Things can be get a little tricky with
subprime auto loan lenders.
Subprime auto loan lenders are not known for low interest rates.
If you have bad credit and need transportation, you may consider going to
a subprime auto loan lender.
Not exact matches
An
auto equity
loan, which is available from traditional
lenders as well as some online
lenders, should not be confused with an
auto title
loan, which is typically offered by
subprime lenders to people who have bad credit.
Moreover, Experian reported that in the fourth quarter of 2012,
lenders increased
auto loans to borrowers identified as deep
subprime, with credit scores below 550, by 31 % year over year.
Bank risk professionals now believe that
lenders will keep allowing
subprime borrowers to take on credit card debt and have more access to
auto loans over the next six months, -LSB-...]
Bank risk professionals now believe that
lenders will keep allowing
subprime borrowers to take on credit card debt and have more access to
auto loans over the next six months, according to a survey by the Professional Risk Managers» International Association for the credit scoring company FICO.
Oblivious to the recent debacle in
subprime home lending,
auto lenders have worked hard to develop the
subprime (borrowers with credit scores below 640)
auto loan market, offering seven and eight year
loans and other strategies designed to make monthly payments low.
If you can't get financing through the dealership due to your poor credit history, you can look for
lenders that specialize in
subprime auto loans, such as the ones listed above.
With 60 - day delinquency rates now at 5.8 percent,
lenders are getting nervous about making
auto loans to
subprime consumers.
The riskiest of the
subprime auto loan borrowers might find more luck in going with smaller
lenders that are willing to accept the risk to stay in the lending game.
9.7 percent of
subprime loans given through
auto finance
lenders were at least 90 days delinquent last quarter.
Subprime auto loans tend to have higher interest rates than conventional
auto loans, and if a borrower is unable to repay the
loan, the
lender will repossess the car and sell it.
To ensure that borrowers are able to pay their
loans,
lenders offer
subprime auto loans with longer repayment periods.
Although second - chance
auto loans are out there, even
subprime lenders may want you to wait at least a few months after your repossession before they'll offer you a
loan.
Much like mortgages,
subprime auto loans go through Wall Street's securitization machine: Once
lenders make the
loans, they pool thousands of them into bonds that are sold in slices to investors like mutual funds, pensions and hedge funds.