Getting a car loan when you have bad credit doesn’t have to be a difficult process. However, it is different than getting an auto loan with good credit. For starters, not all lenders are willing to help bad credit borrowers finance the vehicles they need.
Good Credit vs. Bad Credit Borrowers
The process of getting a car loan with good credit is very straightforward. Lenders can see through their credit reports and credit score that the borrower has a history of being responsible when it comes to handling their credit accounts.
Like all borrowers, those with good credit still have to pay the taxes and fees involved in a vehicle purchase. However, due to their credit, they can usually go to a dealership, choose a car, sign the paperwork, and take delivery without issue.
As a bad credit borrower, the financing process involves a few more steps. Typically, this is because the credit score and reports of a bad credit borrower reflect struggles with credit in the past, which makes lenders more wary.
However, the right types of lenders understand that there's more to an applicant than their credit score. Subprime lenders specialize in helping people with less than perfect credit. They look at other factors in addition to credit, which show them a borrower’s stability, as well as their ability and willingness to successfully complete an auto loan.
The Bad Credit Car Loan Approval Process
When you have bad credit, the process of getting an auto loan is almost the opposite of when you have good credit. With bad credit, it doesn’t start with choosing a vehicle – that actually comes last.
Instead, your focus should be on finding a lender that's willing to approve you. So, your first step should be visiting a dealership with subprime lending connections.
When you work with a subprime lender, you’re not in direct contact with the lender. Instead, you go through the finance manager or salesperson at a dealership. Once there, you have to provide proof that you meet the lending requirements.
These conditions vary from lender to lender, but you generally have to provide:
- A valid driver’s license
- Proof of income
- Proof of residence
- Proof of a working telephone
- A list of personal references
- A down payment
Providing these things gives the lender a more complete picture of you as a borrower. This allows them to see beyond your credit score, and determine if your bad credit is situational or habitual. If you meet all the qualifications, one of these lenders can likely approve you for a loan.
If you’re approved, the lender submits what’s known as a payment call to the dealer that states the maximum monthly payment and the interest rate you’re approved for, and any other necessary details. This lets you know which vehicles at the dealership you qualify for.
You can then pick one that's right for you, sign the paperwork, and take delivery to complete the process.
Finding the Dealership You Need
At Auto Credit Express, consumers often contact us asking if they’ve been approved for a loan, or how much they qualify for. We can’t answer those questions because we aren’t a lender. What we can do is take the hassle out of finding a dealer that works with subprime lenders.
It can be difficult to tell special finance dealerships apart from the crowd, especially in a busy metro area that seems to have a car dealer on every corner. So, instead of spending precious time and fuel driving all over town searching for a dealership that can help, let us do the searching for you.
Simply fill out our easy, fast, and free auto loan request form, and we’ll work to connect you to a dealer in your area that has the lending resources you need. It only takes a few minutes, and there’s never any obligation to buy. Don’t let bad credit stand in your way, get the process started right now!