Getting a Bad Credit Auto Loan: Apply Without Fear

When you need a bad credit auto loan, apply without fear. Many lenders offer loans to all types of borrowers.  If you can show that you are working, and are in a position to make the monthly payment, you can get a loan. A few credit blemished can not stop you.

The Car Dealer

When the salesman goes into the back office with your application, it’s in their best interest to get you an approval because when you buy a car from them, everyone gets paid. Here’s what generally happens:

  • The sales person takes your application to the finance person.
  • The finance person enters your information into the system.  The credit report and income are analyzed. The lender will submit your historial to many lenders and the lenders respond with appropriate offers.
  • Among these lenders are traditional lenders and sub-prime lenders. When an application is one from someone with credit problems, the process does slow down a bit, but there are many lenders looking at credit problem applications.

This process is generally fast, but, depends largely on the time of day. Be up front with your sales person about your credit. It can actually speed the process along in the end.

Step 1 – Seek Out Dealers

There are many people with less than perfect credit and many lenders have applied flexibility to their standards. Smaller lenders are typically more willing to take on risky, or bad credit, borrowers. You can easily find a dealership that may use many sub-prime lenders because they advertise bad credit financing. Refer to your local publications or online offers for quick guides.

Step 2 – Visit the Dealer

The dealer can pre-qualify you and will require you to have a down payment. Naturally, the more down payment money you have, the easier they will be to work with you. The sales person will let you know all of the information they will need. This usually involves the following:

  • Paystubs
  • Down payment money
  • Insurance (the lender will want to know that you can be insured)
  • Employment Information
  • You will also be required to pay taxes and licensing fees

Step 3 – Qualification

The dealer will gather upfront information and will enter the information into their system. The bank will then look things over and give a preliminary answer, such as a required amount for the down payment, additional income information etc. The dealer will give you more information as it becomes available. Provide the dealer with as much information as possible, as quickly as possible, to have them provide you with the best loans and services.

Step 4 – Get Your Car!

Once you choose your loan, you are ready for your car. Before you visit a dealership, arm yourself with information.  Be aware of licensing, taxes and downpayment amounts before allowing anyone to run your credit because running your credit report can lower you credit score.  Get a free credit report from  Transunion, Equifax or Experian to establish your credit history and correct all erroneous information before visiting a dealership.


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