The term ‘subprime auto loan’ means more or less the same as ‘bad credit car loan’. However, there is a slight difference in that subprime auto loans target borrowers whose credit score may not even qualify as ‘poor’ or ‘bad’. Some don’t even make it to the credit rating range, which is between 300 to 850 points. For instance, young people just out of college may not have had much time to build any credit history at all. These are potential subprime auto loan clients.
Other potential candidates include those with poor to bad credit who, due to their less-than-impressive credit …
The journey towards credit recovery is long and riddled with tough decisions. Getting into bad credit does not require any effort. However, getting out of bad credit is like climbing a steep hill with a huge load tied on your back. It requires sacrifice and extreme financial discipline.
Getting financing from traditional lenders on bad credit is a near-impossible task. Although non-traditional lending options exist, these attract very high-interest rates and fees. The problem with the latter option is that it sinks one further into debt and has the potential of worsening one’s credit score. This is why it is important …
Your credit history contributes greatly to getting you approved for an auto loan. Lenders also use your credit history to determine the interest rates that you will be charged and other applicable fees.
It helps when you have a good credit history since the interest rates are lower and the fees less punitive. On the contrary, if you approach a lender with a bad credit history, you will have to brace yourself for higher interest rates and fees. Whether you currently have a stable job with a regular income, a bad credit can affect your chances of securing a car loan.
Buying a car on bad credit can be a daunting task. This is because many lenders often shun subprime borrowers. A bad credit score is to many a harsh indictment of their fiscal discipline.
But it does not have to be. Options abound for people seeking auto financing on bad credit. While some of these options may not be sugar-coated with the best interest rates, there are some that could nonetheless get you a car in spite of a bad credit score. Let’s look some of these options.
1. Consider Leasing
Leasing a car makes more economic sense, especially if you are heavily …
Having a bad credit score does not lock you out of auto loans. In fact, what you might think is bad credit could be very ‘good’ credit to someone else. There are many options available to people seeking auto loans on bad credit. Some of these are okay, while others should be a ‘no-go’ zone for you.
One of the things you should understand is that any lender offering you an auto loan on bad credit will try to make as much money out of you as possible. But you and I can beat them at their own game. In …