What's a subprime car loan?
I've heard of subprime mortgages, but what about subprime car loans?
Answer provided by
Answered on Apr 08, 2021
“Subprime auto loans are designed for borrowers with either a low credit score or, in some cases, little or no credit history. Given that the lender is taking on greater risk by lending to someone with poor or no credit, these loans generally come with very high interest rates and substantial fees.
If you find you are in the subprime category of borrowers, the best course of action is to delay your purchase until you have improved your credit score. You can do this by paying down or paying off credit card balances, identifying and correcting any errors on your credit report, and taking out a smaller loan and making payments on time to establish a stronger credit history. This may improve your score enough that you can access better and less expensive car loans. “
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
If someone else is ticketed while driving my car, will my auto insurance premium go up?
I let my friend borrow my car and he got a ticket for speeding. Am I going to pay more for insurance as a result?
Feb 22, 2021
How much car insurance coverage do you think I actually need for my truck in Missouri?
I've got a 2008 Chevy Silverado and I live in Missouri. Is the state-minimum coverage ($25,000/$50,000/$10,000) good enough, or should I get more?
Apr 12, 2021
Is it considered a lapse in coverage if I cancel my car insurance, but I stay on my parents' insurance?
I just bought a motorcycle. As such, I won't be driving a car nearly as much, if at all, in the future. I want to cancel my car insurance, and I'm still on my parents' policy for the same vehicle. Is this considered a lapse in coverage?
Apr 28, 2021