At FundingWay.com, from time to time, we have to update our online auto loan estimator to reflect changes in the economy and how much auto finance companies are willing to lend people with the following credit profiles:

Situation	Min. Credit Score
Good Credit	700
Fair Credit	625
Sub Prime Credit	575
Bad or No Score	525
Really Bad Credit	N/A

At the time of this writing, as the table below demonstrates online auto loan lenders are once again loosening up, and lending more money to people with all credit profiles, when compared to two years ago.

Situation	Min. Credit Score	2009 Amount	2012 Amount
Good Credit	700	$40,000	$45,000
Fair Credit	625	$30,000	$35,000
Sub Prime Credit	575	$25,000	$25,000
Bad or No Score	525	$20,000	$25,000
Really Bad Credit	N/A	$15,0000	$20,000

We're often asked how our car finance estimation tool works; it's actually quite simple. Every lending company determines the amount they will lend people based on their ability to repay the debt and their historical record of how they pay their creditors.

Ability to Repay the Debt

There are two ways in which automotive finance companies calculate your ability to repay the loan. One method is based on how much you earn. Another method is based on comparing how much you earn with how much you owe.Calculations using the "How Much You Earn" method are quite simple. As a rule of thumb, multiply you monthly pre-tax income by 15%. The result of this calculation would be the maximum monthly payment amount that a lender would approve you for. For example, if you earn $1,800 per month, you would be approved to buy a car with a monthly payment under $270 per month. A more popular calculation compares the previous calculated amount with your disposable income. In other words, they deduct your monthly debts, from your monthly income, compare this value with the other, and use the lesser of the two. As a rule of thumb, multiply your pre-tax income by 50%, and then subtract from the result your monthly obligations. For example, if your earn $1,800 per month and your monthly obligations are currently $650 per month, the lender would approve you to buy a car with a monthly payment under $250 per month. Items included in this calculation include payments for:

• Rent or Mortgage
• Auto Insurance
• Credit Card Payments
• Installment Loans
• Garnishments
• Child Support
• Alimony
• Student Loans
• Tax Liens

Historical Record of Paying Creditors

After determining how much you can afford to repay each month, it's time to calculate how much you can borrow. This amount is based on the Time Value of Money; the interest rate and the number of months to repay the loan. So that's how the FundingWay.com online auto loan estimator works. Tell us your credit score, how much you earn, and how much you owe. After that we'll estimate, online in real time, how much you can borrow.