As Michigan residents crawl out of the recent recession there still seems to be many struggling to get the things needed to stay above water financially. Not only do you need a vehicle for your daily essentials, but a vast majority of residents drive over an hour a day for work. It has become a necessity for Michigan residents to own a vehicle, and many lenders and dealerships have opened up credit requirements for bad credit consumers to get approved.
There are many car dealerships in Michigan that do business with people’s bad credit auto loan guaranteed financing options for bad credit car buyers. Lenders understand the reasons of why many people have bad credit. A lot of that has to do with job loss, and the economy taking a hit a few years back. With the unemployment rate going down the need for poor credit auto loans has increased vastly. Lenders have developed programs allowing them to lend to high risk borrowers. While dealerships offer guaranteed approval, borrowers will fall into one of two types of programs; subprime loans or buy here pay here financing.
Subprime Auto Loans Can Benefit From Down Payment
Subprime loans are based more off of your credit score ranging from 520 to 600 credit score. Dealerships have relationships with third party lenders to get you bad credit financing. However, your interest rates are going to be slightly higher than those of a good credit buyer would be able to get. Most of these dealerships are going to require you to put 10 to 15 percent down on the vehicle. If you are able to put more down, it will only be in your favor to do so. The more money you put down, the less you need to finance saving you money at the end of the loan term.
Other Options Can Include In House Financing or BHPH
For buyers looking for the 1st time car buyer program or those with severely damaged credit scores, 519 and below for example, dealers have a program known as buy here pay here, or in-house financing. This program is based off of your income alone; already knowing you may have deeper credit issues. The dealerships themselves finance you, and you pay them directly with either weekly or bi-weekly payments.
With in-house financing, you will have to prove your income, DTI, and residency just as you would with subprime loans. The added piece of info is going to be references. You will be asked for four to six personal references such as friends or family members. They will not use your references to approve you for the loan, but will use them in the instance that you may default on the loan.
While you can drive from dealer to dealer searching for the best one, the online lending market has grown tremendously making shopping for financing competitive and affordable. Specialfi.net has a nationwide network of dealerships across the state of Michigan that you can be matched you with. These dealerships specialize in subprime and deep subprime lending and will work with you throughout your entire buying process. Simply fill out the online application and you could have your pre-approval within 24-48 hours and shopping for your new and used vehicle.