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Most Americans need cars but not everyone has access to the needed financing. Damaged credit scores take the most blame. What options are available for you if you have less-than-stellar FICO? Consider the nonprime auto loan alternative. Tapping into the market of borrowers who don’t fit into the narrow qualifications of conventional auto loan programs, the nonprime auto loan is the flexible option for borrowers who have unconventional income sources and low credit.

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Just like in any conventional auto loan program, nonprime auto loans have the same process, only different qualifications and guidelines. While most prime auto loans require their borrowers to have a credit score of 661 and above, nonprime auto loan borrowers are required to have a credit score of at least of 601-660. The program caters to borrowers who may be unemployed or have incomes that come from sources that are difficult to document. But this does not mean that any nonprime lender will give you financing directly. Nonprime is not subprime. Nonprime lenders still adhere to the Ability-to-Repay rule.

Brand New Car

Looking for the best car for your money? Don’t limit your options to used vehicles. Check out your budget and look for good models that fit within that budget. Brand new vehicles have less problems and are less prone to breakdowns. Shop around and get a quote.

Used Car

Find the best used car deal in the country. With a nonprime auto loan, your credit score doesn’t have to limit you from getting that dealership car you’ve been eyeing on. Talk to us about what you need to know before you begin.

Auto Loan – FAQ’s

How does nonprime differ from subprime?

Contrary to what most people may believe, nonprime auto loans are not as bad as one thinks. Because of the subprime crisis that caused a global economic meltdown back in 2008, people are already wary of any loans given to risky borrowers (i.e. those who have credit scores below what is considered prime).

Nonprime loans are offered to people who have low credit, yes, but the risk is usually compensated in other ways such as the requirement to put a bigger down payment. The lenders, before they can approve a loan, should first inspect the overall financial profile of the borrower to see if his debt-to-income ratio will not go through the roof and hinder the borrower’s ability to live accordingly while also repaying his or her debts.

Nonprime loans have structure, and although they are considered nonqualified loans, they are still adequately regulated.

What is the credit requirement?

Typically, a nonprime borrower is required to have a credit score between 601 to 660. You may be able to find some lenders who accept scores below this range, but they may compensate it in terms of other fees and charges, or a higher interest rate.

How much can I borrow?

The amount of the auto loan you will get depends on your qualifications, plus the interest.

How do I compensate for risk?

A low credit score or a questionable income record can be compensated by a) a higher interest rate; b) a bigger down payment; or c) getting the help of a cosigner with good credit.

What is I’m stuck in a bad deal and it’s too late to turn around?

If this is the case, your only hope is to build good credit and refinance to a new term with a lower interest, should the rate climate favor you.

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