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The Bad Credit Approval Process

Getting a car loan when you have bad credit doesn’t have to be a difficult process. However, it’s different than getting a car loan with good credit. For starters, not all lenders are willing to help borrowers with bad credit finance the vehicles they need.

Good credit versus bad borrowers

The process of getting a car loan with good credit is very simple. Lenders can see through their credit reports and credit score that the borrower has always been responsible when it comes to managing their credit accounts.

Like all borrowers, those with good credit must still pay the taxes and fees associated with the purchase of a vehicle. However, because of their credit, they can usually walk into a dealership, pick out a car, sign the paperwork, and take delivery with no problem.

As a borrower with bad credit, the funding process involves a few additional steps. Typically, this is because a borrower’s credit score and reports with bad credit reflect past credit problems, which makes lenders more suspicious.

However, the good types of lenders understand that there is more to an applicant than their credit rating. Subprime lenders specialize in helping people whose credit isn’t perfect. They look at other factors besides credit that show them a borrower’s stability and ability and willingness to be successful with an auto loan.

The Bad Credit Car Loan Approval Process

When you have bad credit, the process of getting a car loan is almost the opposite of when you have good credit. With bad credit, it doesn’t start with choosing a vehicle – it actually comes last.

Instead, you should focus on finding a lender who is willing to approve you. So your first step should be to visit a dealership with subprime loan relationships.

When you work with a subprime lender, you are not in direct contact with the lender. Instead, you go through the CFO or salesperson at a dealership. Once there, you must provide proof that you meet the loan conditions.

These requirements vary from lender to lender, but generally you must provide:

  • A valid driver’s license
  • proof of income
  • Proof of address
  • Evidence of a working phone
  • A list of personal references
  • A deposit

Providing these things gives the lender a more complete picture of you as a borrower. This allows them to see beyond your credit score and determine if your bad credit is situational or habitual. If you meet all the conditions, one of these lenders can probably approve you for a loan.

If you’re approved, the lender submits what’s called a payment call to the dealership that lists the maximum monthly payment and interest rate you’re approved for, along with any other necessary details. This lets you know which vehicles at the dealership you qualify for.

You can then choose one that suits you, sign the documents and take delivery to complete the process.

Find the dealer you need

AT Auto Express Credit, consumers often contact us to ask if they have been approved for a loan or the amount for which they are eligible. We cannot answer these questions as we are not a lender. What we can do is make it easier to find a dealer who works with subprime lenders.

It can be difficult to distinguish dealerships specializing in finance from the crowd, especially in a busy metropolitan area that seems to have a car dealership on every corner. So instead of spending valuable time and wasting fuel driving around town looking for a dealership that can help you, let us do the research for you.

Simply fill out our easy, fast and free form car loan application form, and we’ll work to connect you with a dealer in your area who has the loan resources you need. It only takes a few minutes and there is no obligation to purchase. Don’t let bad credit get in the way, start the process now!