Image by sabeth718 via Flickr
Subprime is nearly a curse word to some people. In 2009 subprime car loans accounted for about 17% of loan originations. That dropped to less than 10% in 2010 after the financial crisis was in full swing. Now, as 2011 begins to mature, subprime loans are becoming a little more popular. Here are the three things that you can do that will improve your chances of securing subprime or second chance financing.
- Get your credit report. This will let you look for false information and give you a chance to dispute and have the information corrected. This may improve your overall credit score.
- Increase your down payment. If you want a subprime lender to consider your application, you have to have at least 20% down, whether that is in equity or cash. The more you put down, the better your approval rating will be.
- Be honest. Second chance lenders follow up on the information that you supply more thoroughly than regular banks. Even a slight exaggeration can end your chances of getting a loan.
All of these tips improve your chances of getting approved for a subprime car loan as well as lower the interest rate on that loan. It may be aggravating to seemingly jump through hoops to get a car loan, but when you pay one subprime loan off, you improve your chances of not needing a second.