All You Need To Know About Subprime Car Loans

It is much easier to find lenders that offer subprime car loans for bad credit than it is to go about the task physically. On the internet, you can locate several websites that help borrowers in getting connected to loan dealers that specialize in providing auto loans for subprime credit. By using the services, you can get and compare the best free quotes within minutes. Besides, companies that own and manage these websites may also enable you to fix free consultations with competent local car loan advisers who can help you with the decision making process. Thus, your entire effort can save you a lot of time, energy and money during your overall effort.

What is a Subprime Auto Loan?

Subprime auto loans are vehicle financing credit services that are offered to borrowers who have bad or no credit histories. They have substantially higher interest rates, smaller loan amounts as well as pre-penalty clause for repaying the loan dues early. In addition, there will be loan processing fees that might vary from lender to lender. 

How Does Subprime Car Loan Financing Work?

Although there is no official credit score cut-off stipulated by subprime auto loan lenders, applicants that have credit scores in the FICO range 450 to 650 can apply for such types of car finances. But as a probable applicant, you will be required to furnish copies of some very recent pay stubs, W-2s or 1099 IRS forms as well as details of income tax returns for last 3 years. And it could be worthwhile to provide copy of your last 6 months bank statements as well if you intend to get a quick approval. Lenders will need these supporting documents for processing your application faster.

Here is some information relating to the current subprime car loans for bad credit interest rate trends.

New car loans

Subprime (450 to 649 FICO score): 13.23%

Deep Subprime (Less than 450 FICO score): 17.63%

Used car loans

Subprime: 12.05%

Deep Subprime: 15.44%

In any case, to see how much you can save on interests, it could be vital for you to do extensive shopping. By comparing multiple free quotes with an expert’s assistance, you could able to identify the best quote for your financial and credit circumstances.