Banks are once again beginning to issue lines of credit to customers with bad credit histories.  Subprime borrowers are seeing credit  easing in the subprime auto loan arena as banks and lenders realize that subprime borrowers offer a large, currently untapped consumer base that has been under-served for many years.  Banks are always searching for new customers, and by going after subprime borrowers, the banks are demonstrating their efforts to grow their lending platform by providing loan opportunities to more consumers.

New Rules & Regulations

Many banks have seen their revenue pipelines dwindle as newly enacted rules and regulations have severely limited the amount of fees and penalties that banks can assess on their clients.  The biggest and most impactful of the recent rule changes include regulations on when and if banks are able to charge over-draft fees as well as strict limitations on the fees they are able to collect from credit card merchants.  Both of these regulations have been revenue killers for the banks.

Easing of Lending Guidelines

For most banks, increasing revenue in the current economic environment of low growth and heavy regulation has become increasingly difficult.  As a result, it is no real surprise that banks and auto finance companies are looking to widen their scope of business as they search for new borrowers.  They have realized that people with bad credit, while riskier to finance, can in fact be good customers.  Banks have also begun to recognize that subprime auto loans were not the reason that the market ran into past trouble; it was lending to them without so much as verifying their employment, income, and assets.  With a little more diligence and attentiveness, lenders are finding they can finance people with poor credit and this can be good for business.

Auto lending companies such as BlueSky Auto Finance are fully integrated with banks and lenders who specialize in providing auto loans for people with bad and/or no credit.  When you apply for financing through the BlueSky website, you will be notified immediately if you have been approved for an auto loan.  For more information on how the application process works and to apply, click here.