Score The Second: Steps To Apply For A Second Chance Auto LoanScore The Second: Steps To Apply For A Second Chance Auto Loan

You may think second chances are rare. However, nothing is ever set in stone and if you want, you can get a second chance at anything. If you are struggling from a bad credit situation due to a past loan, unemployment or any other reason, you may think that you do not have a chance at another car. You might have come across the term of second chance auto loan; and dismissed the idea as a fictional concept or a scam. However, a second chance car loan is your ticket to buying a vehicle even with your traumatic credit history.

Second Chance Car Financing: Nail it the Second Time

You may have a pile of rejected auto loan applications and you may have suffered from a bad credit history. However, the best solution is second chance car financing. The following types of second chance auto loans will give you a broad understanding of the loan and where you can avail them.

Make Use of Captive Financing

Often, the dealer that shows you the car will also be able to arrange financing for the car. Captive financing or in-house dealership financing is a way to secure your financing because the parameters of such financing options are less stringent. The one strong parameter that will drive an in-house car financing approval will be the amount of income that you earn. However, discuss whether the lender will report your captive auto loan. If he won't report it, it will not help you to improve your credit score and you can find yourself in the same position that you were before you applied for the auto loan.

Subprime Lenders

Subprime lenders work with dealerships to provide second chance auto loans and are willing to work beyond poor credit scores. Specific requirements such as stable income and employment, a minimum debt and address proof are required for the approval of the second chance auto loan from a subprime lender. Moreover, unlike an in-house car financing scenario, auto loans from subprime lenders will help you to improve your credit score.

The correct documentation will become very helpful to gain a faster approval. Adhere to the following steps to ensure that you are successful at achieving the auto loan for the second time.

1. A year-to-year income stub from your current employer. Many lenders who provide a second chance auto loan require a minimum income of $1500-$2000.

2. A valid driver’s license and a current utility bill for proof of address are requirements for a second chance auto loan.

3. You may also need to bring a cosigner and/or down payment to improve your approval chances.

Second, But Not the Least

A bad credit history does not necessarily mean that you cannot obtain your next car. The dream of achieving a car is very much a possibility with the help of second chance auto loans. Second chance auto loans want to help you break your cycle of bad credit and give you another chance. You can always look up online auto portals that will help you figure out dealers working with subprime lenders and captive financing dealerships.

by Adam Porter
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