Car buyers with bad credit can have a tough time finding a dealership that'll help them get approved because many lenders don't approve applicants dealing with credit trouble. If they need to finance a car, these buyers will have to find subprime financing.

What is a Bad Credit Car Loan?

Direct lenders – banks, credit unions, finance arms of automakers, and other major lenders – make your credit the most important factor when approving applicants. This makes getting approved to finance the car you need more of a challenge if your credit is hurting.

Because this leaves so many consumers out of luck, some lenders have stepped in to cover this gap by offering bad credit car loans. These subprime lenders allow people dealing with bad credit, low credit, no credit, and other various credit troubles the chance to finance a car.

Subprime lenders make factors outside of your credit their focus, such as your income, employment history, and residence history. To offset the bad credit portion, in most cases, you can expect different requirements to qualify and higher interest rates.

How Bad Credit Auto Loans Work

finance department, finance managerThe tricky thing about these loans is you can't apply with a subprime lender directly – most only work through dealerships. In addition, not every car dealer is signed up with subprime lenders, so you'll have to find one that is.

Once you've found one of these special finance dealerships, you'll meet with someone in their finance department. They'll work with you to find out your situation, establish what they'll try to do, and help you fill out an application. From there, they'll try to get you approved with one or more of their subprime lending partners by sending them your application.

If approved, the lender will send back what's known as a "payment call," which will establish the terms of the loan. This will determine how much you're allowed to borrow, how long of a loan you can take out, your interest rate, and all the other factors associated with the loan.

After that, the dealer will show you the vehicles in their inventory you qualify for. Then you can check them out, test drive them, review their history reports, and all the rest that goes into buying a car. Once you've chosen your vehicle, you'll move forward with the paperwork to finish the deal.

Finding a Bad Credit Car Loan

While there are a limited number of lenders willing to approve applicants with bad credit, the key to success lies with locating a dealership signed up with ones who are. Auto Credit Express wants to help you find one.

We're connected to a nationwide network of special finance car dealerships. When you use our service, we'll work to connect you with a local dealer that knows how to handle challenging credit situations. Getting started is easy, and our service is free and doesn't put you under any obligation. Begin by submitting our car loan request form today.