Consumers who find themselves shopping for a new car need to be aware of the three different types of lenders that deal in auto loans in Nashville.

Customers need to understand how the car finance process works, which includes an understanding of the different kinds of lenders that are currently in business originating auto loans as well as where these loans are available – from the biggest franchised dealers to the smallest car lots.

Direct lenders are banks, credit unions and car finance companies that lend money directly to the customer. When applicants are approved for a loan from this type of lender, they can shop for a car like a cash buyer. It also means they don’t have to be concerned about whether or not a dealer can get them financed.

One of the disadvantages of direct lenders, however, is that most have stricter underwriting guidelines. This means that they don’t do a very good job of approving applicants with lower FICO scores that need car finance. Direct lenders may finance the following loan types:

Private party car finance – These are loans that will finance the purchase of a car from a private party. A number of f direct lenders that deal with consumers with the best credit scores will offer this option.

Franchised dealership car finance – These are loans that will finance the purchase of a vehicle from a dealer that holds a new car franchise (such as Chevrolet, Ford or Honda). All direct lenders that deal with prime Nashville auto loan customers will offer this option.

Independent dealership car finance – These are loans that will finance the purchase of a vehicle from an independent dealer that has no ties to a new car franchise. Most direct lenders that deal with prime car finance customers will offer this option.