Bad Credit Auto Loan - Getting Approved Through a Sub-prime Lender
If you are experiencing rejections from auto lenders, it could be because you have a bad credit. You should know that in today’s economic condition, it is getting tougher to get approval for auto loans from prime lenders. if prime lenders are refusing to lend to you, you might consider going to sub prime lenders. Sub prime lenders do not have strict requirements as do general finance companies.
Sub-prime lenders are in the business providing loans to poor credit individuals. Regardless of your credit situation, a sub-prime lender will be able to get you approved. In order to get you approved, they are certain requirement you have to meet.
These requirements vary with each sub-prime lender and there are preset guideline each lender must follow. Getting approved might depend on some of the following factors below:
Length of Employment: How many years you have been working in the same field or for the same employer. Most lenders prefer it to be between 12 months to 4 years.
Income: The amount of money you are bringing in each month. Most lender prefer that you are making at least $1500 a month.
DTI: This is known as Debt to Income Ratio. This is simply the amount you are spending each month minus the amount you are bringing in each month.
Payment to Income Ratio: Your payment to income ratio should not exceed below 30% of your income before taxes.
Other things may be calculated depending on the lenders lending criteria.
The sub-prime lender might also require you to have a down payment. There are others way to pay for the down payment without using cash. You may use rebates or trade off an old car that is already paid off. It is always good to reduce your monthly contribution towards your car payment.
It is always a good thing to shop around for sub-prime lenders. Since they have different rate and terms, you have to find the lender that meets your requirement. Regardless of your credit situation, you can find sub-prime lender who can make a loan out to you.
For more tips and resources on car loans visit auto loans for students We Will give you tips to find the best student auto loans
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