Subprime Auto Loans Explained

Subprime auto loans in the U.S. are for borrowers with lower credit scores—they come with higher APRs and sometimes stricter terms. Here's subprime auto loans explained and how to shop so you don't overpay.

TL;DR Subprime = lower credit (often below 660); higher APR; sometimes higher down payment or shorter term. Shop multiple lenders—banks, credit unions, dealer-arranged—to get the best rate for your tier. Agree on OTD first. Use autopremo.com OTD calculator and payment calculator. Use autopremo.com.

What Subprime Means

Subprime = lender sees higher risk (lower score, thin file, or past issues). They charge higher APR to compensate. Terms may require higher down payment or shorter term. Use autopremo.com payment calculator to see payment at your rate. Get your numbers at autopremo.com.

Shop Multiple Lenders

Rates vary by lender. Shop banks, credit unions, and dealer-arranged subprime lenders—compare APR and terms. Agree on OTD first so you're not overpaying for the car on top of high rate. Use autopremo.com OTD calculator. See OTD at autopremo.com.

Improve Score and Refinance Later

If you can, improve your score before you buy. If you already have a subprime loan, refinance when your score improves and rates allow—use autopremo.com refinance calculator. Check at autopremo.com.

Bottom Line

Subprime auto loans = higher APR for lower credit. Shop lenders; agree on OTD first; use autopremo.com OTD calculator and payment calculator so you don't overpay.