Subprime Financing: What Does It Mean
The wide world of automotive financing isn’t always easy to navigate. With so many different avenues to explore, different dealerships, interest rates and credit scores to worry about, it can seem impossible to land an affordable rate. We’re here to tell you that it’s not! Subprime auto financing isn’t as confusing as it is made out to be and is actually a straightforward, and effective way to land an auto loan if you have bad or questionable credit. Once you’re done jumping for joy, we can help you understand the subprime loan market and break down the approval process.
Ready?
So...What is a Subprime Auto Loan?
A subprime auto loan is a loan that is offered above prime lending rates. In plain english, you may not have the greatest credit rating so you have to pay a higher interest rate than those who do. You’re not alone in the subprime market. In fact, over 20% of car loans are held by subprime lenders. We completely understand that just because you have
bad credit, doesn’t mean you don’t have the need for personal transportation. That’s where subprime lending comes into play.
Things to Know Before Getting a Subprime Loan
Before you hit the lot to shop for your next vehicle, there are a few things to consider. Arming yourself with information will help you make informed decisions about your auto loan and your vehicle choice. Here are a few things you should consider researching before talking with our financing department.
Do your research
Now that you know your budget, let’s take a minute to research what kind of car will work for you. Beyond what style of car, truck or SUV works best for you, you should consider age of the vehicle and value of your new vehicle. Put a little time into researching your new investment so you know you’re entering into an affordable loan. Working with a dealership is a great way to ensure vehicle quality, private sales could be seen as a little more risky.
Find out your credit score
Before you start your subprime credit application, we recommend you look into your credit score. One of the biggest perks of working with a subprime auto loan is that it can actually help you improve your credit. Take a look at your score and get an honest overview of your financial situation. Knowing your credit score means there won’t be any surprises when you fill out your application.
Been turned down? Not to worry
Being turned down isn’t the end of your journey. An expert financing department will work to find a lender that works for you and your credit situation. Don’t be shy about asking questions and taking advice about what you need to get approved.
Establish a budget
Before you start your subprime credit application, we recommend you look into your credit score. One of the biggest perks of working with a subprime auto loan is that it can actually help you improve your credit. Take a look at your score and get an honest overview of your financial situation. Knowing your credit score means there won’t be any surprises when you fill out your application.
Now you’re ready!
Get out there and apply for that subprime auto loan. Once you’re approved you can make that oh so important vehicle purchase and drive off the lot. However, it’s important to remember that your subprime journey doesn’t stop at approval. Make sure you make timely payments, in full so you can start rebuilding your credit. You’re armed with the information you need, good luck!
Still have questions? Our
financing department is here to help you through the process. Get in touch with Hollis Ford today and stop worrying about your credit’s impact on your auto loan.
Terry Kay
Hollis Ford
Financial Services Manager
866.981.0813
