Bad credit auto loans are risk-based loans that are marketed toward people with less than perfect credit.
The interest rates may be greater than those that a person with prime credit would be able to get. Subprime rates vary from lender to lender, and loan qualifications are based on income, job and residence stability, and credit rating. The more damaged your credit is, the higher the interest rates may be.
With this in mind, you should know that these auto loans are an excellent way to repair and rebuild credit with timely payments. Not all lenders will provide a chance for someone who has the desire to improve their finances and needs reliable transportation, which is where Drivers Lane comes in. After you have built your credit score up with timely payments, in many cases it is possible to refinance and get a lower interest rate.
What You Need To Get One
A FICO credit score of 501-600 places you in the subprime category. A FICO score below 500 is considered deep subprime, and the interest rates on these loans are the highest. When applying for a loan, you will need:
- Proof of a minimum monthly income of $1500.
- A down payment to reduce the vehicle's loan-to-value, overall interest charges and the risk to lenders.
At Drivers Lane, subprime auto loans are an economic tool that gives purchasing power to a segment of the population that has previously been excluded. For many people, though, these loans provide an opportunity to purchase a much-needed car. However, care must be taken to never overextend yourself with this type of loan.
Why They Are Needed
Installment auto loans are recommended by many experts as a great way to build credit with timely payments. At Drivers Lane, our experts understand the complexities of poor credit. When you fill out our quick and secure application, we connect you with a local dealer, and you may be approved with little or no money down. So, don't delay, and get started today building your credit in a great car!