Indirect Lending

Indirect lending is the process of applying for a loan from a bank, credit union, captive finance company or other lending institution through a car dealer. Instead of dealing directly with the bank, the applicant, in this example someone who is applying for credit to buy a vehicle, deals with the auto dealership finance department.

The finance department at the dealership takes the credit information from the customer and submits this information to the bank. Once a loan has been approved, the dealer finance department acts as an agent for the lending institution in the preparation, execution and submission of all loan-related documents.