According to a 2014 report, around 29% of all auto loans were subprime, and this number continues to rise with each year. Some skeptics say that this is bad news for auto loaners in the long run; despite the fact that there are now more subprime leads, these borrowers are thought to be more likely to make late payments or loan delinquencies. This isn’t necessarily true, but subprime auto leads typically represent a higher-risk loan due to poor credit histories.
That’s why it’s to your benefit that these potential subprime leads for car loans know some tips for securing the best possible subprime loan they can. When they follow these tips, they’ll be more likely to turn into viable borrowers and make payments on time. They’ll be more financially responsible, which is a huge advantage for lenders who don’t want to deal with delinquencies. With these tips, bad credit auto leads can turn into excellent customers — and by providing these helpful hints, you’ll likely have better auto finance lead generation on the whole.
Get your credit score and report
Any creditor is going to need access to a borrower’s credit score and credit report. It’s better for the borrower to get them, since this allows him or her to review them prior to applying for a loan. If the borrower finds a mistake, it should be disputed so that it won’t negatively affect whether he or she is approved for a loan. While subprime loans are available for those with poor credit scores, it’s still important to look these over to make sure everything is accurate.
Try to make a down payment in cash
You know what they say: cash is king. If at all possible, try to make your down payment — at least 20% of the total value, ideally — in cash. This larger down payment may even be able to get borrowers out of the subprime category, but regardless, it’s going to be much better than credit.
Don’t settle
Subprime leads for car loans are more common now, which means more organizations are offering these types of loans. New and used car dealerships, as well as banks and credit unions, offer subprime; that means you don’t have to settle for the first loan offer you get. While lenders may pressure you to accept the terms right away, it’s important to decide on the best arrangement for your needs.
Short term is better
When you see how low the monthly payments are on a loan that lasts for five or six years, you may be tempted to decide on that. But what you might not realize is that the interest really adds up over that long period of time. While the average borrower may get a loan interest rate of 4.16%, subprime loan interest rates can range anywhere from 13-18%, so it’s important to keep this in mind when making a decision on your loan terms. Ultimately, you’ll want to choose the loan term with the highest possible monthly payment you can afford (and therefore, the shortest amount of time you can manage).
Subprime borrowers shouldn’t wait to get a loan; these types of loans are hotter than ever before. As a lender, you need to appeal to potential subprime leads and stand out by offering them excellent service and showing that you care. At CyberLead, we can give you the tools you need to identify these leads for car loans. For more info, get in touch with us today.
