Getting a subprime loan was something that almost anyone could do a little over three years ago. If you had a job that produced anything over $ 20,000 a year, you were guaranteed to qualify for a loan. Unfortunately, this is the number one reason we are in the current financial crisis. After receiving these loans, sometimes for more than $ 250,000, individuals could not pay them back. If you do not make enough in a month to make a mortgage payment, how is it possible that you are going to have enough to cover living expenses. With this knowledge of defaults on loans, subprime lenders are much more strict with their lending practices.
Is it still possible to get a subprime loan? Yes, it is possible to get a subprime loan, but things have drastically changed over the last two years. Now, many borrowers that were once considered prime are now classified as subprime borrowers. If you have a credit card interest rate of over 15% on all of your credit cards, you are most likely going to be considered a subprime borrower. I know this is information that is hard to swallow, but the lending industry has totally changed.
To get a subprime loan, you will need to have proof of a steady income and a credit report that is increasing in number rather than decreasing. If is also advisable that your total debt has decreased over the last six months. If this is not the case, it is likely that you will be turned down for a loan or you will pay ridiculously high rates and fees.