Consumers with bad credit need to know what online resources are available to them and what to expect if they hope to successfully apply for a bad credit car loan.
Rebuilding your credit
At AutoNet Financial, we are in the business of helping our customers reestablish their credit by filling out a credit application and financing either a new or a newer pre-owned vehicle with bad credit automotive financing through high risk lenders. In the process, we have helped many of our customers raise their credit scores and reestablish their car credit by financing a vehicle with a bad credit auto loan. We also do our best to educate these consumers on the bad credit car loan process as well as the different types of lenders that are involved with these types of transactions.
One of the keys to a successful bad credit car loan is an understanding of how the bad credit automotive financing process differs from traditional car loan methods. So today we’ll begin by listing the different types of lenders and how someone with bad credit can apply for a loan with them.
Two different lender types
There are two basic types of lenders: those that deal directly with consumers and those that work through dealer “agents”.
Direct Lenders
Direct lenders are banks, credit unions and finance companies that lend money directly, hence the name, to the customer. Once approved for a loan from a direct lender, you can shop for a car like a cash buyer. Having this type of an approval also means that you don’t have to worry about whether or not the dealer can get you financed. Many direct lenders maintain a web site where you can directly apply for a car loan and receive an almost immediate response to your request.
The downside to these direct lenders is that most have stricter automotive financing underwriting guidelines. This means that they don’t do a very good job of approving applicants who have poor credit. Although a few bad credit lenders have had web sites where credit-challenged consumers could apply for a loan online, most of those lenders are no longer in the market.
Indirect Lenders
Most direct lenders also offer indirect lending through automobile dealers. Under their indirect lending programs, these lenders will often offer car dealers slightly better “buy rates” than they offer their direct customers. The dealers then have the choice of either offering their customers this rate, or marking it up in order to earn additional profit. It should be noted, however, that most of these direct/indirect lenders as well as the lending programs that feature these mark ups are associated with the most creditworthy customers, not those consumers with bad credit.
For credit-challenged customers, though, the indirect lending model is also the most common type of lender when it comes to dealing with consumers with poor credit. Unfortunately, since these lenders only do business through car dealers and the lenders don’t advertise which dealers they do business with while the dealers don’t list which lenders they’re signed up with, finding a dealer that can get you financed is often a hit-or-miss process.
Bad credit auto loan web sites
Not to be confused with lender web sites, bad credit automotive financing web sites such as www.autonetfinancial.com offer credit-challenged consumers an easy way to find a dealer that caters to, and has a department that specializes in, bad credit car loans.
By filling out a bad credit car loan application on this site, consumers can eliminate the necessity of driving around town in order to find a dealer that does special finance and possibly avoid the potential embarrassment of getting turned down for a loan.
As we see it
There are other ways and then there is the smart way of applying for a bad credit car loan.
For more information about subprime car loans, go to www.autonetfinancial.com and begin the process of rebuilding your credit by filling out our secure online credit application. If you need additional assistance, go to the “About Auto Net” tab and click on the “Contact Us” line where you will find our toll free number. Our customer service representatives are available to answer your questions during normal business hours.
