the auto loan.

Moreover, claiming too many deductions may lower your creditworthiness, which you will only realize when requesting a car loan. Of course, as a self-employed fellow, you might want to claim deductions to lower your tax burden. However, the consequences will be crystal clear when you need a can and are asking for financing. 

While claiming deductions isn’t a problem, it leaves the lenders wondering whether you can really repay a loan if you already seek too many conclusions. Therefore, if you are planning to seek car financing in the future, consider reducing your claimed deductions.

Additionally, having a bad credit score lowers your chances of getting an auto loan, especially when you are self-employed or a contract worker. A poor score means that you have had issues repaying loans in the past. Thus, making your potential lenders doubt whether you will be able to repay the dealership loan. The good news is that you can start boosting your credit score now if you want to get a car loan in the future.

Getting a loan with subprime lenders

If you are self-employed and have a bad credit score, the only option left is seeking a car loan. Trying subprime lenders specializing in financing below-average borrowers. Typically, these lenders operate differently from traditional lenders. 

For example, instead of focusing on your credit score and history, they will prioritize your income to vet whether you qualify for the dealership loan. 

Here are three requirements you must meet to get a car loan with subprime lenders;

  1. Minimum income amount. Traditional lenders have varied income requirements for their borrowers. However, subprime lenders are strict and require you to have between $1,500 and $2,000 monthly income before taxes, which has to be from one source. 
  2. Payment to income amount. This is established by dividing the auto payment by the pre-tax income. Generally, the ratio should not exceed 15% to 20%, and in case it does, you will not qualify for the loan.
  3. Debt-to-income ratio. This is calculated by finding the quotient of your monthly bills and the pre-tax income. The balance should not exceed 45% to 50%, and if it does, you will not be eligible for the loan.

How can a contract worker or a self-employed person prove income?

Calculating the ratios above is one thing, and proving your income is another. Therefore, before starting the car purchasing process, have the proof(s) of income ready. 

Here is what a self-employed person needs to prepare a proof of income;

  1. Play right with tax deductions. The unemployed and self-employed can benefit from tax deductions and leverage the burden. However, besides reducing your income, the deductions lower your debt-to-income ratio. Therefore, go slow on the assumptions.
  2. Have copies of filed tax returns ready. Even if you don’t have a steady income, you can prove income by filing tax returns. The lenders will request copies of proof of filed returns, at least for the last two years.

General hacks for the self-employed and contract workers for getting a car loan

Having discussed enough what matters when applying for an auto loan, here are the tricks for paving a smooth path the self-employed and contract workers can use to increase their chances of getting a car loan;

  1. Work longer. Whatever you are doing, allow enough time to pass and accumulate some money before applying for a car loan. This verifies your dependability and security, and more lenders will be willing to stand a chance with you.
  2. Play safe with a reasonable down payment. When you are self-employed and need a car, you will need to pay OK upfront. For instance, people with high credit scores and steady income might need to pay only 10% or 20% of the loan as a down payment. Still, the self-employed will have to beat that margin to qualify for an auto loan.
  3. Boost your credit score. If you have been defaulting and have not been regular in repaying your credits, start working things right. Although it might take time before you are where you want, it is worth every effort.
  4. Go slow on the deductions. Don’t just look at deductions as a way to leverage tax burden, but remember that they affect your critical ratios and reduce them.

The bottom line

Although the self-employed and contract workers can find it tough to qualify for a car loan, they are not a lost course and can be eligible for it. All one needs to do is put a few things in the proper perspective, eventually qualifying for the loan. This article is your informant, and by following its suggestions, you will be eligible for car financing despite being self-employed.

Rose Rosie is a writer for the personal finance website, Joy Wallet, which provides readers with useful information, resources, and tools to help maximize their financial fitness. 

What is an Audiobook?

Whether you’re a teacher who is preparing a classroom for students or you’re just browsing through book selections online to read yourself, when you go to purchase the titles you’ve decided on, you may have noticed a few different options in regard to the type of books you can order. Audiobook is likely one of those options. What is an audiobook? How do you use them? Read on to find the answers to these questions and more so that you can decide whether or not you would like to invest in audiobooks. 

Audiobooks Explained

Audiobooks are pretty much what they sound like: voice recordings of someone reading the text of a book. Rather than reading the text, you would listen to the audio recording. Audiobooks can either be exact, word-for-word readings of the text, or they can be abridged (shortened) versions. 

Typically, audiobooks are purchased and downloaded online; the same way that you would purchase and listen to digital music. You can also purchase audiobooks from online sellers, such as Amazon or Barnes and Noble. There are several public domain sites that offer audiobooks, too, that allow you to download and listen to the recordings for free. Most public libraries offer audiobooks online that you can browse, download, and listen to; all you need is a library card to do so. Even sites like Spotify feature audiobook sections. (It’s such a lucrative business that many authors find it great to make audiobooks for their books.)

How to Listen to Audiobooks

Audiobooks are digital audio files and they can be played on a large array of electronic devices, such as a smartphone, a tablet, or a laptop, a personal computer, or any other device that can stream audio files. Audiobooks are available in several audio formats, too, including MP3, Advanced Audio Coding (AAC), and Windows Media Audio (WMA). The vast majority of media devices are capable of playing any of these types of files. 

There are also several websites and apps available where you can access free and paid for audiobooks, some of the most popular of which include: 

  • Audible. Audible allows users to purchase audiobooks on an individual basis. There’s a monthly subscription service, too, which offers one free audiobook per month. The Audible app is available for Android and iOS devices. 
  • Apple Books. iOS and macOS users can browse, download, and listen to audiobooks with Apple Books. The app is available on the Apple store. 
  • Downpour. This commercial audiobook site is similar to Audible. You can purchase and download audiobooks individual, or you can sign up for their monthly subscription, which provides access to downloads on a monthly basis. 
  • AllYouCanBooks. This website provides users with unlimited access to dozens of downloadable audiobooks. It’s a commercial site, meaning that you have to pay for the files; however, the first month is free of charge. 
  • Project Gutenberg. This website is popularized for offering a wide selection of free public domain audiobooks.
  • Nook Audibooks. Nook is Barnes and Noble’s audiobook site that offers a large selection of audiobooks for sale. 
  • OverDrive. OverDrive is another app that provides users with access to thousands of audiobooks, which are made available from more than 30,000 local libraries. 

Reasons to Listen to Audiobooks

Now that you have an idea of what audiobooks are and where you can find them, you might be wondering why you might use them instead of or in addition to traditional print books or eBooks. Here’s a look at just some of the benefits of using audiobooks. 

  • Time savings
  • Can listen anywhere
  • Enhanced retention for auditory learners
  • Ease of use
  • Serves as interpretive reading models
  • Acts as a read-aloud model
  • Improved listening skills
  • Introduces genres of literature that you may not consider otherwise

How to Write a Book (Tips)

There may come a time when a writer will want to write a book, but do not know where to begin. A writer may think that they can just write a book and send it to a literary agent, but it does not work that way. There are steps that you must take when it comes to writing a book. Here are some tips for writers who want to write a book, so that they will be successful when it’s time to send out query letters to literary agents.

One tip is that you must have an idea on what you want to write about. Sometimes writers already know what they want to write about, while others don’t. Sit and think about what is important, such as asking yourself questions like, what kind of characters I want to talk about will the idea I’m thinking about make sense. This may take some time if you do not know the answers to these questions. You can get ideas from books that you have read in the past, such as romance novels. Do you want your book to have a romantic or horror theme, for example?

A writer needs to know what genre he or she wants to write, such as a memoir or comedy, for example. Some ways you can find if your idea will work is by researching. Go to your public library and find out if what you want to write about is like what is already out there. Another place is going to Kindle books to find out what is selling. In both cases look for bestsellers. You may want to read books on the genre that is of interest in to get an idea on if your idea will make sense to put out there in the public.

Another tip is to make an outline of what you want to write about. You cannot just start writing your book because you may miss important details. When you make an outline, your outline needs to have a beginning, middle, and end. You want it to make sense as well. You want to know what your scene will look like. Picture in your mind what your scene looks like. This is easier for you. The middle will have all the important details of what you want the reader to know, including your characters. What kind of personality do you want your characters to have? Who is the main character? What kind of story will it be, adventure, horror, or romance, just to name a few? What do you want to happen in the story? There are questions you have to ask yourself to make a good book.

Begin writing your first chapter. You will want to make it where it will catch the reader’s attention. This will have the scene, theme, and characters. You can get some ideas from other books you have read. It has to have a strong beginning as well. This may take some time, but you want to make it strong. The best writers took their time to make that first chapter stand out. Read books that are in the same genre as yours. You want your first chapter to make sense. For instance, you would not want to make your first chapter sound funny, if your genre is horror. Talk about the characters. What makes them important? In fact, the first chapter has to have something exciting, such as the opening of what to expect from the next chapters.

Another tip is to not worry about using big words. You want your reader to read without stopping. The reader shouldn’t stop to look in the dictionary for meaning of words. Use words that you know the reader will understand, but at the same time make it interesting. For instance, most people know what apprehensive means. It means being nervous or afraid.

Are you looking for great literary agents?

Authors can find it difficult to get their book out there in the book world without a literary agent, unless they choose to self-publish. Authors don’t want to waste all of that time writing a book, which probably took months and maybe years to complete without anyone reading it. That’s where literary agents come into play. Literary agents are writers’ best friends. They will get your book out there to the right people, such as publishing houses and even producers of a movie. When you are looking for literary agents, it is important to do your homework. For one, authors need to make sure that their book is up to par, meaning it is what the literary agent is looking for.

Literary agents want to see books that are going to sell and are on the topic that they handle, such as if an author’s book is about zombies, he or she will want to look for a literary agent who is in the horror genre. An author wouldn’t want to pitch their book to a literary agent who handles romance novels. On the other hand if the book has romance theme to it, the author can pitch it to literary agent who handles romance themes.

Finding the right literary agent is important because you do not want a literary agent who has had poor sales in the past. Research each literary agent that you are interested in. It is important to see how many sales that literary agent has had in the past and if he or she is presently working with authors. It is a good idea to research literary agents who handle your genre and tone. Authors need to find out if their book is similar to other books that literary agents have handled in the past. It will be more than likely that the author will have luck in finding a literary agent. Authors need to make sure as well that their book is targeting the right audience.

After completing your research and you have a list of all the literary agents that fit the profile, you will need to do extra research and make sure that you are finding the right literary agents. This process takes a lot of time and patience is key, but if you want your book to sell, you have to make sure you have the perfect literary agent. Authors need to find out if each literary agent that they are researching accepts queries. Sometimes literary agents don’t accept them at a particular time. Even if you have your eye on a particular literary agent and he or she is not accepting queries, you have the choice to wait until he or she does accept queries or cross him or her off the list.

Begin writing your query letters to literary agents. Authors want to make sure that their query letters are perfect. As an author, he or she wants to make sure that the literary agent will promote the book. There is no rush when it comes to writing your query letter. Jot down things that you want to include in your query letter, such as why you think this book is better than the rest. The Internet has a world of resources on how to write a query letter, but if it still confuses you, you can always seek help from a freelancer. Now, you have to find a freelancer that has an A plus review of producing query letters. When authors begin sending out query letters, they have to make sure that each one has its own personal touch.

Why ‘When in Doubt, Cut it Out!’ Should Be the Motto All Creative Writers Embrace

“It is easy,” Michelangelo famously said about his creative process. “You just chip away the stone that doesn’t look like David.” 

Creative writing is absolutely nothing like sculpting. You start with a blank slate. As you fill that void, fueled by hours of creative flow punctuated by periods of writer’s block, it’s only normal to begin to feel at home in the world you have just conjured. It’s only normal to ache to keep building it, and to feel like something of a butcher every time you even just consider taking something away. 

Before you know it, your writing — now filled with complex sentences and scenes designed to bring your text to life — becomes cluttered and distracting. That’s why every creative writer can benefit from this sculptor’s advice. “When it doubt, cut it out”. Chip away the words that don’t fit into the story, and then go back to kill the words that don’t add anything. Learn from the minimalists; declutter your writing until every word has found a home and your whole project sparks joy.

Whether you are writing an essay or a novel, you’ll at the very least have the opportunity to tidy your writing up a little. Almost always, you’ll discover that, in the words of Ernest Hemingway, the “omitted part would strengthen the story”. Naturally wordy creative writers should consider adding a separate “backspace edit” to their creative process, but even if you don’t go that far, you may be surprised at the results you get if you are a little more willing to cut things out. 

What should you consider as you decide what to cut out during your self-editing process as a creative writer?

Could you effectively convey the same message in fewer words?

At the basic proofreading level, you can simply ask yourself if you can effectively say the same thing in fewer words by removing repetition and clunky wordy choices — in turn forcing you to think about your sentences more intently. As this is the least painful part of “when it doubt, cut it out”, it’s a good place to start. 

Next, target your adjectives and adverbs

As a creative writer, you’ll use adjectives and adverbs to liven up your story, especially if you’ve taken the advice to show rather than tell to heart. Sometimes, you’ll find that you’ve been overdoing that a bit — so see which flowery words can head for the chopping board. 

Examine your side characters

If you are writing a novel, short story, or play, chances are that not all of the characters included in your work truly deserve a place there. Side characters should serve a purpose — they might act as a foil, a learning opportunity for the protagonist, fill in a gap, or offer a way to provide crucial background information. If any of your characters aimlessly wander in and out of your story, without influencing the plot in any meaningful way, they may have to go.

Finally, put your plot points under the knife

Just as your characters should should seamlessly fit into the story you are telling, the journey your main characters take can get too cluttered if there are too many detours. If it doesn’t contribute to the plot, no matter how hard you worked on a particular section, you may just find that you gain, rather than lose, by simply taking it out. 

Does that sound a little harsh to you? Creative writers who just aren’t ready to start chipping away at their hard work yet, fearing that they’ll end up with a dry and sterile text, can take comfort in the fact that writing is a whole lot more flexible than sculpting. If you need to, copy/paste your work into an entirely new document. Start experimenting with relentless deletions, cutting out everything you are not 100 percent sure about, and see what you end up with. 

You may discover that entirely new scenes now need to be added. You may hate the result and go back to your original. You may also end up with perfectly tidy writing in which every character, every scene, every word have a goal. No matter what, you’ll soon realize you’ve become a better writer after going through this process.

KDP Select Pros & Cons: KDP Select Compared to Traditional Publishing

KDP Select is one of the Big Self Publishing Platforms out there. If you are thinking about self publishing your novel or story, it’s likely that you’ve already heard of KDP Select and other platforms like Reedsy or Lulu.

But why can they be better for your needs than choosing a contract with a traditional publishing house? Platforms like KDP Select offers many benefits for self published writers that traditional publishers simply don’t.

While traditional publishing contracts are fine for thousands of writers and might still remain an aspect of your writing career now, here are some of the benefits of KDP Select compared to what traditional publishers have to offer.

Traditional Publishing is a LOT of Waiting

The process from manuscript to published book can take years when we’re talking about traditional publishing. It can even take decades when we account for all the times where an excellent manuscript might be rejected by several publishing houses in a row.

Some traditional publishers can even take as long as a year before they let you know whether or not they’re willing to publish your manuscript at all. And that’s not including all the time it takes to format, read through, proofread and finally print and promote.

For some writers, the cons of traditional publishing far outweigh what they’re able to get from it.

More writers choose self publishing through platforms like KDP Select because it’s easier, faster and gives them instant access to their market of readers.

Traditional Publishing Sometimes Requires an Agent

An increasing number of publishers – especially larger ones – aren’t willing to consider submissions that have been sent without an agent. This presents a huge problem for many first-time and emerging authors who don’t have an agent yet, and don’t have the background in the industry to just hook up with one overnight.

Self publishing your manuscript through platforms like KDP Select doesn’t require an agent – and you can do it when you’re ready as a writer.

Traditional Publishing Has Set Promotional Schedules

Traditional publishers have set promotional schedules for new books. This means that they will do a huge amount of promotion at the start of the process to boost sales, and then gradually less the longer the book has been on the shelves.

As a traditionally published writer, this means that the sales of your book will decline – and once this happens, you’re usually not getting any help from your publisher to release or promote this book again.

Whoops.

Self publishing through platforms like KDP Select won’t carry this restriction – and won’t limit you as much in terms of how you can promote your work. There’s no need to stick to a larger publisher telling you which books are “good” for promotion right now: You decide, and you showcase the work to your readers that they want to see

Traditional Publishing Pays Eventually… Self Publishing Pays Sooner

Traditional publishers usually issue their royalty statements throughout the year – quarterly being one of the most common. During this time, writers are promised a fraction of the profits for the books that have sold during this period – and once you’ve been paid an advance (assuming you’re paid one at all), this fraction isn’t as much as you would think.

Books that have been in publication for a while (or had a slow release) will earn you a few cents every few months. That’s not ideal, is it?

Using platforms like KDP Select to publish your writing gives you easier access to royalties you’ve earned from your work (and you’ll earn a larger percentage).