With the larger push toward a digital lifestyle in today's society, online auto loans are a popular way to get the financing you need for a car – if you qualify. The trustworthiness of an online lender may be subjective, but your ability to qualify for this kind of direct loan may not be.
Direct Auto Loans Online
While there may be many trustworthy online lenders, it's up to you to verify the authenticity of a lender. Good ways to do this are to verify the lender through the Better Business Bureau, check the lender's reputation through independent customer reviews, or put out feelers with your own network of people to see if anyone has had any experience with a particular company.
Online auto lenders are a type of direct lender that typically caters to borrowers with good credit. When you work with an online lender you're going right to the source for your loan, just as if you were at a bank or credit union. Not all lenders can work with all borrowers, but generally online lenders and other direct lenders work with people who carry a credit score around 660 or higher.
When you're struggling with poor credit it can be harder to get a loan through online lenders that may be less likely to work with borrowers in unique credit situations. In some cases, online car loans tend to be more "one size fits all" type loans.
A direct lender, such as a bank or a credit union, may offer direct loans to a wider range of borrowers. And, you may have a better chance at a direct loan if you're a member of a credit union. The longer you've been a member and had an account(s) in good standing, the better your chances of an auto loan may be.
Alternatives to Direct Online Car Lenders
If your credit score is on the lower end of the FICO credit scoring range of 300 to 850, you may find it easier to work with a subprime lender through a special finance dealership than to qualify with an online lender. If an online lender isn't in the cards for your situation, there are other options to consider.
Buy Here Pay Here Dealers
If your credit situation is worse for wear and you're having trouble getting a car loan due to a really bad credit score, you may need to look into a buy here pay here (BHPH) lot. These dealers are also the lender, providing what's known as in-house financing.
BHPH dealers are known for skipping the credit check, which makes them a logical choice for credit-challenged consumers. To make up for the lack of a credit check, though, you're likely to face a higher interest rate and be required to make a larger than average down payment.
You can only get used vehicles at BHPH car lots, and you may be required to make your payments according to your pay schedule, instead of monthly. BHPH dealers are a decent option for borrowers who've been turned down for subprime financing. Additionally, if you need a car right now – many borrowers typically get in and out with a vehicle in one day if they come in prepared for in-house financing.
Subprime Lenders
If your credit score isn't quite where you need it to be to qualify for a traditional direct loan, you may not have to jump to in-house financing just yet. People in unique credit situations still have the option to look for a subprime auto loan. These loans are given by subprime lenders that are signed up with special finance dealerships. They give you a better chance at qualifying for the lending you need because they look at more than just your credit score.
Qualifying for a car loan with a subprime lender means proving that you meet all lender stipulations such as an income of at least $1,500 to $2,500 before tax from a single source; proven residential stability; proof of a working telephone; five to eight personal references, and a down payment of around $1,000 or 10% of the vehicle's selling price.
Finding a Dealership With Our Trusted Service
When it comes to finding the right lender for your auto loan situation it can be a headache to call dealer after dealer looking for one that works with the lenders you need. If you space out your search too much, your credit score could also feel the sting of too many hard credit pulls.
You can avoid all the hassle by getting started right here at Auto Credit Express. We're not a lender, but for more than two decades we've gathered together a network of special finance dealerships that are signed up with subprime lenders to work with unique credit situations. Let us do the legwork of finding your next auto loan – just fill out our fast, free, zero-obligation auto loan request form. We'll get to work matching you with a dealer in your area.
