Are Deep Subprime Auto Loans Possible?

Deep subprime auto loans are possible, as long as you're working with the right lender. Here's what you need to know.

What is deep subprime credit? Deep subprime is one of five credit tiers on the FICO credit scoring model. It is the largest group, with the lowest scores, comprising of borrowers with a score below 580. The FICO credit scoring model ranges from 300 to 850, and the higher your number the better. Deep subprime borrowers may have trouble finding financing, and almost always pay more in interest when they do qualify for a loan.

Are Deep Subprime Auto Loans Possible?Can I get an auto loan with deep subprime credit? Deep subprime credit doesn't have to stand in your way when you need a car loan. In fact, even in this lowest credit score category, you may qualify for lending if you work with the right kind of lenders.

A subprime lender is someone that works with bad credit borrowers, including those with deep subprime credit. These lenders look at more than just your credit score to help you qualify for an auto loan. In order to stay in the running for a car, you need to meet certain qualifications, which can vary by lender.

Even though the specifics vary, there are typically a few requirements that are common among most lenders, including proving your income, employment, residency, and willingness to take on a car loan. You can do this by presenting the necessary documents the first time you meet with a dealer.

Increasing your chance at subprime financing. When you have poor credit, making the most of your car buying experience can mean being prepared. In order to increase your chances of qualifying for an auto loan you not only have to meet lender requirements, but you may need a little help, too. These tips can help you have your best chance of getting the auto loan you're seeking.

  • Bring a cosigner – a cosigner can help when your credit's not up to par because they act as a backup payer for the lender. In order to qualify as a cosigner, whomever you ask must have good credit, since this is what the lender uses to help approve you for the loan.
  • Make a big down payment – A bigger down payment doesn't mean automatic loan qualification, but it doesn't hurt. The more money you can use as a down payment, the more a lender can see you're willing to invest in your own success. Also, the more you put down the less you borrow; it's sometimes easier to qualify for a smaller loan.
  • Ask for a reasonable loan – When you have deep subprime credit, walking into a dealership and asking for a $40,000+ loan may not get you results. Make sure you're shopping for a vehicle that's well within your budget, you're more likely to be considered. Remember, smaller loans may be easier to acquire.
  • Enlist a co-borrower – If income is also an issue for you, enlisting a co-borrower to take out a joint auto loan may be the way to go. This way both your and your co-borrower's incomes and credit are used to determine eligibility for a car loan. Be aware though, that a joint auto loan has shared ownership, and the vehicle won't be solely yours.

Our take. Deep subprime auto loans are possible as long as you're working with the right lenders. Whether it's a subprime lender through a special finance dealership, a BHPH dealer, or the captive lender of some automakers, you typically have a few lanes to go. However, qualifying can be hard if you don't know what type of lender to start with. At The Car Connection, we want to help. Simply fill out our fast, free auto loan request form and we'll get you connected to a local dealership that wants to help.


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