What are Subprime Auto Loans?
The prefix "sub" means below or under and the word subprime means below prime or less than prime. So what does all this have to do with car loans? Well, when it comes to financing a car knowing what this means is very important. Individuals with credit that is less than perfect, have no credit, lack sufficient income or have experienced bankruptcy are usually candidates for this type of auto loan.
Advantages of Subprime Auto Loans
Applying for an auto loan does not have to take weeks, days or even hours. You can actually apply for automobile loans and find out whether or you're approved in just 60 seconds. Another advantage of applying for a used car loan online is that you can take your time searching, compare rates, get quotes and as previously mentioned, get approved within a minute.
Things to Consider before Applying for Subprime Auto Loans Even though there are some pretty good advantages associated with subprime auto loans, there are a few things to consider before you sign on the dotted line. Since the borrowers of these car loans are typically those with an unusual or a challenging credit historyas previously mentioned, lenders consider financing a car under these circumstances a high risk. Therefore, interest rates are likely to be significantly higher than a prime or other traditional loan. Another thing to be aware of and consider are the costly fees attached that are often not affiliated with more traditional loans. Also, some lenders may tack on a pretty steep penalty if you should happen to pay your loan off before time. So, be sure to take some time and shop around before making your final decision.
A Final Word on Subprime Auto Loans Obtaining automobile loans is a path often taken by many to get the car of their dreams or the car they need. Just because your current credit situation is less than perfect or you too perfect because you haven't established any yet, you still have the right and privilege to choose how much interest you want to pay, even though it may be higher. Before you begin shopping and settle on a used car loan, know what kind of car you are looking for and what the blue book value is for that particular car. Know ahead of time how much you can afford to spend every month on car payments, that way when you apply and are approved for a certain amount you already know your limit. For some this is your first shot in the credit world, for others this is your second or even third, so be sure to make your payments on time.