If you have bad credit and want to finance a vehicle, you have come to the right place. We have helped many people who have a credit score below 620 get auto financing through our large, nationwide network of auto finance companies, credit unions, and car dealerships. Our large network allows us to extend credit to thousands of people in need. Unlike small, local banks which often do not offer auto financing for those with bad credit, we have a network of partners who want your business regardless of your past credit problems.
The Basics of Auto Loans for Bad Credit
Many banks will not even consider an applicant with bad credit because they are concerned about such issues as non-payment, delinquency, and repossession. Banks will not serve these customers because the auto delinquency rates of people with bad credit are five times higher than those of other customers. When the borrower does not make their car payments for a specified period of time, the bank is then required to repossess the vehicle. When the lender repossesses the car, the bank loses money while the borrower only gets a bad mark on their credit report. Once they have repossessed a vehicle, the bank then sells it at auction for a substantially reduced price. For this reason, APR rates for people with bad credit are much higher, because the lender has to cover their risk.
How Our Process Is Different
It is estimated that about 25% of the American public has bad credit. Because there are so many people whose credit score is poor, there are also many lenders who offer financing to sub-prime borrowers. We work with these dealerships and bad credit auto lenders to help get you approved regardless of your credit history. In order to apply, all you need to do is fill out and submit your online application. Upon submission you will receive instant notification of the status of your application. If you are pre-approved, you will then work with your lender to finalize your auto finance package. Even if you are declined, we can still help, we offer you tools and resources that can help you repair your credit so that you can get approved for auto financing in the future. This simple process is all it takes to get back on the road to good credit. The minimum requirements for approval are simply that you are a resident of the United States or Canada, you make at least $1500 each month and you are 18 years or older.
Auto Loans with Bad Credit: Approval Rates
Many auto finance companies claim that they offer guaranteed approval, but this is simply not true. While we will honestly tell you that we cannot approve every application, we can assure you that we have one of the highest success rates in the finance industry when it comes to auto financing. We are able to get about 80% of our clients pre-approved for the auto loan that they need. Even if we are unable to approve your application, we will provide you with the tools and information that you need in order to improve your credit score. This can help you get approved for financing in the future. If you are concerned that you will not be approved, or if you have had past rejections on an auto loan, here are few tips for increasing your chances of auto loan approval.
- Make a Down Payment. If you can offer 20% of the car’s value as a down payment, this will make your application more attractive to prospective lenders. A down payment also helps to reduce the risk of having an “upside down” auto loan in the future.
- Get a Co-signer. If you have a friend or family member with good credit, ask them if they would be willing to co-sign on your auto loan.
Bad Credit Auto Loans, No Money Down?
It is certainly possible to get an auto loan without offering a down payment. It is important to remember however, that putting money down on a car protects both the lender and the borrower. You do not want to end up with negative equity, which is when you owe more for your car than it is worth. Many people refer to this situation as an “upside down” loan. This is a difficult situation for you as the car owner because it means that if you sell the car, you will not have enough to pay off your loan. A down payment can eliminate this problem. For example, if you pay $10,00 for a vehicle and you make a down payment of $2,000 (20%), the amount you finance will be $8,000. The car will probably lose about 15% of its value the first year that you own it, so it will be worth $6,800. If you did not provide a down payment, you would be “upside down” in your auto loan. This is why we always recommend making a down payment.