Credit-challenged consumers sometimes ask us the amount they’ll get approved for - a question we really can't answer

Subprime Car Loan Amounts

Here at Auto Credit Express, borrowers with bad credit will ask us how much they’ll get approved for even before visiting a dealer.

Like the monthly car payment amount, we can't answer this question either. Here’s why:

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To begin with, only a lender can answer that question and Auto Credit Express is not a lender. We match consumers who fill out our application with car dealers in their area who are not only signed up with a broad range of lenders, but can deal with practically any credit situation.

Once the dealer receives the application, an appointment at the dealership is arranged with the borrower to discuss the borrower’s needs as well as their credit background. The dealer then decides which lender or lenders are the most appropriate, and, at that time, the application is submitted.

Once approved, the lender decides which program tier the applicant qualifies for. This determines the interest rate range (which depends upon the year and mileage of the vehicle program).

After examining the borrower's monthly gross income and recurring expenses (including rent or mortgage payment and utility bills), the lender will then calculate the borrower’s debt-to-income (DTI) as well as payment to income (PTI) ratios.

Most high-risk lenders will cap the total monthly debt of an applicant (including a car payment and auto insurance) at 50% of their monthly gross income. In addition, the car payment, itself, (including insurance) typically cannot exceed 15% of their gross monthly income (the payment-to-income ratio).

So without knowing a consumer's income and bills or which lender, program or program tier that person will qualify for, there is no way of knowing the dollar amount they will be approved for.

The Bottom Line

Since a borrower's income and bills as well as the lender and lending tier all have to be taken into consideration, there is no way we can know, ahead of time, what a borrower’s approval amount might be.

But there is one thing we can answer: If you find yourself in this situation and you're ready to reestablish your auto credit, yes, you can begin the process now by filling out our online auto loan application.