Nowadays with a few clicks of a mouse you can apply for auto loans with bad credit from the comfort of your own home. Sub prime lenders spend a lot of money to get their ads placed on different web sites and search engines to ultimately reach you the consumer. The sub prime market represents a huge profit center for these lenders because the margins they can hold are higher than on their prime loans they approve. The turn around time on these loans is usually very quick, many times even the same day. This will save you a lot of time over driving to different banks in person to apply. By doing your due diligence online you can have a pre approval in hand before you go to the dealer. This greatly increases your negotiating power when you find the car of your dreams.
Here are some things to consider when applying online.
1) Make sure they are a sub prime lender- If you already know your credit is bad it does you no good to apply with a lender that doesn’t work with damaged credit. When searching through the ads look for phrases like “car loans for bad credit” or “no credit car loans” things of that nature. This will tell you that they are willing to work with individuals with bad or limited credit.
2) Have them compete for your business- Narrow your choices down to two or three lenders to submit your application to. Once you receive an approval from one lender contact the other lenders and try to get them to approve you at a lower rate. These sub prime lenders want new business so if they have already approved you it never hurts to ask for a cheaper rate especially if you have an approval from another lender in hand. The worse they can do is say no.
3) Have documentation available- Most sub prime lenders will require you to prove your income. Have a few of your most recent pay stubs available to fax or mail to them. They may require proof of residence for where you live so have a recent utility bill available also. Having these documents available ahead of time speeds up the approval process.
By spending some time getting your documents ready and applying to a few select lenders online you will save the most time and money on your loan. Having your pre approval letter in hand will give you negotiating power at the dealership to save you the most money on your new car.
