Have you been denied by a bank or dealer for a car loan? You’ve come to the right place! Many dealers now have special finance departments that focus on applicants with less-than-perfect FICO scores, and we make it easy to get approved.
When you apply online, we go to work getting you approved by a dealer or lender wants to fund your loan. For those who have problematic FICO scores, this is a great way to get financed.
Subprime Auto Finance Rates in California
Steeper APR rates are a fact of life when your credit score is 620 or less. Actual interest rates vary widely based on several different factors, including your loan provider, credit rating, loan type, loan term, and other criteria. Here are a few estimations based on our industry experience.
|FICO||Used Vehicle APR||New Vehicle APR|
Yes, these rates are not inexpensive. However, there are several things you can do to reduce the total interest paid on the loan. Firstly, steer clear of a lengthy financing term like 60 or 72 months. The longer it takes to repay the loan, the more you’ll pay in interest. Secondly, limit the amount financed by providing a down payment. If you want to pay less in overall interest, consider the following:
- Go for shorter-term financing. With shorter financing, you’ll pay less in interest.
- Put money down. A down payment will decrease how much you have to borrow, and thus the amount of interest you pay on it.
- Resident of California.
- Weekly income of $375 (pre-tax).
- Employed for a minimum of 1 year.
- All bankruptcies discharged.
- No repossession in the past 12 months.
This varies from company to company, but we can offer a few guidelines based on our industry experience.
- Used or new vehicles.
- Mileage of 75,000 miles or less.
- Vehicle only 6 years old.
- Minimum loan of $7500.
In addition, you might be required to purchase your car or truck from an approved dealer.
Do I Need a Down Payment?
For applicants with poor credit, down payments are often a requirement. Fortunately, down payments have several benefits for the borrower:
- Increased chances of approval.
- Size of loan is lowered.
- Less interest paid in the end.
- Less likelihood of negative equity in the vehicle
You’ve probably seen no money down, “sign and drive” promotions advertised on the radio or TV. If your loan officer or finance manager offers you one of these deals, plan on driving the vehicle until you’ve paid it off, to protect yourself from a negative equity situation.
Can This Boost My Credit Score?
Repaying a car loan as agreed is a popular way to re-establish credit. Your history of payments is a big factor in your credit score. When you make your payments on time month after month, this establishes your creditworthiness. Of course, there’s a flip side to this. If you get behind on your payments, you could easily make your FICO score even worse. Even though experts recommend dedicating just 18-20% of your income to vehicles, only 10% should be put toward your car payment. As an example, let’s look at the average numbers for California residents.
- Monthly Income: $2,470
- Total Transportation Budget: $445
- Recommended Payment: $247
- Leftover Budget for Fuel, Maintenance, etc: $198
Of course, you must adjust these percentages to your own budget.