How Do I Qualify for a Bad Credit Car Loan?

How Do I Qualify for a Bad Credit Car Loan?

The requirements for a bad credit car loan are different from a traditional car loan. But just because they’re different doesn’t mean it’s always difficult to get approved. Here’s what you need to know in order to qualify for a bad credit auto loan.

What Is a Bad Credit Car Loan?

A bad credit car loan, or subprime auto loan, is typically defined as a car loan for people with credit scores below 670. It’s also called special financing in dealerships.

Some dealers have special finance departments set up for those with bad credit. The lenders that work with these dealerships look at many different aspects during the qualifying process – not just your credit. They evaluate your unique, personal situation using your income, residence and job stability, and your credit score – just to name a few.

How Do I Apply for a Bad Credit Auto Loan?

With a subprime credit score, lenders require proof that you can successfully repay the loan. Subprime lenders normally require these items to consider borrowers for approval:

  • How Do I Qualify for a Bad Credit Car Loan?Proof of income – Provide a recent computer-generated pay stub with year-to-date income, showing a minimum gross monthly income of $1,500 to $2,000.
  • Proof of phone – A working, active phone in your name, and it can’t be a prepaid cell phone. This can be proven with a recent cell phone or landline bill.
  • Proof of residency – Lenders require a utility bill or bank statement, in your name, with your current address listed.
  • Driver’s license – Your license can’t be suspended, expired, or revoked, and must have your current address listed.
  • Personal references – Expect to provide a list of five to eight personal references with names, addresses, and phone numbers (and their permission to list them). You may include friends, coworkers, and family members, but family members with your address can’t be listed.
  • Down payment – Subprime lenders usually require a down payment of at least 10% of the vehicle’s selling price, or $1,000 (whichever turns out to be less).

Based on the information provided on your credit application, the lender determines your ability, stability, and willingness to successfully complete an auto loan. Your ability refers to your income; your stability refers to how long you’ve been employed at your job and lived in the same area; while your willingness to pay refers to your down payment and credit history.

Where Do I Find Dealers with Special Financing?

When you’re ready to find your next car loan, contact us at The Car Connection. We have gathered a network of dealerships with special financing departments that help buyers with bad credit. To start, fill out our custom auto loan request form (for free!) to get connected to a dealer in your area.


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