DETROIT, April 2 (UPI) -- U.S. car loan giant GMAC said it would lower finance charges and open up car loans to borrowers with lower credit scores to jump start vehicle purchases.
GMAC has target $5 billion for the next two months to entice more customers into buying autos, The Detroit News reported Thursday.
The lender, which lowered its minimum credit score for borrowers to 620 in December, said it would accept loan applications for borrowers whose score falls under 620, which generally designates subprime customers.
John McEleney, president of the National Automobile Dealers Association, told the News it was "very positive step." When GMAC raised its minimum credit score to 700 last October, analysts said it kept 40 percent of its potential customers from securing an automobile loan.
McEleney said lowering the minimum score "is going to help … dealers and make credit available to a wider range of customers."
GMAC also said it will stop demanding "curtailment" payments, which are payments dealerships have been required to make on their GMAC loans if their inventory doesn't move fast enough off of their lots.