Subprime Auto Loan in Beamsville, ON
What Is a Subprime Auto Loan?
If you have ever tried to purchase a vehicle with credit that is less than perfect or has a few dings, you are probably familiar with the term "subprime auto loan." What does this terminology mean, though? A subprime auto loan is an offer of finance extended to individuals with credit scores below a certain threshold. Most lenders are willing to work with buyers who have lower credit scores, but they offer them different terms and interest rates in the form of a subprime auto loan. Typically, a subprime auto loan will be accompanied by higher interest rates than traditional auto financing. In addition, higher fees may also come into play, so this is something to expect. Since the lender has increased risk in accepting lower credit scores, higher interest rates and fees help offset some of their risks.
How a Subprime Auto Loan Offer Is Formed?
Our Finance Centre works with various lenders who are often willing to provide subprime auto loans. These types of loans work well with our used inventory, as they give buyers a chance to get into a great vehicle with credit that may not be ideal. A debt-to-income ratio and payment-to-income ratio are considered when a lender determines how much to offer at what rates for a subprime auto loan. Typically, these rates will need to be twenty percent or less to qualify for this type of financing.
Contact Us for More Lending Information
If you have a question about what you may qualify for or need help applying for financing, the professionals at Lincoln Township Motors are ready and waiting. Our Finance Centre professionals know each lender's requirements and can help you understand what is required for subprime lending acceptance. Contact us today and schedule a test drive of your desired vehicle.