Subprime Auto Loan

A subprime auto loan is financing for borrowers below the prime credit threshold, generally a credit score below 620 to 660. These loans carry higher rates, more restrictive terms, and sometimes require larger down payments or starter interrupt devices.

Subprime financing is a significant segment of the auto loan market. Dealers who work with subprime lenders need to understand each lender's underwriting criteria, stipulation requirements, and funding timelines. Strong subprime lender relationships are a competitive advantage in markets with a high concentration of credit-challenged buyers.