Subprime Lending in Edmonton, AB
Subprime Auto Loan
If you are in the market for a new vehicle and may not have the best credit score, you have probably come across the term subprime auto loan. Many consumers don't completely understand how a subprime auto loan can help them get behind the wheel of their next new vehicle. Car financing can be a tricky path to walk; fortunately, at Elmwood Used Car, we are thrilled to walk that path with you. Our main goal is to help you find the perfect vehicle that suits your personality and lifestyle. Our extensive used vehicle inventory will definitely have a vehicle that you will love. So, browse online or in-store to find the used vehicle of your dreams.
Don't forget to visit your finance centre, and this is where all the financing magic happens. Our financial experts will utilize their knowledge and resources to help you get the credit you need. Now, let's take the time to learn more about subprime auto loans so you can make an educated decision. Below are some of the most frequently asked questions.
What is a subprime auto loan?
A subprime auto loan is typically given to buyers that do not have a perfect credit score. An ideal or excellent credit score is in the 800 range, while a score below 600 is considered to be in the subprime range. Remember, even if you have a low score doesn't mean you won't get an auto loan; many lenders will work with you to help you get credit.
Lenders will look at a couple of ratios to determine whether you require a regular or subprime auto loan. This includes the debt-to-income ratio and payment-to-income ratio. For the debt-to-income ratio, the lender wants to see whether your income is higher than your possible monthly payments by about 50 percent. At the same time, the payment-to-income ratio takes into consideration your insurance premium as well. They want to see this rate 20 percent or below.
What is the subprime interest rate for car loans?
It's hard to give a definite answer; however, subprime auto loans can start at 8 percent and go to over 20 percent. This is obviously dependent on your credit score and the amount of risk a lender feels.
What credit score is subprime?
Credit scores range from approximately 800 to below 500. A buyer will be in subprime territory if their credit score falls below 620. Many traditional banks and lenders will not offer loans to individuals in this category. That's why at Elmwood, we are ready and willing to provide you with a loan.
How credit score affects car loans
Your credit score is the main determining factor when it comes to whether you will get a car loan or not. Your credit score is based on the following factors:
- Payment history
- Credit utilization
- Length of credit history
So, making sure to keep an eye on these factors will help you get the financing you need.
At Elmwood Used Cars, we are excited to help you in your vehicle purchasing journey. There are so many options in the marketplace, but we want you to understand why we are the best. Our history in the Edmonton area is a testament to your success. We want to build off that success by continuing to push the limits of consumer satisfaction. If you have any questions or want to get to know the financing process a bit better, please don't hesitate to contact us for more information. One of your financial and product specialists is standing by to help in any way they can.