Late and missed payments. A change in circumstances, such as bankruptcy or foreclosure. Even starting out as a first-time borrower. All of these things can cause bad credit and put certain financial services, like subprime auto loans, on your radar. As with many services, knowing what to look for will help you settle on the right option for your situation.
What is a subprime auto loan?
A subprime auto loan is financing that’s extended to a customer with bad credit, and “bad” or “poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. Credit scores are typically important though not the sole factor in lending decisions. A range of other criteria, such as loan amount, down payment, income, and whether there is a co-applicant on the application, can also come into play.
Become a savvy shopper and select the right lender
A variety of lenders provide subprime auto loans but some will likely be more suited to you than others. As a full-spectrum lender, RoadLoans accepts applications from consumers with all types of credit and has a great deal of experience working with those who have poor credit, including post-bankruptcy and repossession. And as an online lender, we provide a wealth of resources to help car shoppers find the right type of loan for their situation. These include finance calculators to estimate what may work as a monthly payment and loan amount; articles explaining the auto financing process in different circumstances, and tips for understanding and improving credit scores. It’s all available to check out in your own time, with no pressure.
Get preapproved, and know before you go
Another difference between RoadLoans and other subprime auto loan options, such as “buy here, pay here” dealerships, for example, is the opportunity for our customers to get preapproved. Getting approved for a loan before visiting the dealership is the approach recommended by the Consumer Financial Protection Bureau, and enables buyers to shop with confidence, already knowing how much they have to spend on a vehicle, along with other financing terms like APR. That enables them to concentrate on choosing the right car and negotiating a great deal. It can be quite a different experience when you’re trying to shop for your vehicle and talk financing at the same time.
Use that auto loan to buy a great car
With bad credit, you might only be approved for a loan amount large enough to buy a used vehicle, which isn’t so bad since more than twice as many preowned cars as new ones are sold each year. Even so, finding a model that’s reliable is often high on the priority list. RoadLoans works with a network of 14,000 dealerships across the United States able to show customers select, high-quality vehicles meeting our standards for age, mileage and financing. If you’re approved, make your choice, let the dealer finalize the financing arrangements with us, and then drive. Our streamlined process means customers can apply, buy and get on the road the same day if they wish.
Get an instant loan decision
If you have poor credit and are looking for an auto loan to buy a car, truck or SUV, apply for financing online with RoadLoans. Our one-page application takes a few minutes to complete and you’ll get an instant loan decision.
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