How do I Know What Lender to Choose?

Get Car Financing
Even with poor credit.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - January 19, 2018

Car loans can be as different as the borrowers who need them. As a buyer, it’s important to look for financing from the right type of lender.

Good Credit and Traditional Lenders

Borrowers with credit scores around 650 and higher typically qualify for traditional loans. In this situation, the borrower should be able to go into a dealership, fill out the paperwork, pick out their vehicle, get financing, and take delivery.

Without credit issues, people also have a better chance of pre-approval from a direct lender, such as a bank or credit union. With direct financing, the process becomes even easier, because the buyer knows exactly what they can spend, having a pre-approval amount.

Bad Credit and Subprime Lenders

Typically, anyone with a credit score of around 620 or lower may need to consider subprime lending. These lenders only work indirectly through special finance dealers. To qualify for these loans, a potential borrower will need to meet income, employment, and residency requirements. Additionally, a subprime loan has more restrictions concerning vehicle selection, and carries higher interest rates. The plus side to this type of loan is that it’s a great credit builder if the borrower stays current with payments.

No Credit and In-House Financing

Even people who have very low credit or no credit at all can usually get in-house financing because lenders who practice this typically don’t check credit. In this case, a buyer’s job is often enough – they can drive away as long as they make the money to cover weekly or bi-weekly payments (usually in person and in cash).

In-house financiers – also known as Buy Here Pay Here (BHPH) dealers – have some serious downsides. BHPH dealers typically charge much higher interest rates than even subprime lenders, and their vehicles tend to be older models with higher mileage. Because the dealers are the lenders, there’s zero wiggle room when it comes to making payments – even borrowers with payments just 24 hours past due may find themselves facing consequences. Also, BHPH dealers don’t typically report to the credit bureaus, so on-time payments won’t help improve a borrower’s credit.

Finding the Lender to Fit Your Situation

Whatever credit situation you find yourself in, working with the right lender helps ensure a successful auto loan completion. If you struggle with credit issues and don’t know where to turn, CarsDirect wants to help. We work with special finance dealers from coast-to-coast that have the lending specialists available to help people with credit challenges. What are you waiting for? Fill out our no-obligation auto loan request form today!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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