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High Risk Auto Loans and Auto Loan LendersValley Auto Loans » Tips & Guides » Special Financing Options » High Risk Car Loans

High Risk Auto Loans: Overview

Easy Smartphone Application + Fast Approval Response + Low  APR For Bad Credit

Page Contents

High risk auto loans, designed to finance your car purchase and repair your high risk credit situation.

Valley Auto Loans Searches High Risk Lenders Who Can Help You

The need for “High risk car loans” can result from situations like job loss, divorce, defaulted loans and high unemployment rates. These situations can put a person on shaky ground when it comes to your credit rating.

This puts you in a high risk category for lenders to loan you money. Fortunately, when you start shopping for a new auto loan there are lenders for high risk auto loans out there who specialize in subprime auto loans.

Use A Loan Broker to Find The Correct High Risk Loans

Choosing a High Risk Car Loan Lender

You can use a loan broker like Valley Auto Loans to find high risk car loans for you.

They will connect you with the High Risk Auto Lenders that are right for you. These lenders provide good interest rates for loans to people with bad credit and are considered a bad risk for a car loan.

Valley Auto Loans will allow you to “apply on-line” for a new car loan. Alternatively, you can refinance the auto loan you already have.

With a car refinance loan for high risk borrowers, you can lower your monthly car payment and take cash out. You can use that cash for unexpected expenses like home repairs, down payment or pay off a debt that is pulling you down.

Many of our best high risk lending companies understand the risk involved with high risk loans and can offer lower interest rates to our buyers even if you have bad credit. Our lenders do not consider you a hopeless risk if you have the means pay back the loan on time.

Fill out our quick and simple car loan or car refinance application to get the money you need >>>

There is no application fees and no obligation.

On the flip side, some lenders and in house financing dealers may not have your best interest in mind and the wrong type of lender could even damage your credit further.

Understanding how these high risk lending banks operate and what they look for in a borrower can go a long way towards securing an auto loan for you without placing your financial future at risk.

High Risk LendersLending money, in and of itself, entails taking the risk of not being paid back whether dealing with a low risk or high risk borrowers.

Many lenders are not willing to take the risk of lending to someone with a low credit score regardless of their ability to pay the secured loan back because of the risk associated with the high risk auto loans.

Protecting their interests means doing the necessary credit check as well as tracking and rating any negative or positive habits that appear in a person’s credit history. This needed information helps to decide whether or not a person is an acceptable risk for an auto loan.

Another way high risk car loan companies protect their interests is by using the car itself as a form of collateral like collateral used for a personal loan. In the event a borrower stops paying on the car, the lender reserves the right to repossess it.

Making certain borrowers earn enough income to afford a particular car is another way lenders protect their interests. Fortunately, most people who find themselves in need of a sub-prime auto loan will repay the high risk credit loan. This is why bad credit lenders take the chances they do.

High Risk Loans: Approval Criteria

  • Applicant must be 18 years of age
  • You must be currently a resident of US or Canada and a legal citizen
  • You must have full time or fixed employment with at least a gross income between $1,500 and $1,800 a month
  • In most cases you must have held a job for a minimum of one year
  • It is not important to have a high credit score because high risk lenders look closer at your ability to pay back the loan instead of your past credit history

Requirements for high risk loans differ from lender to lender.

High Risk Loans Approval CriteriaWhile requirements differ from lender to lender, there are general requirements that Valley Auto Loans has in place for applicants.

What separates traditional lenders from high risk auto loan lenders has to do with the type of criteria borrowers must meet.

  • Most conventional car loan lenders require that applicants have been on their jobs for at least a year to be approved for sub-prime types of loans.
  • Traditional lenders and some of the more forgiving lenders rely heavily on a person’s credit score to decide the risk of the investment.

You can see how this would be difficult for a college student or other young person who would not have a credit score required for car loan approval. Their credit score would not correctly define their ability to pay back an auto loan on time.

Credit scores provide lenders with an overall view of a person’s financial history.

Most conventional lenders will refuse to lend to someone with a score below 540. They consider borrowers with this low of a score have most likely built up a history of charge-offs, late payments, and repossession. At this point, borrowers fall within the “no credit” category and fail to get the high risk auto financing they need. They will turn to alternative resources like an auto loan cosigner or buy a cheaper, low-quality car.

Finding a car loan cosigner can be difficult if the person willing to cosign doesn’t meet the auto loan cosigner requirements.

Lenders worry about default and the risk that you stop paying back the loan at some point. This does not change a person’s need for a dependable vehicle.

You may have been in an accident that totaled your car and at the time, you were not planning on buying a car or getting a loan. Now you need to replace the car, and you do not have the credit needed to qualify for a loan.

With high risk auto loan lenders, no credit financing is common. Though strict conditions apply for auto loan approval, bad credit lenders adjust their conditions to favor bad credit auto loans and low-income families.

Lenders may request a minimum down payment amount of up to 20 percent. Most high risk finance companies will charge a high interest rate due to the high risk nature of the loan.

Just remember that these loans are meant to be temporary. Keep it long enough to improve your credit rating, then refinance the loan with a better APR.

Some car dealerships/ lenders operate as “Buy Here Pay Here” establishments and handle their financing. These high risk loan companies pretty much answer to no one as far as financing institutions and credit bureaus go. Borrowers may be at considerable risk of buying poor quality cars and getting a bad auto loan.

Choosing High Risk Lenders

When shopping for high risk auto loans and high risk personal loans, high risk borrowers have to be especially careful in choosing a lender.

Some lenders specializing in subprime auto loans attempt to take advantage of prospective borrowers by offering high-interest rates or longer monthly payments if your credit is bad.

Ultimately, borrowers end up paying way too much for way too long on a car loan. This is where secure online quote comparisons and online auto loan calculators can come in.

You can check our resources page for information about our EMI calculator and how it can help with your car loan purchase.

For financing purposes, credit unions are another way to go since they cater to their customers and often can offer the most competitive rates. Most credit unions will offer their members high risk loans for people with bad credit better rates and are more likely to look past your credit history than a traditional lender.

Credible High Risk Lenders

Finding a trustworthy, credible high risk lender is a matter of doing a little research and asking the right questions.

Your lender or another high risk lender should have the best interests of their customers at heart. That is why they look more closely at your steady work income instead of you credit score. By taking this approach reputable high risk lenders get repeat business from customers sharing what they have discovered with others.

Legitimate lenders are listed with the Better Business Bureau along with other consumer advocacy organizations.

An excellent resource for finding reputable bad credit lenders is ValleyAutoLoan.com. ValleyAutoLoan offers a network of affiliated lenders and dealerships from which to choose. We do all the searching for you, finding the best lender for your auto credit needs.

Borrowers can pull up required information on each lender using a quick and easy search tool. This process makes finding refinance lenders and loans easy with all the needed information at your fingertips.

High Risk Auto Loan Tips

  1. Know where your credit stands
  2. Have a better understanding of how to buy a new car
  3. Fill out the application paperwork completely


Getting The Best Auto Loan Deal

Know Where Your Credit Stands

First and foremost, before rushing out to get a loan, you should know your credit score and how it stacks up against the competition.

Car dealers can take advantage of someone who does not know their correct credit score. Check our resource page to find out how to get a “free” credit score. This is one of the tools needed to go to the high risk auto loan lenders and get the best rate for your situation.

On the other hand, if your score is truly horrendous, you may want to reconsider the auto loan,( below 525). You should clean up your report, build a simple budget, pay off bills and get a good standing with your current credits first.

Before You Head Out To A Car Lot To Look At Cars

You need to have a better understanding of how to buy a new car without getting ripped off. With our help, you can find a good deal on a bad credit auto loan and shop for the right car at the right price.

Our resource page also has “New” and “Used Car Buyers Guides” with valuable tips on negotiating with dealers to get the best deal. The New Car Buyers Guide has a quick formula to decide the best price to offer during your negotiation with the car dealer.

Avoid variable rate loans. Personal loans and other loans with variable rates are usually offered with a low-interest rate to entice the borrower.

Fill Out The Car Loan Application Completely

Applying for an auto loan on-line has the benefit of allowing you more time to complete the paperwork. You can be at ease in your home and take the time you need to complete the application.

Our application is easy to fill out from any smartphone or mobile device as well.

The lending institution will quote your loan based on this information, so it is important you double-check all fields to see they are correct before submitting it. If you are self employed, you will need to show your income with your income tax or 1099. You must also show the loan amount you are looking for, even if you are pre-qualifying.

If you are applying to refinance your car and you want cash back, make sure you show the total loan amount for your loan request. To get the most out of the experience, you should give accurate information about employment and residence as well as possible.

It is best to get pre-approved online before you go to the dealer or fill out an application over the phone with assistance from our phone operators. If you have a side income, child support or some other form of monthly income, you should total this as income on your application.

Personal Budgeting

Bad credit auto loans can serve two purposes:

Start with building a “Simple Personal Budget” to pay your bills and see what monthly payments you can afford.

Figure in car expenses such as regular maintenance and fuel costs. This will help you understand your ability to pay back the loan as well as your other commitments.

Online car finance calculators can be a great help when figuring how much you can afford towards a car loan. Consumers should know that saving up even a small down payment can help lower rates and improve payment terms.

Give A Down Payment

With high risk auto loans, some loan officers are unlikely to give out at loan to a person in a horrible financial situation and no cash upfront. You should try to give a down payment on your purchase. To do this, you should try to save $500 a month for a few months. Then, when talking to the loan officer, you can mention that you will put a couple of thousand dollars on the car.

Our “Simple Budget” can show you how to get extra money out of your paycheck.

Without a doubt, when doing this wisely, you can get a great deal on your loan. Not only that, with a proper down payment, you are unlikely to end up with financial problems in the future.

However, if this is not an option at this time, ValleyAutoLoan.com can offer no down payment loans, if this is a better fit for your needs. You should check all options before taking a loan without paying a down payment.

Be Flexible

When you have a poor credit score and want to get a car, you may have to be flexible on your purchase. You may need to provide a higher down payment with high risk loans. In other cases, you may have to take on a longer loan to meet the terms.

At the same time, you should not accept any car deal offered. Instead, you should understand it is wise to find a good deal and avoid giving a massive down payment or getting an extended auto loan.

Apply for your loan first, and then pick the car that matches the loan amount. You can get a great deal on your loan and walk out with the car of your choice.

Temper Your Expectations

If you have bad credit, you will have a hard time getting a luxury car or high-end sports car approved. While this is true, with a low credit score, it is still possible to get a low rate on a great car. For example, by looking at simplistic mid-sized vehicles, you can get a great deal and enjoy something that will not kill your monthly cash flow. You can buy an inexpensive car offering safety and reliability.

Get A Cosigner

High Risk Auto Loan CosignerIf you have poor credit and a sub 550 credit score, you may want to consider other options. Of course, one great way to land a car loan is to ask a friend or family member to co-sign.

When doing so, you can get great rates, especially if they also have a high score. To do this, you should talk to your friend and mention your situation.

You can avoid a significant amount of problems getting qualified for your loan with a cosigner. While doing this, you must agree that you will have no issue in repaying the loan. Otherwise, if you are not honest or make a mistake, you may end up causing problems in your relationship. Simply put, this should be done as a last resort.

Clean Up Your Credit

If getting a high risk car loan with bad credit and no cosigner is your only option, you may want to consider cleaning up your credit score. If you have an extremely low one, you will have a hard time getting a loan. If you have charge-offs and other negatives, you will have a nearly impossible time getting a loan you can afford.

To fix your credit, you should call your creditors and work on a payment plan. Other times, if you have some money, you can offer a lump sum payment to pay off your debt.

If you have several credit cards that are near their credit limit, you could try to get your credit card company to raise your credit limit on those cards. If they do, your credit score will automatically go up.

Of course, if your situation is harder to fix, you may want to contact a professional who can help you clean your credit. Sometimes, there might be mistakes on your report, and you can resolve the problem by calling the bureaus and removing incorrect items on the report.

With better credit in the future, you can at least, apply online to refinance your auto loan with high risk lenders and get a better deal.

High Risk Auto Refinancing

Refinance-Car-Loan-After-BankruptcyApplying for a high risk refinance auto loan may seem like a strange concept to many.

If you are already having trouble saving funds with the original loan, why start from scratch with an entirely new loan? Won’t your money problems get worse?

Think Outside the High Risk Loan box.

When you apply for high risk auto refinancing, the exact opposite happens. You are giving yourself a break by re-negotiating the terms of your first auto loan, and you be able to lower your payments.

If you choose to work with Valley Auto Loans, who provides auto refinancing for poor credit to those of high risk, you can reduce your interest percentage and monthly payment amount significantly. They have a knack for getting funds for applicants with less than perfect credit who are incapable of receiving loans.

High Risk Loan Refinance Lenders

High risk refinance lenders offering car loans to drivers with terrible credit problems can help.
Because of the challenging economy, huge groups of people are struggling to keep up with basic expenses. Many of these individuals maxed out several credit cards just to maintain their lifestyle. If these people could not pay off their credit cards promptly.
They either went into consumer debt, or
They filed bankruptcy to remove the debt.

Both scenarios can put a negative mark on an individual’s credit history for several years. Bankruptcies last for seven to ten years on average. Once these marks reach your credit reports, they are difficult to remove even if you settle the debt on a later date. It is a terrible situation to live through. It would be ideal if these marks went away after you paid these debts in full.

Unfortunately, they do not, which means the debt can still affect you negatively even after you clear it.

No lender will want to work with you unless they truly understand what you are going through. The only lenders who may be sympathetic towards these situations are high risk auto re-financiers.

Alternative Lenders

These alternative lenders are serving a group of people who were left out of the traditional lending process. In addition to rewards from obtaining mass amounts of business, they also get to help unfortunate people who need immediate help to get a secured loan.

Through second-chance financing opportunities, these lenders can provide assistance in one of two ways.

  • They can find funds for men or women who do not qualify for bank loans.
  • They can refinance an existing loan that has a high-interest rate.

It is nearly impossible to receive a bad credit auto loan for an interest rate that drops below 20%. The average bad credit lender will take advantage of their borrowers because they know the person may have no other options.

Luckily, this misconception is false because companies such as Valley Auto Loans are giving quality options to desperate borrowers. They can help a person save thousands over time just by reducing this 20% rate by a few percentage points.

Have Your Info Ready to Refinance Your Car Loan

You will need to provide some personal information to shift your current loan to your new financier. You will need to present all information from your current lenders, such as your contract, your monthly payment information, vehicle mileage, and any other information that may be pertinent to the loan.

In certain cases, you may need to pull your free credit report from one of the three giants or credit reporting agencies known as Experian, Equifax, and TransUnion.

Your new high risk auto refinancing provider will go to your original lender and negotiate a term of release on your behalf. This is not a general shift of ownership like you may find in the mortgage lending world with these types of loans. Your new refinance lender is taking control of your loan for the purpose of giving you an advantage.

Some of you may be wondering how this high risk car refinance is beneficial to you in the short-term. Can this deal put immediate funds in your pocket so you can start the money-saving process?

The answer is yes. However, it depends on how much equity you have in your current vehicle. Any bad credit refinance with cash back can put money in your pocket. You stand to receive a higher amount if you had your car for at least eight months or longer. The costs you can save in the long-term through high risk auto refinancing will vary with lending institutions, interest rates, and loan duration.

This does not negate the fact that your interest rate will drop significantly. We can use approximate values offered by Valleyautoloan.com to get a better understanding of how the savings will transpire. These rates could change at any time, but they will always be less than the bad credit standard of 20%

High Risk Auto Loan Interest Rates

For high risk auto refinance loan amounts between $7,000 and up:

  • 36-month leases will have interest rates of about 3.65%
  • 37 – 48-month leases will have interest rates of about 3.65%
  • 49 – 60-month leases will have interest rates of about 3.25%
  • 61 – 72-month leases will have interest rates of about 3.50%
  • 73 – 84-month leases will have interest rates of about 3.65%

What does this mean in dollar value?

An individual with a $10,000 loan will have an interest rate of 20% with an ordinary lender, which adds up to $2,000 per year.

With ValleyAutoLoan.com, this same dollar amount will have a rate of 3.65%. This adds up to $365 per year versus a couple of thousand. The difference is $1,270 per year, which is a very hefty sum. Over a 60 month period, this $1,270 will turn into $6,350 in savings.

It is best to apply with a refinance company that deals with high risk borrowers.

  • Prepare yourself to collect personal and relevant information such as proof of income
  • The remaining balance of the current loan
  • The title if possible.

Once you qualify for refinancing, you can prepare yourself for the significant amount of savings you will receive.

Co-signing & Co-signers

Being a co-signer can be dangerous, especially when dealing with sub-prime credit and high risk car loans.

It can also be the only option in some situations with not so good credit, so is it a good idea?

Before anyone agrees to become a co-signer on someone else’s high risk car loans, he or she need to know as much as possible about the situation. They also need to know about everything that could affect them personally when it comes to signing on high risk car loans for someone else.

We at Valley Auto Loans understand high risk car loans, and we make it our mission to ensure that everyone is fully informed before taking on such responsibilities.

In some cases, a loan applicant can be denied for high risk car loans due to their poor credit. In this case, a person with good credit must become a co-borrower and step in to offer their credit as an alternative. I most cases this type of loan will not help the borrower to re-establish good credit.

Those with good credit can usually qualify and be entered into to the finance contract in either of two ways: as a co-buyer, or a co-signer for a person with bad credit.

It is also easier to be approved as a co-signer if you are closely related to the primary borrower. For example, spouses are almost always approved when it comes to high risk auto lenders.

Similarities For Co-Signing & Co-Borrowing

  • Both types are responsible for the loan and are considered co-buyers, with the car buyer. If the primary borrower fails to meet the loan requirements, co-buyers and co-signers then must make the loan payments.
  • Both types must place their signature on the loan contract.
  • Along with the primary borrower, both types can be sent to a collection agent if the loan goes unpaid.
  • The lenders for high risk car loans will review the credit of both the borrower and co-borrower.

Differences For Co-Signing & Co-Borrowing

  • Lenders name a co-borrower as either a co-signer or a co-buyer based upon their income compared to the primary borrower.
  • A co-buyers income amount can be added to the primary buyer’s if their income is not high enough to qualify them for a certain loan.
  • A cosigner’s income cannot be added to the main buyer’s. Instead, both parties’ incomes must qualify separately.

Co-Borrower Responsibilities

For those considering becoming a co-borrower, consider these facts:

  1. Co-borrowers bear full responsibility for the loan in the event that the primary borrower fails to follow the loan’s requirements.
  2. Co-borrower’s credit can be lowered if the loan has a negative result, (Failure to make payments or other contract breaches).
  3. If you also fail to meet the requirements of the contract, it can significantly damage your credit.
  4. The amount of the high risk auto loan will go on the cosigners debt to income ratio. Keep this in mind if you are thinking of cosigning a loan and you may soon need a loan of your own soon.

We at Valley Auto Loans want you to know that even those with bad credit can be approved for high risk car loans instantly. If co-borrowing or needing a co-borrower is a risky deal for you, we can help.

Apply for a loan from Valley Auto Loans today and see just how easy it is to gain a loan, even with bad credit.

Next Steps for High Risk Loans

Consumers with a high credit score and good credit history usually qualify for car loans without facing any serious difficulties. However, the entire structure of the auto lending system is designed in a way that can very easily disappoint those with poor credit.

Don’t be disappointed if you have been turned down before. People with credit problems can take several corrective measures to increase their chances for approval in the future.

Our efficient auto loan approval system has helped thousands of credit challenged consumers to qualify for their auto loans with excellent interest rates.

Finding Dealers to Work With

Valley Auto Loans can be your ideal online place to start looking for hassle free auto loans that satisfies all your needs. We are the number one auto loan service provider in the country with a specialized service for poor credit consumers.

Apply today and qualify for your auto loan within just 60 seconds. If you are thinking about high mileage auto loans to save money, many of our lenders will not lend money on older cars with high mileage if the loan will put you upside down on the equity in the car. High mileage car loans are known for leaving the buyer with a car that cost them more than the car is worth.


According to Experian and Trans Union (two of the three big reporting agencies), as of July 2013, the average FICO score in the U.S. was 648. They also go on to say that more than 50 percent of the population have one or more dings on their credit reports.

Your credit score is a numerical reflection of your entire credit profile. Getting an auto loan financed if your credit score is low can be very difficult. The three credit reporting agencies (Equifax, Experian, TransUnion) have a “secret formula” for calculating this number.

Risk levels are described in ranges. Let’s look at how the reporting agencies and high risk loan companies rate each range:

  • 726 – 850 Very Low Risk
  • 700 – 725 Low Risk
  • 626 – 699 Medium Risk
  • 551 – 625 High Risk
  • 350 – 550 Very High Risk

So, it is easy to see that anyone with a score below 626 is considered high risk.

Does your credit score show you are a high risk?

70 percent of the people do not know their credit rating, so you are not alone. Knowing your credit score is helpful. What if your credit score is 540? You are only 10 points away from the next higher bracket. While you are here why don’t you get your credit score for free? Check our resource page to find your free credit score facts.

High Risk Auto Loan Lenders

You will find that banks and traditional institutions are not good high risk auto loan lenders for extremely risky borrowers.

high risk car loan lendersAt Valley Auto Loans, we have a network of lenders that specialize in high risk auto loans. We have helped thousands of customers with credit challenges, who came to us dejected and frustrated because they were having trouble getting a car loan. With a 100 percent acceptance rate, we were able to get these bad credit customers the loan they needed.

Here’s the problem with doing it yourself – you can damage your credit even further, and it takes time.

When you put in application after application with each lender, you activate an inquiry against your credit file. Too many inquiries in a short time frame can negatively impact your score; unknowingly, you can hurt your credit score even more by doing this.

At Valley Auto Loans, we send your application to our loan network center to find the best car loan for your needs among our group of prime auto loan lenders. After review, the bank chosen will run your credit check once, which only activates one inquiry.

Our approval process gives you the benefit of having your application reviewed many times with lenders competing for your business, with only one credit check.

Making An Informed Decision

You need to make an informed decision.

We believe in providing you with all aspects of high risk lending. Even though we have a high success rate in getting loans for high risk customers. There are still some things you should know.

Interest rates will be higher. Looking at it from the lender’s point of view high risk is offset by higher interest rates.

Down payments can be a bit higher. This is not carved in stone, but the lender will usually require larger down payment (10-30 percent) compared to lower risk customers.

Even among high risk loan lenders, there’s competition. Since we have a network of lenders, we can help all our high risk customers qualify for the best rates for a car loan and terms the market has to offer.

Valley Auto Loans

Valley Auto Loans works hard to supply you with the best auto financing for bad credit.

Buying a car should be a great experience for anyone, regardless of your credit. Let us help you make buying your next car a stress-free and smooth experience by filling out our high risk auto loan application today!

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