Direct Financing Auto Loans and Bad Credit: What You Should Know

When you’re applying for a car loan, you have the option of getting direct auto financing – financing through a lending institution – or indirect auto financing – financing through a dealership. But when you have bad credit, your options may be limited, and getting direct financing through a bank or credit union can be more of a challenge.

What’s Direct Auto Financing?

Direct Financing Auto Loans and Bad Credit: What You Should KnowDirect auto financing is when you apply for a car loan directly from a bank or credit union. This is a great way to go about getting financed, especially if you have a good relationship with your lending institution.

The loan officers at your bank or credit union have the ability to pre-approve you for a car loan, which makes rate shopping and car buying easier. With an auto loan pre-approval, you can compare what you qualified for with a bank, online lender, or credit union to other lenders.

Can I Get Direct Financing with Bad Credit?

If your credit isn’t stellar, it’s still possible to get direct auto financing with bad credit. The key is to have a good relationship with your bank or credit union. If you have a solid credit history, they may be able to pre-approve you. But, this depends on the lender, your credit score, and how severe your negative marks are.

When Direct Financing Doesn’t Work

If you go to a direct lender and are turned down, your next best option is to look for a subprime lender. These lenders work indirectly through special finance dealerships and look at factors beyond your credit score to get you approved for an auto loan, such as:

  • Ability to pay a loan – Your income and employment
  • Residence and job stability – How long you’ve worked for your employer and lived in the same area
  • Willingness to pay a loan – Your overall payment history, especially when it comes to previous auto loans

Although your interest rate is going to be higher, you may qualify for a car loan with the chance to rebuild your credit.

Need Help Finding Financing?

If you weren’t able to get pre-approved at your bank, don’t get stuck driving from dealer to dealer only to be turned down for auto financing. Let The Car Connection do the searching for you.

We want to connect you to a local dealership that knows to work through unique credit situations. What are you waiting for? Get started right now by filling out our car loan request form.


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At The Car Connection, our goal is to remove the challenges of getting financed for a vehicle. Through technology, flexible financing options and exceptional customer service, we want to give you the power to control your car-buying experience.

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