Sub-Prime Car Loans

Not everyone has a stellar payment history. Fortunately there are lenders out there that understand this and offer credit terms to “poor credit car buyers”.  In this article, we will explain what you should know about the process of getting a car loan when your credit isn’t quite as good as it could be.

First thing you will find is that many lenders specializing  in poor credit loans often want to sell you a new car -not a used one.  We know this is counterintuitive but there is a major reason why.  From the lender’s perspective, a new car has more value as an asset and therefore offers more value that can be captured if the buyer defaults on the laon. The lender also has the assurance that a new-car buyer will actually keep up with payments because their money won’t be diverted to any costly repairs of an old car.  New cars simply don’t break as often.

If you’re someone who has bad credit but needs a new car, it is best to start planning for it. Start by getting a copy of your credit report and look to see how it would look to a lender.  You can get free credit reports from a number of online companies. is one of them and they give you one free report a year on each of the three major credit reporting agencies.

If your credit isn’t so great, you will be paying a high interest rate on your car loan but some lenders may offer lower rates than others. This is why it’s important to check out multiple lenders. To find out which lenders may be willing to finance people with poor credit, simply search for “bad credit loans” on the internet.  You will find many lenders and dealerships in your local area that offer this type of loan.

Now for the fun part: choose a dealer and see what cars they have to offer.  Generally, this will all be online in the form of “dealers inventory”.  Spend some time a pick out exactly what you would like.  Next step is to go visit the dealer and check the vehicle out.  However, don’t just stop by. When you go in, be prepared to talk about financing.  It would be an advantage to be able to show them some personal documents too, such as a most recent pay stub, a utility bill and a driver license.  These items will establish who you are so the dealer/lender can determine the best interest rate they can offer you.

Assuming everything works out, you should be able to drive home in your new car in just a few hours.  The best news is that if you keep up with your payments, you will establishing a new credit history that will eventually lose your old “sub-prime” one in the dust. Congratulations on your new car.