When you’re looking for an auto loan in Seattle with bad credit, you typically have a range of lending options available. However, some lenders are better equipped to work with credit-challenged consumers than others.

Bad Credit Lending Options in Seattle

What Kind of Lender Should I Use for a Bad Credit Car Loan in Seattle?Typically, there are two main options people have when they need a car loan: direct lending and indirect lending. These options are both available to Seattleites, but if you have bad credit, you may find one option to be more within reach.

As with any loan situation, your credit score and credit reports typically play a major role in the approval process, and bad credit has the potential to stand in your way. Not all lenders rely completely on your credit, however.

This makes certain lenders a better choice when you need a bad credit auto loan. Even though some lenders are more able to handle unique credit situations, everyone’s journey is different.

Here’s a look at your car loan options in Seattle.

1. Direct Lenders in the Emerald City

Direct lenders are typically banks, credit unions, or online lenders that approve a loan and give you a check you can use to purchase a vehicle at any dealership or from a private seller. When someone thinks about getting a loan, or mentions getting pre-approved, this is typically the type of loan they’re referring to.

Loans from direct lenders are usually easier to get if you have good credit. As a bad credit borrower, you may have more luck getting a direct loan from a lender that you have a good relationship with, such as a credit union. Because they’re non-profit organizations, credit unions are typically more lenient.

2. In-House Financing Dealerships

In-house financing dealers are a type of lender that can be ideal for bad credit borrowers, and they're better known as buy here pay here (BHPH) dealerships. These places are both dealers and lenders, so they're a one-stop shop to get a vehicle fast.

BHPH dealerships are able to approve people with bad credit, no credit, or other credit issues. In fact, they likely won't even pull your credit when you apply. They’re more concerned with whether or not a borrower can make their payments.

However, because these lenders are more lenient with approvals, borrowers typically pay more for these cars because BHPH dealers charge higher than average interest rates. They also only carry used vehicles, and you have to pick from what you qualify for that's on the lot.

3. Indirect Lenders Around the Sound

BHPH dealerships aren’t the only choice for bad credit borrowers around Seattle, though. Not all lenders are the same, and this is where indirect lending comes into play. Indirect lenders are lenders that work through dealers.

These can be either captive lenders – lenders that work for a specific auto brand or manufacturer – or independent lenders that work to underwrite loans at many types of dealerships. Indirect lenders, whether captive or independent, are third-party lenders. However, not all of these lenders work with all borrowers.

The lenders that work with bad credit borrowers are called subprime lenders, and they operate exclusively as third-party lenders through special finance dealers. These lenders look at other factors in addition to your credit in order to help approve you for an auto loan, which can often make them a good choice for people who are struggling with credit.

Finding the Lender That’s Right for You

No matter what your credit looks like, it’s important that you find the right lender to work with for your situation. When you have bad credit and need a car loan in Seattle, we want to help make your process as hassle-free as possible.

That’s why Auto Credit Express has a simple solution to help you find a dealership that’s equipped with lenders that can work with your credit situation. Just fill out our fast and free auto loan request form, and we’ll get to work matching you with a special financing dealer in your area.

We work with a nationwide network of these dealerships, including many in the Seattle area. So, what are you waiting for? Find a dealer that you can work with by getting started right now!