Questions and Answers About Auto Loans With Bad Credit

Is my credit score all that matters to a Sub Prime lender?- No, sub prime lenders look at your overall financial picture not just your credit score. average-credit-for-auto-loans/ Your job time and residence time, debt to income ratios, and whether or not your financial problems are in the past are all things that a lender will look at. How you paid your last auto loan and how you have been paying your bills recently are also good indicators for a bank.

Can I apply online for auto loans with bad credit?- Yes, There are literally hundreds of sub prime lenders out there who spend a lot of money advertising on the search engines and web sites to ultimately get to you the consumer. Look for phrases like “we specialize in bad credit”, “bad credit ok”, “guaranteed credit approval”. These are lenders that specialize in bad credit auto loans. Simply fill out their online application accurately and you will get a response shortly.

If I am self employed can I get approved?- Yes, many sub prime lenders will allow you to be self employed. You will however have to prove your income. Most sub prime lenders have policies in place as to what they will accept as proof of income. Some will accept your last 2 years of tax returns. Some will accept 3 months of personal bank statements that they can average your monthly deposits from. Some but not many will accept verbal verification from an employer. It is a good idea to ask the lender you are dealing with upfront what they will accept as proof of income.

Do I need a down payment?-Most of the time yes, when you put money down you accomplish 2 things for the bank. Number one you put them in an equity position on the loan. This minimizes their risk because when you make a substantial down payment your loan is usually less then what the collateral (in this case the car) is worth. Number two you are demonstrating to the bank that your financial problems are in the past by being disciplined enough to save up a down payment. You are also showing a commitment to this loan by making part of the payment upfront

Will a cosigner help me to get approved?-Yes, Most sub prime lenders will allow a cosigner on an application. When you add a cosigner many times it will help you to fit within the lenders guidelines better than if you applied on your own. For instance if you add a cosigner that lives at the same address as you most of the time the lender will combine both of your monthly incomes. This alone might get you approved if you were turned down previously for debt to income ratio reasons. Remember to bring someone to the table that is at least as stable as or more stable than you are. This will increase your chances for approval.

What type of documentation will I need to provide?- Usually you will need to provide a recent paystub to verify your income, some type of utility bill to prove you place of residence, a phone bill in your name to verify you have a phone, and some lenders will require 5 to 10 personal references.

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