Subprime auto loans make credit available to more and more people. In fact, almost half of all car loans made annually in the U.S. are to subprime borrowers. While carrying higher interest rates than prime loans, subprime auto loans are typically not hard to get.

Subprime auto loans are made to borrowers with FICO scores of less than 620. But don’t take a lender’s word for it. Find out for yourself if you are in the subprime range and why. Get a copy of your credit report from all three main credit bureaus: Equifax, Experian and TransUnion.

Make sure everything in your credit report is accurate. Write to the credit bureaus to correct any misinformation and, if you aren’t in a hurry, wait until your credit score is corrected before applying for a loan.

If you are in the poor credit loan category, you’ll be considered a high-risk borrower. Most banks and credit unions offer subprime loans to such borrowers and this could be your only recourse if you need a car and don’t have the cash to pay for it outright.

Beware of Predators There are dishonest lenders in the expanding subprime loan market. They often prey on the elderly, minorities, single mothers, unsophisticated consumers and low-income earners. The Center for Responsible Lending (www.responsiblelending.org) gives Seven Signs of Predatory Lending, which include:

• Prepayment Penalties -Car loans and mortgages shouldn’t include prepayment penalties. Usually hidden, these penalties can amount to significant cash that you shouldn’t have to pay when selling your auto or home.
• Mandatory Arbitration -Some lenders put pre-dispute, binding arbitration clauses into their contracts. Arbitration can involve costly fees, or designate an arbitrator that is favorably disposed to the lender.
• High Fees -This caution mostly applies to mortgages. Conventional lenders can add 1% - 4% of the loan amount in points and fees to the loan. Predatory lenders often charge up to twice as much.

Find out more about Subprime Auto Loans at BuyAAuto. You can get a free loan quote while you’re there. It’s the fastest way to see how much you might be able to borrow, and at what rate.