A subprime loan is designed for borrowers who do not qualify for a conventional prime loan. If you can’t qualify for a prime mortgage due to insufficient credit, little or no down payment, or the inability to prove your income, then you may be eligible for a subprime loan. To apply for a subprime loan, follow these steps:
Research subprime lenders
Subprime loans are most commonly offered by private lenders. Research credible subprime lenders and contact them about their lending programs, rates and fees. Athas Capital Group, for instance, is one of the leading subprime lenders in the country, prized for its transparent programs, quick closings, and reliable service.
Gather your financial documents
Collect and make copies of the financial documents a lender will need to verify your income, employment status, and creditworthiness, including your most recent paychecks, federal income tax return, bank account statements, and credit card bills. To get a more favorable interest rate, you want to show that you are capable of making payments in a timely fashion. Therefore, you’ll want to include other regular bills with on-time payments, such as a car or student loan statement. Once you’ve gathered the necessary documentation, submit the copies to the lender.
Submit a loan application
Complete the lender’s loan application, and give the lender permission to pull your credit.
Review the loan terms
If the lender approves your application, review the loan terms offered to you, including the interest rate and repayment period. Make sure you are comfortable with the terms before signing. Keep in mind that interest rates are higher for subprime loans than prime loans due to the higher risks involved.