Even with a turndown there are still a number of things you can do to get an approval for a bad credit auto loan.
We’ve been there
At Auto Net Financial, for the last twelve years we have been helping consumers with bad credit raise their FICO scores and reestablish their car credit by financing a vehicle with bad credit auto loans. As borrowers, one of the things consumers can do to make the process go more smoothly is to educate themselves about the subprime loans process and what they can do if their loan is turned down.
If you find yourself in this position, there are usually a few things that can be done to turn the loan rejection into an approval. To help you understand, we have listed some of the most common things that can be done:
Look at a cheaper car
One of the biggest mistakes that consumers with bad credit make is trying to buy “too much” car. Bad credit car lenders, especially in the current economic environment, are particularly sensitive to debt to income ratios. Expensive cars also tend to lose their values more quickly and buying one of these could put you “upside down” in the loan further and more rapidly than a less pricy vehicle.
Try asking the lender if they would consider approving you if you “downsized” the type of vehicle you are looking at. The upside is that a less expensive vehicle will either make the payment more affordable or, given the same payment, shorten the loan term. Either way, your interest expense will be less and the loan will be easier to handle.
Put more money down
Nothing makes subprime lenders happier than seeing a large amount of cash from a customer. It puts the lender in a better equity position on the loan and it also shows the bank that you are disciplined enough to save for a down payment and you’re willing to take on an equity stake in the loan. The larger your equity in the loan, the less risk the bank assumes.
Consider a co-signer
Many bad credit auto lenders accept co-signers living at the same address. Be sure the co-signer has better credit as well as job and residence stability at least as good as yours. The co-signer must also qualify for the loan based on income and debt, since you are both jointly and individually responsible for the loan.
The Bottom Line
At Auto Net Financial, we want you to make the right choices when it comes to a bad credit car loan buying decision. That includes finding the right dealer and the right car to help you reestablish your auto credit and improve your credit score.
For more information on the bad credit auto loan process, please visit our web site at www.autonetfinancial.com.
