If you are in the market for a new car, you'll likely need to deal with auto finance companies to get the loan you need. There are different types of lenders that specialize in different credit situations. If you know where you stand as far as credit is concerned, you probably know which type of lender you'll likely to be dealing with.

The prime lenders are auto finance companies that primarily deal with the major dealerships. They will provide the best interest rates and usually only require the standard information that's usually required for most auto loans. To get the best rates or get approved, you need to have a good credit history. They may allow a few minor blemishes on your credit report but a low score or major items will be grounds for a rejection.

Many dealerships have a special finance division. This division deals with second tier or sub prime auto finance companies. They provide loans for people with low scores and negative items on their credit report. You will get a car from their dealership but you will pay a higher rate may need to provide additional paper work and proof of income. There is not much negotiating room so you won't get a great deal on the price of the car. You may also be required to get an extended warranty to protect the lender from default.

Auto financing companies provide financing to nearly everyone. There are lenders online that only provide credit to people with good credit but you'll find many companies that provide lending to all credit types. The process is easy because you fill out a short form online. Based on the information you provide, you can get an answer in a little as one minute. You'll be provided with the maximum loan amount, interest rate, and monthly payment.

Those with challenged credit histories may find it beneficial to shop for loans from online auto finance companies. By getting a pre approval, you know what price range you should be shopping. You don't need to worry about dealers manipulating numbers to arrive at your monthly payment. Your rate and monthly payment is already predetermined by the online auto finance companies. You just go the dealership and negotiate the best price of the car and drive away.