The Best Car Loans for Bad Credit September 2023
Chosen 5464 times
$5,000 - $50,000
Loan amount
1 Year - 5 Years
Term of loan
5.69% - 36%
Lowest rate
18
Minimum age
Chosen 2291 times
$9,000 - $60,000
Loan amount
2 Years - 7 Years
Term of loan
2.25% - 29.99%
Lowest rate
18
Minimum age
Chosen 77564 times
$500 - $35,000
Loan amount
6 Months - 5 Years
Term of loan
5.99% - 35.99%
Lowest rate
18
Minimum age
Chosen 4988 times
$600 - $50,000
Loan amount
1 Year - 5 Years
Term of loan
4.99% - 17.99%
Lowest rate
18
Minimum age
Chosen 160 times
$5,000 - $100,000
Loan amount
3 Months - 3 Years
Term of loan
8.49% - 21.24%
Lowest rate
18
Minimum age
Important
As seen in
How to Compare Car Loans for Bad Credit
What Is a Bad Credit Car Loan?
A bad credit car loan is an auto loan that allows you to borrow money even if you have a poor credit history. This means you don’t have to pay high interest rates and you can get approved for a lower amount than you would typically qualify for.
A bad credit auto loan is just a regular auto loan with some adjustments made based on your credit.
It means that it might come with a higher interest, but there are many lenders who are willing to work with you.
We list the best lenders that offer car loans for people with credit scores less than 619 and they all allow you to apply for car finance online in just a few minutes.
Lenders typically charge higher interest rates and sometimes more loan fees for a bad credit auto loan. They do this because they compensate for the added risk of borrowers who might not repay their loans.
You’re likely to find a lender who will approve a loan for you even if you have a bad credit score or no payment history.
Some online lenders or direct lenders offer loans specifically to people with bad credit, but usually at a very high rate.
The key is to look for the best loan at the lowest interest rate and a payment you can handle, so you can get the car you need, may payments on time and build your credit score.
You can also use a loan calculator to see how much you might pay across multiple auto loan offers.
Best Lenders for Car Loans for Bad Credit
Save money on your car loan by comparing with us first
Car Loans for People With Bad Credit: Types of Lenders
Bad-credit vehicle loans are provided by numerous different kinds of lenders.
Applying to multiple lenders is especially crucial if you have terrible credit. Different lenders have different standards, and some may be more flexible than others. Having numerous loan offers also gives you the opportunity to take the loan with the lowest rate to the dealership and request that the finance department attempt to beat it.
- Credit unions: Banks and credit unions are typically referred to as direct lenders and it is a good place to start. If you already have an account with a credit union, you may be able to get good rates.
- Online lenders: These lenders have faster application process and often have competitive loan rates to offer. It's easy to compare loans online and see car loan lenders side-by-side. See your loan rates above.
- Online car dealerships: Online dealerships like Carvana also offer financing to borrowers looking for an auto loan.
- Car dealerships: These dealerships also have access to bad credit auto loans and this is typically where most people go, as they may have existing relationships with the dealership, or they simply are unaware of the option of taking out a car loan online.
Comparing Bad Credit Auto Lenders
Check to see whether a certain lender makes more sense for you before applying - rather than applying to a random lender and crossing your fingers that you get approved.
For instance, not every lender accepts co-signers. So only submit an application to lenders who accept co-signers if you believe you might require one to be approved for a loan. Look for lenders without a credit history requirement if you have little or no credit history.
Ask the lender if they report payments to one or more of the three major credit agencies, TransUnion, Experian, and Equifax, if one of your aims is to build your credit with an auto loan. Future lenders will have access to your history of on-time car payments if you do this.
Look for lenders who let you pre-qualify for a loan with a soft credit check so that you can compare lenders and prices without having your already poor credit score affected. Pre-qualification is a useful tool for figuring out whether you'll be eligible for an auto loan at all.
Why Compare Personal Loans at Financer.com
Loans For Bad Credit Can Cost More
The interest rates of car loans for bad credit will generally be higher and so will the loan fees, compared to getting a car loan with excellent credit. Borrowers with bad credit or fair credit will pay more than those with excellent credit.
This is because borrowers with excellent credit are considered more creditworthy and are more likely to not default on their loan repayments.
A car loan that you pay off as an installment loan can improve your credit score over time. It demonstrates that you manage money well by juggling your income and debt ratio.
Steps to Improve Your Chances of Getting a Bad Credit Car Loan
If you’re concerned that you won’t get approved for a car loan with bad credit, there are steps you can take to improve your chances of approval.
Pre-qualify
Most online auto lenders will allow you to get preapproved for a loan through their online application process. They generally only conduct a soft credit check for preapproval, which will not damage your credit score any further.
Consider a cosigner
If you have a family member or close friend who is willing to co-sign a loan with you, it will increase your chance of approval. It may also give you a lower fee rate from the lender. This is because there are two incomes and personal guarantees held against one loan.
Improve your credit score
There are multiple ways for you to improve your bad credit to good credit over time. Auto lenders will always favor approval for good credit applicants over fair credit ones. Building your credit over 6 months may increase your chance of approval.
