- Long 45-day preapproval
- Return car at no cost in seven days
- Low $4,000 annual income requirement
- No new car financing
- Difficult to negotiate a better deal
- Can't use financing outside Carvana
We compared the rates, terms and services available through car loan providers that accept bad credit. Since many bad credit options are available through local lenders and dealerships, we included multiple connection services to make sure we covered the most options.
|Loan amount||Not stated|
|APR||3.5% to 20%|
|Lender||Best for …||What sets it apart||APR|
|Carvana||Buying a car completely online||A long preapproval period of 45 days and seven days to return a vehicle at no cost.||3.9% to 27.9%|
|myAutoloan.com||Comparing lenders that accept bad credit||A network of new and used car financing providers that are transparent about costs||Starting at 2.15%|
|CarMax||Financing a used car||Same-day approval and seven days to test drive a vehicle||Not available||Read review|
|LendingClub||Refinancing||Accepts 10-year old vehicles with up to 120,000 miles||2.99% to 24.99%|
|Auto Credit Express||Borrowers recovering from a bankruptcy||Accepts borrowers with. bankruptcy on credit report||Not available|
Generally, borrowers with bad credit can qualify for rates between 10% and over 20%. The rate you get can vary depending on if you buy a new or used car and how low your credit score actually is.
|Credit sore range||Average rate on a used car||Average rate on a new car|
Your rate also depends on your financial health outside of your credit score. If your credit score is low but your income is steady and you have few debts, you could potentially qualify for a lower rate. But you still probably won’t qualify lenders that offer the lowest rates, like LightStream.
But if you have a bankruptcy or foreclosure on your credit report, you might get an even higher rate. If you can qualify at all.
Select your credit range and the state you live in for more personalized options.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
The process for getting a car loan with bad credit isn’t too different from getting one with good credit. The main difference is the first step.
Yes, there are car loans available if you have no credit or a limited credit history. Many of our top picks for borrowers with bad credit will work with borrowers who don’t have credit. This means that you should expect higher rates and more strict loan terms — including limits on how much you can borrow.
Like with bad credit, you may also want to apply with a cosigner and have a large down payment saved to help increase your chances of being approved for a loan. If you don’t need a car loan immediately, you may also want to consider smaller loans and credit cards to help build your credit. Be cautious when applying, however. Too many recent credit checks and new loans could make it more difficult to find a car loan in the future.
Getting a car loan with bad credit is a lot like getting any other type of car loan. However, you might have to work a little harder to find the best deal.
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 — in a scam.
If you’ve gotten preapproved for a car loan, you’re in a good spot — even if you have bad credit. You won’t have to rely on the dealership to finance you, so you can negotiate the price of your car and any other features without worrying if you can afford the car.
Best of all, you may be in a position to get an even better deal. Your sales person might be willing to match the interest rate or terms you have with your current lender.
Your sales person might also try to throw in extra and incentive. Be wary. Many of these, like an extended car warranty, will cost you much more than they’re worth. Negotiate the price of the car and the terms of financing, and only go for extras if you think you’ll really use it.
The best alternative to a car loan is to build your savings. Or, work toward improving your credit score to help get a better interest rate in the future.
If you can’t wait, you could potentially borrow a personal loan to buy a car or consider using a credit card to buy a car. These both come with their own risks, so consider your options carefully before borrowing.
I have bad credit. When do I need a cosigner to qualify for a car loan?
You may be able to qualify for a car loan without a cosigner if other aspects of your application are strong, such as having a consistent income and large down payment saved up.
When is a bad credit car loan actually the right solution for me?
It depends on your credit rating, the type and cost of the car you are looking to buy and your financial situation. Be sure to make through comparisons and don’t neglect other alternatives such as using a credit card to pay for a low-cost car.
How do I choose a reputsble lender?
Do your research. Get online and see what other people are saying about their experiences with different lenders. Talk to people you know who have applied for bad-credit car loans, and read all the terms and conditions.
You might also want to start your search with community development financial institutions (CDFIs) like Capital Good Fund, which often offer lower rates to poor-credit borrowers than online lenders.
What fees are involved that might be different from bigger banks?
Monthly account fees and origination fees can significantly increase the amount you have to pay back. Some loans will also include a fee for early repayment, so make sure you know the ins and outs of your loan.
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