How Can Credit Amnesty Help Me Get a Car Loan?

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Even with poor credit.


Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

, - October 16, 2019

Credit amnesty is another term for bad credit forgiveness. Not all lenders offer credit amnesty programs, and, unfortunately, you don’t get a true pardon when you take out a bad credit car loan – you simply give yourself the chance to rebuild your credit. We can point you in the direction of a dealership that has the lenders you’re looking for, but we first need to explain the types of lenders you should be working with, and what it takes to qualify for a bad credit auto loan.

Lenders That Work with Credit Amnesty

In order to get a bad credit car loan, you first need to find a lender that offers credit forgiveness. Direct lenders, such as banks and credit unions, don’t typically work with credit-challenged consumers. However, you can still try to get pre-approved with your lending institution if you've maintained a good relationship with them.

As for the lenders who offer credit amnesty, there are two types you could work with:

  • Subprime lenders – These indirect lenders work through special finance dealers. They offer loans to credit-challenged consumers, run credit checks, and base approvals on additional factors such as income level and work stability. These lenders report on-time payments to the credit bureaus, which means you get the chance to build or rebuild your credit.
  • Buy here pay here dealerships – Also called tote the note dealers, buy here pay here (BHPH) dealerships offer in-house financing, which means they’re lenders and dealers. It’s easy to get approved for an auto loan through a BHPH dealership because most of them don’t run credit checks, and instead base approvals on income. However, you may not get the chance to build your credit with one of these loans, as some of these dealers don’t report timely payments to the credit bureaus.

Qualifying for a Bad Credit Auto Loan

Now that you know which lenders offer credit amnesty that you should be looking for, what does it take to qualify for a bad credit car loan? The qualifications vary by lender, but you can expect both subprime lenders and BHPH dealerships to require these two things:

  1. Proof of incomeYou must meet a minimum income requirement. Generally, this means an income at least $1,500 to $2,000 a month before taxes. Subprime lenders need this income to come from one job, but BHPH dealers don’t care how many sources of income you have, as long as, together, they meet the minimum. You typically prove your income by bringing in a recent computer-generated pay stub that shows your year-to-date earnings, or recent tax returns and bank statements if you’re not a regular W-2 employee.
  2. Down payment – Down payments are required if you want a bad credit auto loan, but you don’t necessarily need to make a large one. For subprime lenders, the minimum required amount for a down payment is usually $1,000 or 10% of the vehicle’s selling price, whichever is less. BHPH dealerships, on the other hand, base the down payment amount on the car you choose and are known to have higher requirements than subprime lenders.

The Bottom Line

You aren’t going to get a true pardon when you go through a credit amnesty program, but you do get a second chance at financing a car and rebuilding your credit. The key is to work with the right lender, but finding one can be tough. Luckily, we do the searching for you and make the process move quickly.

At CarsDirect, we work with a nationwide network of dealerships that have the lending resources available to help people in unique credit situations. Our process is free of cost and obligation. Get started by filling out our online auto loan request form today.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

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