Bad Credit Auto Loans in Phenix City (AL)

At Alabama Auto Finance, we pride ourselves on getting our customers approved for financing with no fees, no headaches, and no obligations. Our vast network of Alabama dealers and lenders is standing by, waiting for your application. Submit your application, and the dealers and lenders in our network compete to fund your loan. Once your application has been placed with a dealer, a finance professional will contact you via phone to walk you through the rest of the process, including such details as your interest rate (APR), down payment, repayment terms, and vehicle availability. Truly, there’s no better way to buy a car in “The Hub City,” especially if your credit isn’t perfect.

Phenix City Bad Credit Car Dealers

Phenix_City_ALCredit problems? You aren’t alone. Up to one quarter of Phenix City’s population over the age of 18 has “bad credit,” meaning a score of 620 or lower. A history of bad credit is often a challenge when trying to finance a new vehicle, but not with us. There are several main credit tiers in the auto finance industry, and we have companies that service each of them. Going from bank to bank or lender to lender, submitting applications, is a time-consuming, often frustrating process. We handle this part of the process for you, matching you to a dealer or lender who knows they can get you financed, based on your income, location, credit profile, and other criteria.

Considerations for Financing Success

There are a few extra things to consider when financing a car with bad credit, however. Firstly, many finance companies want individuals with less-than-perfect credit to provide a down payment of at least $500. If you can provide 10-20% of the vehicle’s purchase price, that’s even better. Secondly, your interest rate will be quite high based on your credit, so it’s that much more important to be conservative when choosing 1) a car, and 2) a monthly payment amount. Below we’ve listed some great rules of thumb:

  • Car Payment:  should amount to no more than 5-10% of your monthly income.
  • Finance Term:  should be the shortest length you can manage, while keeping your car payment in budget.
  • Down Payment:  should be at least 10% of vehicle purchase price, if possible, when buying pre-owned.

Fortunately, people who apply through us receive their approval nearly instantly. And, keep in mind, paying off an auto loan will boost your credit score. So let us find you a lender or dealership that approves loans for people in Phenix City with subprime credit.

Buy Here Pay Here Car Lots in Phenix City

This type of financing is also referred to as tote the note, your job is your credit, no credit check, or in house financing. These dealerships finance people that wouldn’t be approved any place else because of problematic credit. The loan rates are typically expensive, but approval is often guaranteed. However, most of these car lots aren’t able to help customers re-establish their credit. More often than not, it is best to apply online through our website, so we can find you an auto loan in Phenix City with lower rates and better terms.

FICO Score and Loan Size

The table that follows depicts a wide array of loan amounts, given a monthly income of $2,050, the average in Phenix City. These amounts are only estimates. You may qualify for a larger or smaller sum, depending on other factors. Talk with a vehicle finance specialist to find out more.

Credit Income Factor Loan Amount
Great Credit 10 $20,500
Decent Credit 9 $18,450
Subprime Credit 8 $16,400
Bad Credit 7 $14,350
Really Bad Credit 6 $12,300

Just because you can borrow such an amount, doesn’t mean it’s a good idea. A smaller loan is highly recommended, because you will pay less interest, and your payment amount will be reduced.

Down Payment and Loan-to-Value Ratio

Good credit? If so, you might not need to provide a down payment. If you have weak credit, however, your dealer may require you to supply a down payment. When dealing with subprime credit, lenders are interested in the Loan-to-Value Ratio, or LTV. This is the amount of the loan versus the wholesale value of the vehicle.

Amount Borrowed Vehicle Value Loan-to-Value
$7500 $10,000 75%
$12,000 $15,000 80%
$15,000 $17,500 86%
$15,000 $20,000 75%
$17,500 $22,000 79%
$20,000 $25,000 80%
$20,000 $30,000 67%

Bad credit car dealers in Phenix City and across Alabama often strive for an LTV of around 70%. With that being said, we get many clients approved for financing without a down payment.

Our application placement system can often help you find a lender or dealer who wants to get you behind the wheel, whether you have a down payment or not.

Credit and Income: Phenix City

Phenix City, located as it is just west of Columbus, GA, has been ranked as the nation’s best affordable suburb by Businessweek.  Listed below are some average statistics for Phenix City residents.

  • Gross Earnings: $24,605 Per Year
  • Average Monthly Payment: $226 (11% of Income)
  • Recommended Car Payment: $164 to $205 (8%-10% of Income)

Consumer Credit in Phenix City

Here we have a breakdown of Phenix City’s population by credit rating. These estimates should give you an idea of where you stand.

FICO Score % of Population Residents
300-499 2% 988
500-549 5% 2,471
550-599 8% 3,953
600-649 12% 5,930
650-699 15% 7,412
700-749 18% 8,895
750-799 27% 13,342
800-850 13% 6,424

Please note that we also serve the nearby hub of Columbus, Georgia, through a partner of ours, Georgia Auto Finance.