Have bad credit and need a car loan? These are your options.

How to finance your car with less-than-perfect credit.

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Got car loans? You might have trouble financing a new car, though you aren’t totally without options. In fact, some lenders specialize if offering poor credit loans. But watch out — these often charge higher interest rates and fees. You also might need a cosigner to be approved.

CarsFast Car Loans

  • Min. Loan Amount: $500
  • Max. Loan Amount: $75,000
  • Interest Rate: 4.90% to 29.90%
  • Loan Term: 12 months - 8 years
  • Choose from thousands of vehicles
  • Multiple financing options
  • Pre-approval in 60 seconds
  • Vehicle delivery to your door

CarsFast Car Loans

Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.

  • Min. Loan Amount: $500
  • Max. Loan Amount: $75,000
  • Interest Rate: 4.90% to 29.90%
  • Loan Term: 12 months - 8 years
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Compare bad credit car loans

Name Product Min. Loan Amount Interest Rate Fees Loan Term Min. Credit Score
LoanConnect Car Loans
$500
1.90% to 46.96%
Varies by lender, loan type and province
6-60 months
550
Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.
CarsFast Car Loans
$500
4.90% to 29.90%
Varies by lender, loan type and province
12 months - 8 years
300
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.
Auto Arriba Car Loans
$3,500
8.99% to 29.50%
Contract fee of $499.00
6-84 months
N/A
Auto Arriba offers car loans starting at $3,500 up to $100,000, with as little as a 30 minute loan turnaround time. On a limited number of approved loans, Auto Arriba is currently offering a rebate of the amount of your first scheduled payment 30 days after it has been processed up to a maximum of $500.
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How to get a car loan with bad credit

Getting a car loan with bad credit is a lot like getting an ordinary car loan. However, you might have to work a little harder to find the best deal.

  • Check your credit report. A mistake on your credit report can cost you points on your credit score. You can get a copy of your credit report for free and fix mistakes by contacting the creditor.
  • Compare, compare, compare. Using a connection service that specializes in bad credit financing can help you quickly get an idea of what rates you’re eligible for, but you might not want to just stick to one — many of these are limited to their network of partners.
  • Read the fine print. Many provinces have limits on car loan APRs, and some bad credit lenders try to sneak around these by tacking over-priced extras onto the contract.
  • Ask an expert. Worried you won’t qualify? Sign up for a credit counseling session to have an expert guide you through your options. Click here to visit the Government of Canada’s website where you can find a legit credit counselor who can help you get your finances back on track.

Bad credit commodore7 questions to ask about bad credit car loans

Before you apply for any loan, find out as much as you can about the offer you’re getting. Ask yourself these questions before you apply.

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Mistakes to avoid with a bad credit car loan

Make sure you know exactly what you’re getting into before you sign up for a car loan (or any loan). If you don’t do your research, you could find yourself in a financial nightmare, or worse, a scam.

  • Going over-budget. Work out how much money you’ll be paying back over the course of the loan to get an idea of how much you’ll be spending overall on your vehicle — is the amount plus interest worth it? More importantly, can you afford it?
  • Not checking reviews. Check review sites, messages boards and car enthusiast websites to see what other people are saying about certain lenders. If you know someones who’s been in a similar position when financing a car purchase, ask them.
  • Extremely long loan terms. Some lenders offer loan terms of 7+ years that can accrue major interest over time. Sure, the monthly payments will be lower, but if it’s not absolutely necessary, you should avoid longer terms to save money.
  • Being unprepared. Check your credit score before you do any car shopping so the dealer or lender can’t take advantage of you. This will also help you to avoid applying for loans you’re unlikely to get approval for, seeing as each full application requires a hard pull on your credit, which can hurt your credit score. Also, by knowing interest rates that other lenders offer, you’ll be able to compare and find the most competitive deal.
  • Making an impulsive purchase. Of course your dream car is out there. But if you have poor credit, it may have to wait so you can buy a car you can afford and one that has lower rates.

Alternatives to consider

If a bad credit car loan isn’t the right choice for you, you could consider using a credit card to buy a car. The smart way to pay for a car purchase with a credit card is to buy a cheap car and take advantage of a low interest rate or 0% offer. This way you pay off the balance gradually without the hefty charges associated with a regular credit card or a personal loan.

Another way to avoid taking out a bad-credit loan is to wait. Work towards improving your credit rating by controlling your debts, managing your finances responsibly and knowing what’s on your credit file so that you can remove any errors or disputes from your file.

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Frequently asked questions

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