Frequently Asked Auto Loan Questions & Answers - Auto Loans for Special Finance, Subprime Auto Loan Financing
1. What type of auto loan am I applying for?
All effort is made to locate an auto loan approval through one of our
affiliated direct lenders with a same as "cash"
voucher or draft to use like a check to pay for your vehicle.
When an approval cannot be granted, our Preferred Special Finance Auto Dealer's go to work for you to find you appropriate Subprime loan for you.
2.
What is the difference between "Direct" and "Indirect" auto financing?
Direct = Same as cash voucher or Draft approval from financial
institution for shopping at a dealer of your choice. Indirect
Auto Loan = Dealer Financing
3. What is the difference between Prime lending and Special Finance or Subprime auto loan?
Prime lending is for people who have excellent credit, with no recent dings on their credit history. Special Finance, also know as Subprime auto loans, are granted to people who have less than perfect credit.
4.
Should I have my automobile picked out before I apply for
an auto loan?
You do not want to choose the automobile first! Your first
goal is to apply for direct online auto loan financing. Upon receiving an auto loan approval you will
receive a voucher for a maximum amount of dollars to spend,
based on your current debt-to-income ratio and your current
credit standing. You will simply complete the voucher by filling
in the amount for the cost of the automobile, (not to exceed
the maximum amount of your approval), the same as you would
a check.
5.
Does applying to multiple lenders for auto financing have a negative
affect on my Credit Bureau score?
No. At the present time, the credit scoring agencies say that
all credit inquiries within a 14 day period associated with one type of buying are consolidated into one inquiry
for scoring purposes.
6.
What determines my auto loan interest rate?
Interest rates are set according to the condition of your
credit. Lenders and auto dealers use a credit rating score
and their own internal rating criteria to determine APR to be set for your auto loan. The
credit rating score is normally referred to as FICO or Beacon.
Prime borrowing is usually a score above "680", and interest
rates for a prime customer are generally 9.99% and lower.
A score between "525 and 679" is considered special finance or subprime. Subprime lending rates will usually fall between
9% and 24% depending on your score and present personal credit
circumstances.
