Are you worried about being able to get approved for a car loan due to poor credit or a bad credit history? While you should take your financial history into consideration when looking for a car loan, you really don’t’ have to worry too much about your credit. The good news is there are always lenders willing to approve an auto loan for someone who may be overcoming a few financial hurdles.
Car loans for bad credit and low income borrowers are usually referred to as subprime auto loans. Anyone with a credit score below 525 will likely have to look into loan options from subprime lenders. Whatever lender you’re dealing they may exclusively deal with subprime borrowers or ithey might have a special program as part of their overall lending program. Either way, the possibility to finance a car with bad credit does exist.
Is there not something wrong with subprime loans though?
Don’t be worried when you hear the term subprime loan. The media has affixed a very negative connotation to these loans, which is unfair. A lot of the criticism centers on the high interest rates. There’s two sides to the coin when it comes to high interest rate car loans. These loans are called “high risk” to the lender because people who attain a bad credit auto loan are more likely to default in the future. For this reason alone, interests rates are going to be higher than what stellar credit would deliver.
That said, you can still get a fairly good APR on the loan if you are willing to do your research and shop around. Yes, there are some lenders with very high rates and extremely troubling terms and conditions. Avoid them! Instead, look at taking out a loan with a more reputable lender who can present terms that are reasonable and fair. Or you can use our application form as we’ve already done the research for you for local trusted car lenders.
Work on building your own credit
You also have to do your part as well. Namely, you should take steps to improve your credit score and, possibly, your income. No, this is not always easy but even a few minor steps can help improve your odds of being issued a better loan. Paying down debt and paying your bills on time are two very basic ways to get a credit score up.
Another way to build your credit faster is to make a much larger down payment on your loan. The loan amount ends up being smaller, which can contribute to a quicker approval.
Do not think because your credit history is a little rocky you are never going to be seriously considered for an auto loan. Options do exist and all you have to do is fill out our application form to get approved from one of our trusted lenders.