Getting approved for a car loan for credit-challenged car buyers isn't much different than for borrowers with perfect credit. What can change is how dealers and lenders are found.
Getting approved for a car loan
Here at Auto Credit Express, one of the most frequently-asked questions we receive from applicants is "Did I get approved?" Unfortunately, we really can't answer that question. Here are the reasons why:
1. Most subprime lenders only loan indirectly through their car dealer partners – Because these lenders typically only work through either franchised new car dealers or larger used car dealers, consumers can't directly apply for a loan either online or at a brick-and-mortar location.
2. We are not a lender – Our job here at Auto Credit Express is to match credit-challenged applicants to dealers in their area that will not only treat them with respect, but also have partnerships with a broad spectrum of lenders that cater to a wide variety of credit backgrounds.
3. Dealers must first interview applicants – In most cases, even dealers cannot tell applicants if they approved until they've interviewed them face-to-face. Even though our credit applications are thorough, they don't give dealer finance managers, or lenders, a comprehensive picture of an applicant's credit background. Because dealers are also acting as agents of these lenders, they need to verify an applicant's income and residence based on the documentation they receive at the interview. The interview also gives the finance manager a better idea of which lender will be the most appropriate (and advantageous) for each borrower.
4. Only a lender can make a credit decision – Dealers won't know a credit application has been approved until after the application has been submitted and they receive a credit decision from the lender.
The Bottom Line
Since subprime lenders typically only do business indirectly through their dealership partners, applicants with less than perfect credit won't know if they're approved until after they've visited the dealership, been interviewed by the finance manager, turned over the required documentation and had their credit application submitted to a lender.