Easy access to transportation is vital for every American. For those not living within big cities where public transport is easily available, having a private vehicle is a necessity. But it’s not always easy to get a car when you need it.

For one, you need money. And if you’re among the majority, you just don’t have all that liquid cash in your bank account you can withdraw any time a need tells you to. And so we take the most familiar Plan B: get a loan.

Getting an auto loan is not a problem for people with good credit and easily verifiable income. But what if your credit is damaged or you don’t have conventional income sources? What options are available for you?

Consider a Non-Prime Auto Loan

Since the legislative measures of the Dodd-Frank Act after the great financial crisis of 2008, people have become wary of any financing product that even remotely resembles subprime.

So when there were news of subprime comebacks in 2014, people were hesitant and reasonably suspicious. Rightly so, for the predators feed on the vulnerable.

Fortunately, non-prime loan products turned out to be quite different from subprime and this was made possible by one of the laws governed by the Dodd-Frank Act – the Ability-to-Repay rule.

Under ATR guidelines, lenders are obliged to look into the borrower’s profile to see his or her entire financial picture.

Lenders must be able to determine that the borrower’s current debt, once added with the prospective credit of the loan he or she is applying for, will not lead a significant portion of his or her income into debt payoffs.

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The flexible alternative

With a non-prime auto loan, you can get access to financing even if you have a score lower than what is considered prime.

Currently, non-prime auto loan lenders approve borrowers with credit scores from 601 to 660 in average.

Still that does not mean that you will no longer be able to qualify automatically if your score is lower than the average range. You can compensate for the risk by either:

1. Paying a higher interest
2. Putting a large down payment
3. Having a co-signer

Knowing when to reconsider

A car purchase is perhaps one of the most expensive buying decisions you will make next to a home. Do not get swayed by offers that let you pay lower monthly payments with low down payments and higher interest. You will end up paying more on the car than you should.

If you’re stuck in a deal, the wise thing to do is to make sure you build good credit and refinance to a new loan. This way, you can renew your interest rate into a more favorable one.

Experts advise that if you can’t find an interest lower than 10 percent, maybe you should reconsider your decision and restructure your strategy.

Use loan calculators readily available online to estimate your monthly payments. Feel free to play with the figures, putting various scenarios in mind.

The secret is to never rush. Know what rates are available for you and shop around for the best offers.

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