Special Finance Q&A

Q:

What Is Special Finance?

A:

A division of auto lending specializing in borrowers that do not have a good credit rating. Generally, these loans have a slightly higher interest rate than the interest rate offered to borrowers with a good credit rating because the lender accepts a higher risk of default.

Q:

There Are so Many “Bad Credit Auto Loan Dealers” to Choose From, How Do I Know Which One Is Best?

A:

Bad credit, Special Finance, Subprime auto loan dealerships basically use the same indirect lenders. By applying at multiple dealerships you could be creating duplicate applications being sent to the same lenders, thereby causing multiple credit reports being pulled on you by the very same auto finance companies for the purpose of obtaining only one loan. Choosing a dealership that you have confidence in and knowing they have your best interest at heart is your safest bet and will accomplish the same goal.

Q:

How Do I Know What My Credit Score Is?

A:

If you do not know what your credit score is the Fair Credit Reporting Act entitles you to a free copy of your credit report once every twelve months through annualcreditreport.com. We here at Red River Chevrolet highly encourage potential car buyers to read and be aware of what their credit report says in order to ensure there are no errors and that you are not being penalized for old information.

Q:

What Are the Minimum Requirements?

A:

There is not a clear, set-in-stone set of minimum guidelines for automotive lending. Most lenders utilize a scoring system that considers factors such as: • Credit report score • Time on job • Disposable income • Debt ratio • Loan amount vs. collateral value

Q:

I’m in Chapter 13 Bankruptcy. Can I Still Finance a Car?

A:

We recommend that you check with your Trustee first. The Trustee has to authorize any new debt while you are in the Chapter 13 bankruptcy. Some lenders may also require that your plan is at least 50% complete before you take on new debt obligations.

Q:

I Do Not Have a Down Payment. Can I Still Get Approved?

A:

There are no money down programs available, however your inventory choices may be more limited under these programs.

Q:

What if I Am Completing a Joint Auto Loan Application and My Co-Applicant’s Credit Is Worse than Mine?

A:

When completing the online auto loan application always remember the first applicant needs to have the strongest credit. However, the first applicant also needs to meet them minimum qualifications required by the lender. (See Question #2)

Q:

Will Inquiries Affect My Credit Score?

A:

It is a well-known fact that every creditor checks your credit history and places an inquiry on your credit report. Inquiries add up, which is often interpreted negatively by creditors. Inquiries can actually make an auto loan more difficult to obtain. More inquires – more tension.

Q:

What Documentation Will I Be Required to Provide?

A:

Proof of income, proof of residency, 3 references, Bankruptcy discharge paper or Trustee approval (if applicable)

Q:

What Kind of Inventory Do You Have?

A:

We have 175 pre-owned vehicles most of which have been traded for here at the dealership as well as over 500 new Chevrolets to choose from.

Q:

Why Should I Purchase a Car from Red River Chevrolet?

A:

Red River Chevrolet has been family owned and operated for 83 years. Recognized as one of the most reputable businesses in the Shreveport/Bossier area. Who better to trust your car buying needs and credit path to but a dealership that has 83 years of experience?

Proof of Income

Salary Applicants:

Must provide a current pay stub with year-to-date earnings.

Military:

Must provide a current Leave and Earnings Statement (LES).

Self Employed / 1099 Contractor:

Must provide most recent 2 years completed Federal tax returns including all schedules and or 3 months personal bank statements.

Non-Salary Income:

Must provide most recent 2 years completed Federal tax returns including all schedules.

Child Support:

Must provide court order signed by judge and proof of receipt for most recent 3 months.

Government / Retirement Benefits:

Must provide current benefit letter that verifies stated income for the term of the loan.

Bankruptcies:

Chapter 7: Must be discharged.

Chapter 13: Must be discharged. If bankruptcy is still open, the current plan schedule and authorization letter from the Trustee.

Residency:

One of the following: current utility bill, phone bill, bank statement or lease agreement for each applicant with physical address reflected.

References:

Name, address and phone number of 3 personal references for each borrower.

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Red River Chevrolet 32.5154, -93.7355.