Have you been turned down by your bank or credit union for a direct auto loan? Are you tired of getting turned down for a car loan every time you visit a dealership? If bad credit is keeping you from getting approved for an auto loan, a subprime car loan from a special finance dealer could be the solution you're looking for.
Subprime Is Different
It can be frustrating to feel like you're blocked at every turn when you really need a vehicle – especially if bad credit often leaves you in this situation. Subprime lenders are there specifically for this reason.
Just like traditional lenders, subprime lenders check your credit. But unlike banks and credit unions, they look beyond your credit scores and also base their auto loan approvals on other factors that show your ability to successfully complete a loan.
These factors, such as income, employment, residence stability, and willingness to make a down payment, really help subprime lenders get the whole story of your credit situation.
Because they look at other factors, lenders also ask that you bring in documents proving you are who you say you are, that you make what you stated you make, and that you live where you state you do.
This means it takes some preparation before visiting a dealership that works with these lenders. Let's look at how you can prepare for a visit to a special finance dealer.
Before Going to the Dealership
Before you head to a special finance dealership to apply for a loan, there are three main things you should do first:
- Build a budget – You should know exactly how much you can afford for a loan payment each month. It's important to balance your monthly payment with your overall income when deciding how much car you can afford. Don't forget that a monthly loan payment is only one piece of the car buying puzzle. You also have to plan for tax, title, and license fees, along with the costs of vehicle ownership such as fuel, maintenance, and auto insurance.
- Know your credit – Knowing where your credit stands is a vital part of the car buying process, no matter what you think your credit score looks like. When you know your credit score, you have the ability to research the types of interest rates and loan amounts that other people with similar credit qualify for. This way you know whether or not you're getting a good deal.
- Organize your documents – The documents you need to bring to a dealer are known as stipulations, and they're needed to qualify for a bad credit auto loan. They include: proof of income, proof of residence, proof of a working telephone, a valid driver's license, and a list of personal references. You also usually need a down payment, the common requirement being 10% of the vehicle’s selling price or $1,000, whichever is less.
Finding the Right Dealership
Now that you know a special finance dealership that works with subprime lenders is the place to go for bad credit car loans, do you know where to find these dealers? Not all dealerships work with subprime lenders, and those that do aren't always easy to find.
Here at The Car Connection, we work with a nationwide network of special finance dealers that have the lending resources you've been looking for! Don't let another day go by – fill out our easy, no-obligation auto loan request form to get the process of getting matched to a dealer near you started now!