Yes, subprime financing is designed for bad credit borrowers. However, subprime financing isn’t the only bad credit car loan option for borrowers in need of a vehicle.

Subprime Car Loans for Bad Credit

If your credit score is below 660, then traditional vehicle financing can be difficult to obtain. Typically, good credit borrowers can go to a direct lender such as a bank, credit union, or a captive lender to get an auto loan. These lending institutions can have high credit score requirements that some bad credit borrowers can’t meet.

This is where subprime financing can help.

Subprime lenders specialize in assisting bad credit borrowers with credit scores around 660 or below and often assist new borrowers with limited credit histories, too. In fact, there’s a credit score range called “subprime” which is used to classify borrowers with less than perfect credit.

Subprime lenders are third-party and signed up with special finance dealerships. They often work with situations such as bankruptcy, situational bad credit, first-time car buyers, or past repossession. To apply for a subprime car loan, start by finding a special finance dealership that's partnered with them.

Is a Subprime Car Loan a Bad Credit Loan?While subprime lenders can work within many unique credit circumstances, you still have to prove your creditworthiness. Typically, this means providing documentation such as:

  • Computer-generated check stubs
  • Most recent utility bill in your name
  • Most recent phone bill in your name
  • Valid driver’s license
  • Down payment
  • List of personal references

If your credit history isn’t great but you have the resources to repay an auto loan and a down payment ready to go, then subprime financing could be the way you get a vehicle with a poor credit score.

An Alternative Bad Credit Car Loan Option

Subprime financing isn’t the only way that bad credit borrowers get vehicle financing! There are dealerships called buy here pay here (BHPH) car lots – where a credit check may not be required. If your credit isn’t pulled, then your low credit score doesn't have a say in your auto loan eligibility.

BHPH dealerships are often a go-to option for borrowers with tarnished credit histories. While dealers that don’t check your credit may not report your loan or on-time payments, it could be a pathway to an auto loan without your credit getting in the way.

Generally, BHPH dealers consider your income and down payment the most important aspects of your eligibility for a car loan. If you have proof of income, cash on hand, proof of address, and a working phone, it may be enough to get you vehicle financing.

BHPH dealerships can also be a good option for borrowers that don’t quite make the cut for subprime auto loans. Subprime lenders can work with many bad credit borrowers, but they may not be able to help in every situation – such as serious, recent delinquencies on your credit reports like a recent repossession.

In Need of a Bad Credit Auto Loan?

Getting the right auto loan for your credit situation starts with knowing where to look. But instead of doing all that looking yourself, let us take the reins and lead you to a dealer that has the resources to assist bad credit borrowers in getting the car they need.

Auto Credit Express has created a nationwide network of special finance dealerships, and we have over 20 years of experience in connecting borrowers to dealers in their local area. Fill out our free auto loan request form. We’ll look for a dealership in your area for free, with no obligation. It only takes a few minutes – so get started today!