Do I Qualify For a Car Loan?
Yes, you do qualify for a car loan. It’s not a matter of whether or not you qualify, it’s a matter of knowing the type of lender that you should be applying with.
Prime Lenders. These car loan companies specialize in working with applicants that have very high credit ratings, such as 700 and above. Typically, to be able to qualify for a car loan with a prime lender, you need to have a near perfect credit rating and have no late payments within the last two to three years. These lenders are very, very strict about their qualifications, yet their interest rates are very, very low. It’s common that these types of lenders will allow a 5 year old car to be financed for 5 years at a rate as low as 4.5%. You must have near perfect credit.
Sub-Prime Lenders. These car loan companies specialize in working with applicants that have very low credit ratings, such as 600 to 699. These are the most common types of finance companies that car dealerships use to get loans approved. Typically, if you have reasonably good credit, you can easily get approved with this type of lender. The interest rates generally are between 7 and 12%.
Special Finance. These are lenders that specialize in helping people with poor credit ratings, such as 480 to the upper 500’s. Qualifying is very easy and rather than relying solely on your credit score, these special lenders will take into account other aspects of your borrowing history. If you’ve had a repossession or late payments, a simple explanation as to why, is usually acceptable. As most people that have credit ratings that fall within this category, generally have little money to use as a down payment, there is typically no money down required to qualify.
Qualifying is easy, it’s a simple matter of knowing which lender will approve you.