If you’re looking to buy a car from a private seller but still need financing, you need to get a loan from a direct lender. However, these lenders can be difficult to work with if you’re struggling with credit issues.

Private Party Auto Loans

Bad Credit Auto Loans for Private SellersDirect lenders that can provide private party auto loans are typically banks or credit unions. These lenders – especially banks – usually only offer loans to people with good credit. So, if you’re dealing with credit issues, it may be in your best interest to start with a credit union when searching for this type of loan.

Credit unions are member owned, and usually have fewer fees and more affordable lending programs, but you have to be a member to take advantage of their services. Traditionally, membership is based on something particular, like your job type, geographical area, or fraternal organization. These days, qualifying for credit union membership can be a bit easier, and if you’re a member in good standing, the chances of qualifying for a private party auto loan are that much better.

Another option to check out are online lenders. Just like brick-and-mortar banks and credit unions, you can rate shop, compare interest rates you may qualify for, and see which lender is the best fit for you. If you’re approved, you simply take your check from the lender to the person you’re buying a car from, or the seller can accompany you to the bank or credit union to complete the sale.

If Direct Lending Doesn’t Work

If your credit is keeping you from getting approved with a direct lender, your best option is probably a subprime lender. Subprime lenders work indirectly through special finance car dealerships. These lenders have the ability to look beyond your credit score to approve you for an auto loan. But you have to purchase your vehicle from a dealer, not a private party.

Because borrowers with less than perfect credit can pose a bigger risk to lenders, working through special finance dealerships gives the lender another step in the verification process. By asking applicants to provide the dealer with documentation, these lenders are able to verify your income, employment, residency, and references. This is their way of digging deeper to help ensure borrowers successfully complete a loan.

Visiting a special finance dealership can also be a positive experience for you. Rather than purchasing a vehicle from a private party – where you can’t be 100 percent positive of the history – a car from a dealer has usually been inspected and verified to match the finance paperwork. Plus, vehicles from a dealership are less likely to have branded title issues.

Turn to Us for Your Next Car

Fortunately, there are dealers all across the country that work with subprime lenders, you just have to know where go. If you’re not sure where to turn, Auto Credit Express can help. We have a nationwide network of dealerships that can help get you approved, even if you have bad credit, no credit, or bankruptcy. Simply fill out our free, no-obligation auto loan request form, and we’ll work on matching you with a local dealer right away!