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[edit] Subprime Lenders Target Consumers Based on Risk

National and regional lenders have emerged to service the very competitive bad credit car loan market referred to as the “Special Finance” or “Sub-prime” market. These lenders have further divided the “Special Finance” market up into different levels of risks to such an extent that there are lender’s who has specifically targeted the most credit challenged consumer with the highest risk.

[edit] How High Risk Lenders Promise 100% Approval Rate

Lenders who target consumers with the most challenged credit will market their ability to get anyone approved and they can. These lenders will get anyone approved regardless of their credit score if they are able to meet the specified conditions such as a down payment or a co-signer. The more credit distressed the consumer the higher the down payment or the higher credit score of the proposed co-signer. Using this method high risk lenders are able to qualify any lender regardless of their credit history.

[edit] The Cost of A Subprime Loan

Subprime lender charges a high interest rate for high risk borrowers. The poorer the credit the higher the interest rate. While this can be predatory there are some lenders who offer programs to their customer where there interest rate will drop after 12 months of on time payment.Car Loans Canada