If you have bad credit, getting approved for an auto loan can feel impossible — but it doesn’t have to be. At ElitePersonalFinance, we help thousands of borrowers every year compare legitimate, reputable auto loan options designed specifically for low credit scores.

We work with top-rated auto loan comparison platforms that connect you with multiple lenders at once — helping you find lower rates, better terms, and higher approval odds without harming your credit score.

• No obligation to accept an offer
• Fast online applications
• Bad credit, no credit & past bankruptcies welcome
• Trusted by borrowers nationwide

Instead of applying blindly and risking rejection, use our carefully reviewed partners to compare real offers in minutes and choose the loan that fits your budget.

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Best Car Loans for Bad Credit of January 2026

For many borrowers, having less-than-perfect credit can make car financing feel like an uphill battle. Today, you should not fear not receiving competitive rates or being exposed to subprime products like dealer range financing that can blow up your monthly budget. This increases your risk of vehicle repossession and damages your credit score, which you don’t want.

Fortunately, there are many better alternatives, from national banks and credit unions to refinance marketplaces and subprime specialists, many of which offer legit car loans for bad credit that can get you back on your feet. Expect flexible underwriting and fully transparent terms that let you rebuild your credit and qualify for lower APRs.

Why Trust ElitePersonalFinance?

At ElitePersonalFinance, we analyze not just the lowest advertised APRs but also how your loan product serves you by looking into flexibility requirements, shared experiences, and how it differs based on your credit score.

Whether you’re considering an online refinance platform like SuperMoney or RateGenius, an excellent customer service credit union like Consumers Credit Union or PenFed, or even the other shopping platforms like Capital One Auto Navigator and Carvana, our goal is to help you find the best car loan for bad credit you can find.

Keep reading to learn more about the best car loans for bad credit, including their pros and cons, how we chose our top recommendations, and ways you can boost your credit score before your next application.

SuperMoney

If you’re looking for a car loan for bad credit, then SuperMoney is an excellent place to start. It has hundreds of participating direct lenders offering competitive rates, complete with loan ranges, APRs, required credit scores, loan terms, and much more. Unlike direct lenders, it’s a comparison marketplace that lets you compare lenders side-by-side to find the best deal.

One of the key areas to look out with every lender is the proprietary SuperMoney user recommendation score, which is assigned to every lender on the platform. It’s determined by community member votes, paired with written reviews from real-world customers, so you learn everything from processing times to how they handle paperwork.

One of the best things about SuperMoney is the extensive resource section on everything related to auto loans. Its comprehensive guides cover everything from negotiating an auto loan to the factors auto loan lenders consider when approving.

All in all, SuperMoney is one of our favorite auto loan comparison websites.

What We Like:

• Easy way to compare Auto Lenders
• Helpful SuperMoney user recommendation score
• Soft credit prequalification available
• Extensive auto loan education resources

What We Don’t Like:

• Not a direct lender
• Final rates depend on the partner lender
• No in-person support
• Must apply with lenders on their own websites

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Vehicle must meet lender age and mileage requirements
• Complete a soft prequalification through SuperMoney

Terms: SuperMoney is an auto loan comparison marketplace that connects borrowers with hundreds of participating direct lenders. Loan amounts, APRs, repayment terms, and credit requirements vary by partner lender, with options available for borrowers with fair to bad credit. Users can prequalify with a soft credit pull and compare offers side by side before applying directly with a lender. SuperMoney does not issue loans itself. Always review the official lender terms before accepting an auto loan.

iLending

iLending is one of our preferred auto finance providers for bad credit. Claiming to have helped clients save an average of $148 a month on their auto payments using its extended lender network, which offers competitive rates, flexible terms, and real monthly savings.

One of the best things about iLending is that all borrowers are paired with a dedicated Loan Consultant who manages all aspects of your loan, including payoff timelines and required paperwork. Like SuperMoney, you can also compare all lenders side by side, always going back to your credit score.

Plus, iLending offers an extensive resource library where you can learn everything from how auto refinancing works to how interest rates impact your payments. No wonder it’s been averaging 4.5 out of 5 stars across more than 1,900 reviews on Trustpilot, one of the leading third-party review sites.

In short, if you’re looking to save money and replace an expensive auto loan with a manageable one, iLending is your go-to.

What We Like:

• Savings of $148/month on average
• Competitive refinance APRs
• Hundreds of participating direct lenders
• Dedicated Loan Consultant for one-on-one support
• 4.5 out of 5 stars across more than 1,900 reviews on Trustpilot

What We Don’t Like:

• Not a direct lender
• Documentation fees may apply
• Not for new or used vehicle purchases; only refinance
• No live chat support

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Minimum monthly income of $1,500
• Must meet iLending vehicle age and mileage requirements
• Complete a soft-credit prequalification through iLending

Terms:  iLending specializes in auto loan refinancing, offering access to an extensive network of lenders with competitive APRs and flexible repayment terms. Loan amounts and rates vary based on credit score, vehicle age, and mileage. Borrowers are paired with a dedicated Loan Consultant to manage the refinance process from payoff to funding. iLending is not a direct lender. Always review the final lender’s loan terms before refinancing.

Carvana

Carvana is one of our favorite one-stop shops for car buying and auto loans. Unlike traditional dealerships, Carvana lets you browse thousands of vehicle listings and configure personalized financing terms with prequalification in minutes.

Its in-house financing arm, Carvana Auto Finance, does an exceptional job of qualifying bad-credit borrowers with flexible underwriting criteria and loan terms based on your credit profile, income, and down payment. Its easy-to-read website breaks down APR, loan length, and monthly payments before signing any contract.

What makes Carvana special is its 7-day return policy. If your monthly payments don’t work, return the vehicle with no questions asked.

All in all, Carvana is one of our favorite options for bad-credit borrowers looking for their next auto loan.

What We Like:

• Accepts mid-500s credit scores
• Transparent APR and monthly payment breakdowns
• One-stop shop buying experience
• 7-day money-back guarantee

What We Don’t Like:

• Higher APRs for bad-credit borrowers
• No ability to negotiate rates
• Limited lender comparison options
• Vehicle pricing may be higher than dealership sales

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Vehicle must meet lender age and mileage requirements
• Complete Carvana’s online prequalification process

Terms: Carvana provides auto financing through Carvana Auto Finance for new and used vehicle purchases made on its platform. Loan amounts, APRs, and repayment terms vary based on credit score, income, and down payment. Prequalification uses a soft credit check, and finalized terms are presented before purchase. Financing is only available for vehicles purchased through Carvana. Always review the official Carvana Auto Finance loan terms before signing.

Upstart 

A more innovative, more flexible way to get approved for a car refinance loan, Upstart Auto will work for you. Unlike traditional lenders, Upstart uses AI-powered underwriting to evaluate borrowers on non-credit factors, including education, employment history, and income. With it, expect a personalized decision in minutes.

Plus, Upstart Auto’s refinancing programs offer an average monthly savings of $127.

Note, Upstart Auto is only for auto refinance loans, not traditional new or used vehicle loans.

What We Like:

• AI-based underwriting for flexible approval
• Fast qualification in minutes
• Transparent APR and loan terms
• Fully 100% online process with no dealer markups
• Excellent for fair to poor credit
• A+ rating from the Better Business Bureau

What We Don’t Like:

• Not available for all vehicle types
• Loan amounts and terms vary by state
  Not available in Iowa, Louisiana, Maryland, Nevada, Puerto Rico, and West Virginia

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Vehicle must meet the lender’s age and mileage requirements
• Prequalification through the Upstart portal

Terms: Upstart Auto offers auto refinance loans powered by AI that consider factors beyond traditional credit scores. Loan amounts, APRs, and repayment terms vary by state and vehicle type. Prequalification is fast and completed online, with no impact on your credit score. Upstart Auto does not offer loans for new or used vehicle purchases. Always review the lender’s final loan terms before refinancing.

Capital One

Looking for a new or used vehicle with bad credit? Capital One can be your go-to, offering loans from $4,000 to $75,000 at 2.99% to 24.9% APRs.

One of Capital One’s biggest strengths is the Auto Navigator platform, which lets you shop thousands of vehicle listings from its nationwide dealer network, each with customized APRs and quick estimated monthly payments. Kudos for its soft pull qualification, which lets you check out loan options without impacting your credit score.

Looking to educate yourself on all aspects of auto loans? Capital One also offers a detailed learning center that breaks down helpful information, such as interest rates and loan structures.

Once you’re approved for a Capital One loan, visit a partner dealership and finalize the paperwork with locked-in terms, a nice alternative to working with an aggressive finance manager.

What We Like:

• Loans from $4,000 to $75,000
• Wide nationwide dealer network
• Transparent APR and payment estimates

What We Don’t Like:

• No private party purchases
• APRs can be higher for bad-credit borrowers
• Limited negotiation ability once terms are locked
  No direct refinance or lease buyout options

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Steady source of income
• Vehicle must meet lender age and mileage requirements
• Complete Auto Navigator prequalification and shop at a partner dealer

Terms: Capital One auto loans are offered through its Auto Navigator platform, with loan amounts typically ranging from $4,000 to $75,000. APRs generally range from 2.99% to 24.9%, depending on credit score, vehicle selection, and dealership participation. Borrowers can prequalify with a soft credit pull and must purchase through a Capital One-approved dealership. Always review the official Capital One auto loan terms before accepting financing.

Consumers Credit Union

If you want to take advantage of competitive auto loan rates without the dealership markups or high APRs, consider Consumers Credit Union. It offers consistently low starting APRs, transparent loan terms, and a solid Member First approach with no hidden fees.

One of our favorite things about Consumers Credit Union is its helpful online calculator, which lets you enter a down payment and vehicle price to estimate a monthly payment based on a starting interest rate and repayment term. It also offers a helpful table that breaks down long-term by year, with or without its Auto Buying Advice.

Plus, Consumers Credit Union borrowers can take advantage of a 0.50% rate discount when buying their new vehicle through its Car Buying Service.

What We Like:

• Powersports & Recreation Vehicle loans available
• 10-day grace period before a late fee charge
• 0.50% APR discount through Car Buying Service
• Helpful online calculators

What We Don’t Like:

• No private-party vehicle purchases
• No lease buyout financing
• Limited branch availability

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Open a CCU membership
• Vehicle must meet lender age and mileage requirements
• Apply online, by phone, or in-branch at Consumers Credit Union

Terms: Consumers Credit Union offers auto loans with competitive fixed APRs, flexible repayment terms, and member-exclusive discounts. Loan terms and rates depend on creditworthiness, vehicle type, and membership eligibility. Borrowers may qualify for additional rate discounts through the credit union’s car-buying service. Membership is required before funding. Always review the official Consumers Credit Union auto loan terms before accepting an offer.

Tresl

Tresl is an auto loan marketplace that lets you finance, lease, or refinance. It offers an extensive network of direct lenders willing to help you save $1,500.76 per year on auto loan payments on average (through refinancing) or assist you in buying your lease vehicle at competitive loan rates.

How Tresl works is simple. Pre-qualify and check your rate in minutes, consult with a finance advisor, and sign your lease purchase documents within 48 hours, all managed using its proprietary, easy-to-use platform.

Plus, Tresl comes highly rated, with an average rating of 4.3 out of 5 stars across more than 6,300 reviews on Trustpilot, with real-world customers calling out everything from smooth processing to competitive rates.

All in all, Tresl makes refinancing or purchasing your lease easier, faster, and better.

What We Like:

• Refinance, lease buyouts, and purchases available
• Average savings of $1,500+ per year through refinancing
• Fast prequalification
• Average rating of 4.3 out of 5 stars across more than 6,300 reviews on Trustpilot

What We Don’t Like:

• Not a direct lender
• Rates and terms vary by partner lender
• Limited options for bad credit borrowers
• No in-person branch support

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Vehicle must meet lender age and mileage requirements
• Complete Tresl’s online prequalification

Terms: Tresl is an auto loan marketplace that supports refinancing, lease buyouts, and vehicle purchases through partner lenders. Loan amounts, APRs, and repayment terms vary depending on the selected lender and borrower qualifications. Prequalification is completed online, followed by assistance from a finance advisor. Tresl is not a direct lender. Always review the partner lender’s final loan terms before proceeding.

OpenRoad

OpenRoad Lending is an auto loan refinance marketplace. They let you restructure your existing car loan using an expansive network of partner banks and credit unions that work with fair and less-than-perfect credit.

Loan amounts typically range from $7,500 to $150,000, with repayment terms commonly between 36 and 72 months, depending on your vehicle details (age and mileage) and lender. All borrowers start with a quick, easy online prequalification process, followed by a dedicated loan specialist to help finalize the loan.

OpenRoad Lending also maintains a solid reputation among borrowers, with a near five-star average across more than 3,900 reviews on RaveCapture, a leading third-party review site. Many customers on online review sites mention praising everything from friendly, knowledgeable staff to quick processing times.

All in all, OpenRoad Lending is a solid option if you’re looking to refinance your high APR auto loan with dedicated one-on-one loan support.

What We Like:

• Loan amounts from $7,500 to $150,000
• Repayment terms between 36 and 72 months
• Accepts higher-mileage vehicles
• Hundreds of participating direct lenders
• Simple online prequalification process

What We Don’t Like:

• Not a direct lender
• No purchases or lease buyouts available
• Rates vary depending on the lender

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Vehicle must meet lender age and mileage requirements
• Complete OpenRoad Lending’s online prequalification

Terms: OpenRoad Lending provides auto loan refinancing through a network of banks and credit unions. Loan amounts typically range from $7,500 to $150,000, with repayment terms of 36 to 72 months. APRs depend on credit score, vehicle age, and mileage. Borrowers complete a soft-credit prequalification before being matched with a lender. Always review the lender’s official loan terms before refinancing.

Digital Federal Credit Union (DCU)

If you have less than perfect credit, then its 1M+ member-strong Digital Federal Credit Union (DCU) may be able to help with this extensive auto loan program that allows you to qualify for rates as low as 4.99% APR, along with membership level and/or electric vehicle discounts with no payments for 60 days.

With DCU, you can expect to pay a lower APR after the start of your repayment term. For example, as of December 2025, one can qualify for a 4.99% APR for up to 36 months, and a 6.9% APR for up to 84 months.

If you’re looking for a complete credit union, then DCU also offers a 5% APY Primary Savings Program (on balances up to $1,000), along with 0.20% APY Free Checking and auto refinance programs as low as 4.99% APR.

What We Like:

• Rates as low as 4.99% APR
• No payments for 60 days
• 5% APY Primary Savings Program and 0.20% APY Free Checking
• The largest credit union in New England
• Over 1 million members in all 50 states

What We Don’t Like:

• Limited to New England residents
• Not the best option for new car lease purchases
• APRs vary depending on credit score and the type of vehicle

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Open a DCU membership (savings account required)
• Meet vehicle age and mileage requirements
• Complete online prequalification or apply in-branch

Terms: DCU offers auto loans with APRs as low as 4.99% and extended repayment terms up to 84 months. Rates and terms vary by credit score, loan term, and vehicle type, with additional discounts available for members and electric vehicles. Membership is required before loan funding. Always review the official DCU auto loan terms before accepting financing.

PenFed Federal Credit Union

PenFed is one of the most competitive auto lenders around, offering rates as low as 3.39% APR (when you use their TrueCar-powered car-buying service) on loan amounts up to $150,000, or financing up to 125% of your car’s value. All of this can be achieved with only a self-credit prequalification on the website, which has no impact on your credit score.

On top of that, PenFed Services offers both new and used autos as well as numerous refinancing options. Purchasing a vehicle through their platform allows you to browse listings online, and members enjoy an average discount of $2,851 off MSRP. Plus, there are special savings based on model, e.g., up to $3,000 on select Mercedes-Benz vehicles. It is available in all 50 states.

All in all, PenFed is a long-standing national credit union that excels with new and used auto loans.

What We Like:

• Rates as low as 3.39% APR
• 36, 48, 60, and 72 months repayment terms
• Members-only cash back offers
• Buyers bonuses available
• Available in all 50 states
• PenFed Debt Protection offers hardship relief

What We Don’t Like:

• Some incentives are only available through TrueCar
• Limited in-branch location
• APRs vary based on credit score and vehicle type
  Not the best option for lease buyouts

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Open a PenFed membership
• Meet vehicle age and mileage requirements
• Complete online prequalification through PenFed

Terms: PenFed provides auto loans up to $150,000 with competitive APRs starting around 3.39% when using its car-buying service. Repayment terms typically range from 36 to 72 months, with financing available for new, used, and refinanced vehicles. Loan terms and rates vary by credit score and vehicle type. Membership is required before funding. Always review the official PenFed auto loan terms before proceeding.

MyAutoLoan

In business since 2003, myAutoLoan promises to get borrowers up to four offers in minutes to apply towards new and used vehicle purchases. They come from a variety of institutions, including banks, credit unions, and finance companies, and use a soft credit pull for prequalification.

Loan amounts typically go from $5,000 to $100,000, depending on the type of loan, lender, and credit history. The platform is known for quick loan decisions made within minutes and is available in all 50 states. People with less-than-perfect credit can also take advantage of refinancing programs that allow you to lower your monthly payments, shorten your repayment term, or build equity in your vehicle, along with private party and lease buyouts.

Not to mention, myAutoLoan is an A+ rated business by the Better Business Bureau.

What We Like:

• In business since 2003
• Loans from $5,000 to $100,000
• A+ rated business by the Better Business Bureau
• Private party and lease buyouts available
• Some lenders don’t require a down payment

What We Don’t Like:

• Not a direct lender
• Minimum loan amounts are higher than those of some competitors
• Best rates require excellent credit scores

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Completed application through the myAutoLoan portal

Terms: myAutoLoan is an online auto loan marketplace that connects borrowers with up to four competing offers from banks, credit unions, and finance companies. Loan amounts typically range from $5,000 to $100,000, with terms and APRs varying by lender and credit history. Prequalification uses a soft credit check. myAutoLoan is not a direct lender. Always review the final lender’s loan terms before accepting an offer.

Auto Credit Express

Auto Credit Express is highly recommended as a bad-credit auto financing company that offers loans for new and used vehicles. Loans range from $5,000 to $45,000 through an extensive network of auto loan partners focused on subprime and second-chance financing.

Like most of our recommendations, it offers a soft credit prequalification process. Once you’ve completed a form, you’ll be matched with lenders in minutes. Terms and interest rates will depend on your credit score and lender.

Like myAutoLoan, it is also A+ rated by the Better Business Bureau, with a Trustpilot trust score of 4.6 out of 4,200+ reviews.

Overall, Auto Credit Express is a strong choice if you have less-than-perfect credit and want access to multiple lenders.

What We Like:

• Excellent for bad credit borrowers
• Focused on subprime and second-chance financing
• Loans go from $5,000 to $45,000
• 4.6 rating out of 4,200+ reviews on Trustpilot

What We Don’t Like:

• Not a direct lender
• Actual rates and terms vary by partner
• Smaller loan amount options

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Completed application through the Auto Credit Express portal

Terms: Auto Credit Express specializes in connecting bad-credit borrowers with auto loan lenders offering financing for new and used vehicles. Loan amounts generally range from $5,000 to $45,000, with APRs and repayment terms varying by lender and credit score. Prequalification is completed online using a soft credit pull. Auto Credit Express is not a direct lender. Always review the lender’s official loan terms before moving forward.

What Are Car Loans for Bad Credit?

A car loan for bad credit is offered to borrowers with credit scores typically below 650. These borrowers have several derogatory marks on their credit records, including late payments and defaults.

In terms of how they work, all lenders start with an assessment that evaluates your credit score, income-to-debt ratio, and other factors before providing an estimated APR range that typically falls between 8% and 20%, depending on the lender, vehicle, and your credit score. Loan amounts usually range up to $50,000, with repayment terms of 36 to 72 months. Generally, the shorter the term, the greater the interest paid, versus lower monthly payments for longer terms (albeit at the expense of paying more interest over time).

Today, bad credit loans fall into two categories: secured and unsecured. With secured loans, the vehicle serves as collateral, whereas unsecured loans for bad-credit borrowers are rare due to the increased risk.

Types of lenders offering car loans for bad credit include credit unions, online lenders/marketplaces, and very few banks and national lenders like Capital One, with APRs higher than standard rates for borrowers with excellent to good credit.

To improve your chances of getting a car loan for bad credit, we recommend increasing your down payment, shopping around, considering a co-signer, and checking your credit report to dispute any errors. And our guide covers many more tips on getting the auto loan for bad credit you deserve.

In this article, we talk to people with bad credit. If you want to learn more, we have an advanced guide on the best car loan rates. Read it to fully understand car loans.

Can I Get a Car Loan With Bad Credit?

Yes, it is possible to get a car loan with bad credit.

However, you should expect much higher APRs and stricter terms than borrowers with good credit. If you turn to credit unions, online lenders, or auto loan marketplaces, you’ll enjoy more flexible underwriting criteria that take into account factors beyond your credit score, such as income and down payment size.

That’s why we highly recommend shopping around and pre-qualifying with multiple lenders before securing the best deal.

If you want to improve your odds of taking out a lower APR car loan for bad credit, we encourage you to look into your debt-to-income ratio (keeping it under 30%) and make a sizeable down payment in the 10%-20% range.

Keep in mind that all bad-credit borrowers are considered equal. A borrower with a 600 score due to a high credit utilization ratio may get a lower APR than someone with a 650 score with a recent history of a repossessed vehicle. That’s why we recommend pre-qualifying whenever possible, so your complete financial profile can be assessed without a hard inquiry.

What APR Should You Expect to Pay On An Auto Loan If You Have Low Credit?

If you have bad credit, auto loan APRs can range from roughly 9% to 20% or more, depending on factors such as your credit score, income, and the type of vehicle you’re considering. Borrowers with scores in the 580–620 range often see 12-16% APRs, versus 18%+ APRs for those with the worst credit.

Here’s a quick breakdown of how APRs are impacted depending on several factors:

Vehicle Type/Age: Expect newer vehicles to have the lowest APRs, whereas older or higher-mileage vehicles carry higher APRs.

Loan Term: The shorter the loan term, the lower the APRs. We always advise going with a 36- to 60-month repayment term.

Down Payment: Always aim for at least a 20% down payment to lower your APR and reduce lender risk.

Lender Type: Don’t expect the same APRs from banks and dealerships as from credit unions and online lenders.

In short, even a slight improvement in your credit or strategically structuring your loan can make a big difference in the APRs you will pay over time.

How to Find the Best Car Loan for Bad Credit?

If you have less-than-perfect credit and are looking for your next auto loan, don’t despair. All despair—not here’s hope. Every lender has different requirements for APRs, loan terms, and fees.

Here are our favorite strategies for finding the best car loan for bad credit:

Begin with a Soft Credit Check

Before signing up for an auto loan for bad credit, you need to know your credit score. Lenders such as Capital One, US Bank, and PNC Bank allow you to perform a soft credit inquiry to check potential rates without hurting your score.

One of the first things you should do when reviewing your credit reports is check for errors, such as accounts that show as closed when they should be open, incorrect balances, and similar items. If you notice any errors, follow the dispute process with the credit bureau in question. With a successful dispute, you can easily raise your score by 50 to 100 points, which will help improve your odds of getting approved and lowering your APR.

That’s why we recommend using comparison platforms like SuperMoney and iLending, which let you compare loan offers from more than five lenders and check your potential rates without applying.

First, Figure Out Your Budget and Monthly Payment

After you’ve learned your credit score, they crunch the numbers and know what you can afford. Not only do you have to calculate your estimated monthly payments, but you also have to factor in gas, maintenance, and insurance costs. That’s why we recommend using credit unions like DCU, which has helpful calculators to factor in down payments and terms.

One of the best ways to lower your monthly payment is to make a modest down payment, as much as you can afford. Even if you put down $3,000, you can reduce the overall interest.

Use Online Marketplaces

Since you have bad credit, it will be challenging to qualify for traditional banks like Chase and Wells Fargo. That’s why going with SuperMoney, myAutoLoan, and OpenRoad Lending is very smart, since you can compare multiple lenders in one shot, allowing you to compare APRs, terms, and fees without numerous hard inquiries on your record.

Remember that banks typically offer the most significant loan amounts, whereas credit unions specialize in lower starting APRs. Online lenders provide much faster approval and better prequalification opportunities, so you’re not out of luck if you have bad credit.

Review Offers

In finding the best car loan for bad credit, it’s essential to understand what to review. Don’t just focus on APRs; also consider total loan costs, fees, and repayment terms. For example, OpenRoad is known for its adjustable monthly payment structures and extensive repayment terms of 36 to 72 months. In contrast, Carvana offers an improved one-stop shop where you can select inventory on the website and sign for a loan in one place.

Don’t Forget Credit Unions

If you have bad credit, credit unions and regional lenders could be a viable option. Unlike legacy banks like Chase and Bank of America, credit unions are member-centric and focus on flexible underwriting that considers factors beyond your credit score, including income stability, employment history, and existing member relationships. Plus, they can work to your advantage as a first-time buyer.

Don’t forget that you need to pay a small deposit or belong to a local organization or other type of affiliation. Lenders like DCU, Navy Federal, and Consumers Credit Union work well with borrowers with credit scores in the 650 range, so it’s a good idea to start with them.

Avoid Dealer-Only Financing

We always recommend avoiding dealership financing. Dealers are notorious for marking up interest rates, especially if you don’t have preapprovals in place. Without getting a feel for outside quotes, you have no idea if the rate you’re being offered is a rip-off.

By securing preapproval from a bank, credit union, or online lender first, you can negotiate better with the dealership. It’s very easy to compare your financing with their offers, or use your own quotes to get a better deal through the dealership.

Choose Shorter Loan Terms When Possible

Although longer loan terms lower your monthly payments, they come with higher APRs, and you may be paying hundreds of dollars more than you need to over the life of a loan. The longer the repayment term, the higher the risk of being upside down on a loan, which can make it difficult to refinance or sell your car later.

If your budget allows, choosing a 36- to 60-month term can pay serious dividends. It will also help you build equity and improve your credit faster. Don’t be afraid to refinance once your score goes up so you can save even more in the long run.

How to Improve My Chances of Getting a Car Loan With Bad Credit?

Here are some ways you can improve your chances of getting a car loan with bad credit:

Review Your Credit Report Line by Line

The first step to improving your chances of getting a car loan is to dispute any errors on your Experian, Equifax, and TransUnion credit reports. Errors are more common than people realize. A single incorrect late payment could drop your score by 50 to 100 points. Expect to take 30 to 45 business days to successfully dispute an error, provided you submit all supporting documentation, such as bank statements and lender agreements.

Power Your Debt-to-Income Ratio (DTI)

If you bring utilization below 50% or 30%, you can significantly improve your approval odds. Your debt-to-income ratio shows lenders how much debt you have relative to your income. If you can’t pay down your debt fast enough, we advise you to increase your documented income, which could include full-time work, gig work, or overtime wages.

It’s all about proving to lenders that you can manage your debt obligations and your monthly cash flow. Remember that the income ratio matters as much as your credit score.

Save for a Down Payment

When you’re buying a vehicle, try to put down the biggest down payment you can afford. Even $1,000–$2,000 can be the difference between approval and denial. Plus, it also ensures you won’t go upside down in your loan too quickly, which is especially true since many subprime loans have higher-than-average interest rates, and building equity in your vehicle allows you to refinance once your credit score comes back up with healthy habits.

Pick a Shorter Loan Term

The longer the loan term, the higher the APRs and the greater the lender’s risk. Don’t get stuck on 72- or 84-month payment terms; go for a 36- to 60-month term instead, which will reduce total interest paid over time.

Not to mention shorter loan terms allow you to build equity faster, which is very useful once it’s time to refinance. Shorter loans are viewed as less risky by lenders, so any savings earned will outweigh the higher monthly payment.

Choose the Right Vehicle

Not all cars are treated equally by lenders. For example, some lenders specialize in older, higher-mileage vehicles. Remember that newer vehicles are safer to finance, and higher-mileage vehicles increase lender risk. Plus, you want to pay attention to cars with stronger resale values (such as Honda Civics and Toyota Camrys), since they get better terms.

Look into Co-Signers

Another way you can improve your approval odds is to enlist a co-signer, which reduces the risk on your loan and provides backup in case you cannot make repayments. If your credit score is below 600, this is especially useful.

However, understand that missed payments affect both parties, so you don’t want to jeopardize your relationship with your co-signer.

Limit Hard Credit Inquiries

Too many hard inquiries in a short period can temporarily lower your credit score by as much as 10 points, so we recommend limiting them to 60 to 90 days before your next auto loan. This strategy is even applicable if you’ve taken out new credit cards, personal loans, or buy now, pay later financing.

When shopping for auto loans, try to submit applications within a short time frame so that credit scoring models treat it as a single inquiry rather than multiple inquiries. Never forget prequalification tools that let you evaluate different offers without affecting your credit score.

Get Preapproved Before Visiting a Dealership

Walking into a dealership without a preapproval puts you in the dealership’s crosshairs, especially if you have bad credit. Any number of options will be presented to you, such as marked-up interest rates or in-house financing with unfavorable terms. A preapproval from a bank, credit union, or online lender allows you to get a better picture of what you qualify for.

With a preapproval in hand, you can also focus on haggling the vehicle price rather than just accepting whatever financing is being offered to you. As always, if you face high-pressure sales tactics, it only makes sense to walk away. Preapproval lets you take control of the situation and avoid being caught by dealerships.

How to Improve My Credit and Pay Less?

From auto loans to refinancing, improving your credit will open the door to lower APRs, lower monthly payments, and less scrutiny by lenders. Even with a modest boost to your credit score, you can save thousands over the life of a car loan. Even moving 50 points can unlock better offers from comparison platforms such as SuperMoney or iLending.

Let’s take a look at ways you can improve your credit before taking out your next car loan.

Fix Credit Report Errors

Before taking out an auto loan, it’s a good idea to review your credit reports in detail. Incorrect late payments, duplicate collections, outdated balances, or any number of similar errors can appear on your credit report, unnecessarily dropping your score by 50 to 100 points.

If you find it on your credit report, dispute it immediately. Experian, Equifax, and TransUnion have their own dispute processes: online, by mail, or by phone. When filing a dispute, clearly articulate the issue, why it’s incorrect, and provide supporting documentation that argues your case, such as payment confirmations or payoff letters. After submitting your dispute, credit bureaus could take up to 30 business days to verify and process your claim.

Limit Hard Inquiries Before You Apply

If you’re planning to apply for an auto loan in the next 60 to 90 days, we do not recommend taking out any new loan applications, such as store cards or Klarna offers. Plus, it’s essential to range within a short time period, which treats it as a single inquiry in your report. That’s why we’re big advocates of using platforms like SuperMoney or iLending to protect their score, as you can pre-qualify for multiple offers instantly with no hard inquiries until it’s time to apply.

Pay Down Credit Cards Strategically

It’s not only about how much you pay towards that, but how you pay it. If I go, the score is based on 30% credit utilization, which means the percentage of available credit you’re using should be under 10%. Every one of your cards would be under 10%. Instead of spreading payments evenly throughout your credit, focus on dropping one or two cards below 10%.

In no time, you should see online lenders like Capital One Auto Navigator or Consumers Credit Union providing noticeably improved estimated APRs on your next loan.

Add Positive Credit Activity

Taking out a small secured card or credit-builder loan can be a tremendous dividend. With 35% of your FICO score based on your positive payment history, every on-time payment matters. Having small accounts has built long-term trust with lenders and improved your approval odds. Avoid late payments, collections, or unnecessary hard inquiries at all costs.

Become an Authorized User

I’m becoming an authorized user on a well-managed credit card issued to a trusted family member or friend. Any positive payments at a rate reflect favorably on your credit report. Not only that, but it also improves your average account age and payment history, which comprise close to 50% of your credit report.

When applying with rate-sensitive lenders or refinancing an existing auto loan, this could mean the difference between a 15% APR and a 9% APR.

Increase Credit Limits

Requesting credit limit increases on existing cards will help improve your overall credit utilization ratio without requiring you to pay down debt quickly. One of the best ways to do so is to call your credit card company or negotiate a credit limit increase, provided you’ve made on-time payments within the last 6 to 12 months.

By incorporating all the strategies above, you can improve your chances of getting a lower APR.

All About Stability

In the eyes of bad-credit lenders, it’s all about stability. One of the biggest things is to build your credit history. For example, you do not want to close all their accounts, as that would lower your average account age. Even if they’re used only sparingly on a card, keep as many accounts open as possible.

If you have all the cards with no annual fee, then we never recommend closing them. Instead, keep them active with a single subscription, e.g., Spotify or Netflix, and pay it off monthly with automatic payments, which helps demonstrate to lenders that you know how to manage credit responsibly. Over time, stability (no matter how much of an outstanding balance is on your card) will open you up to lower APRs.

Reduce Debt-to-Income Ratio

One of the most significant determining factors for auto loan lenders for bad credit is your debt-to-income (DTI) ratio. Even if you have excellent credit, a high DTI can prevent you from accessing the best loan opportunities. Auto lenders typically prefer DTI ratios below 40%, though some have stricter criteria.

Before you take out any auto loans, try to pay down your outstanding balances. One of the best ways to do this is to consolidate your high-interest debt or apply for a balance transfer card with a 0% introductory APR that lets you pay more towards principal rather than interest. Also, the lower your DTI, the lower the documentation requirements for a speedier approval.

In short, if you have borderline credit scores, a strong DTI can help make up for it.

Time Your Application Around Credit Reporting Cycles

When applying for an auto loan, timing is everything. Credit card issuers typically report their balances once per month shortly before your statement closes. If you apply before your balance is updated, your credit utilization will appear higher than it actually is, which can result in lower APRs.

To boost your credit score, don’t worry about the due date. Instead, try to pay down your credit cards before the statement closing date and wait for credit bureaus to receive reports of lower balances before working on your next auto loan. If you do this correctly, you can expect a noticeable score increase in as little as 30 days, so we encourage you to apply at the right strategic moment.

How We Picked These Lenders

At ElitePersonalFinance, we’re all about helping borrowers make the most informed choice possible. Our comprehensive guide starts with an overview of the top recommended lenders based on loan types, APR ranges, and how well they accommodate subprime borrowers or those with limited credit history.

Other criteria we use include loan amounts, repayment terms, and the flexibility each lender provides.

Let’s explore in-depth what each criterion means:

Interest Rates

We only prioritize when it’s for transparent APR to determine whether a rate is variable. Allowing borrowers to pre-qualify without harming their credit with a soft inquiry is also a must, helping you protect your credit score.

At the same time, we also check for the availability of APR adjustments and promotions. For example, Car Buying Services at Consumers Credit Union offers a small rate discount in exchange for purchasing a vehicle through their network. Look for lenders offering rate discounts or flexible terms for borrowers with bad credit.

Fees and Penalties

Application fees, documentation fees, late payment penalties, and prepayment penalties should be kept to a minimum. We had recommended lenders like Consumers Credit Union and PenFed, as they offer maintenance-fee-friendly structures and optional protections such as GAP coverage or a mechanical repair warranty.

Eligibility

Eligibility criteria such as minimum credit scores, income requirements, and vehicle restrictions are our comments on vehicle refinancing. Lenders such as Auto Credit Express and Tresl make it very clear what our requirements are regarding vehicle type, condition, and mileage.

Most of our recommended credit unions require that you open a savings account. However, you can immediately enjoy lower APRs and more flexible evaluation criteria than you would with traditional banks.

Loan Amounts and Terms

Look for lenders that offer a wide range of loan sizes and repayment flexibility. For example, PenFed allows financing up to 125% of a vehicle’s value, while other banks offer terms up to 84 months for lower monthly payments. Our guide evaluates every letter and how they factor into this equation, allowing users to balance affordability with reduced interest payments.

Customer Support and Educational Resources

When it comes to dealing with car loans for bad credit, customer support is everything. Preferably, you have a team of dedicated loan specialists on staff to help you one-on-one with all your documentation questions. Live chat, phone support, and in-brand assistance are also preferred.

Kudos to Capital One and Consumers Credit Union, which offer dedicated education and resources on their websites to help borrowers, including information on APRs and prequalification.

Online Tools and Prequalification

We have online marketplaces that allow you to compare multiple offers at once and calculate potential savings. Example platforms include myAutoLoan, Tresl, and OpenRoad Lending, which also help conduct soft credit checks to help you preserve your credit.

All of our recommended options also provide financial resources, such as online calculators and auto-buying tools, that help you estimate monthly payments and make adjustments.

Approval Speed and Funding Time

If you have bad credit, getting your funds as quickly as possible matters, especially when you’re purchasing from a private seller. No decisions or funding should happen within several business days, with some online lenders allowing approval within minutes and funding by the next business day. Keep in mind that banks generally take longer to process due to stricter writing criteria.

Kudos to any lenders that do not have excessive documentation requirements. Plus, faster funding helps alleviate the risk of being moved into a dealer-only financing deal with sky-high APRs. Although speed is not intended to replace a lower APR, it always prioritizes the overall experience.

Refinancing and Exit Flexibility

Once your credit improves, you can refinance, so we prioritize lenders that make it easy to exit and refinance a loan. That means no lenders charge prepayment penalties. At the same time, some lenders even offer internal refinancing opportunities that can help you save thousands of dollars over the life of the loan, as your credit score improves.

When it comes to our recommendations, we always prioritize lenders that prioritize long-term stability over short-term profits.

Transparency

We prioritize lenders that clearly disclose all key loan terms upfront, with no hidden fine print, including APR ranges, fees, and eligibility requirements. It’s easy to lose thousands of dollars due to hidden fees and unclear terms, so we always appreciate lenders who provide complete disclosure early.

As a bonus, the lender should also educate you on how rates are calculated and the conditions that can raise APRs over time. If there are any refinancing restrictions, they should be clearly specified as well. We always prioritize the most trustworthy lenders so you can compare offers correctly.

Vehicle Restrictions

Keep in mind that not all lenders finance any vehicle. It’s not uncommon for bad credit lenders to reject vehicles due to age, mileage, or a combination of the two. When it comes to financing older vehicles, high-mileage cars, or private-party purchases, we look for the most flexible lenders possible. The wider the range of cars supported, the greater your chances of approval and inclusion in our guide.

Borrower Education and Financial Guidance

We always prioritize lenders that offer comprehensive educational resources to help borrowers better understand their auto loans. This could mean any number of tools, such as calculators, academic blogs, and one-on-one guidance from dedicated loan officers, especially useful if you’re purchasing a vehicle for the first time.

By prioritizing lender education, borrowers can make better decisions and build their credit scores in the long run.

Frequently Asked Questions

What credit score is considered harmful for a car loan?

A credit score below 600 is generally considered harmful for auto loans. If you have a score below 500, even worse, borrowers in this range face higher APRs and fewer lender choices. However, if you have a steady income or a co-signer, this does not necessarily mean automatic denial. Some lenders specialize in working with credit scores in the low 500s and even high 400s, but you have to start with online lenders first.

Can I Get a Car Loan With a 500 Credit Score?

Yes, it is possible to get a car loan with a 500 credit score. However, it’s going to be a lot harder, since this score is in the subprime range, meaning legacy banks like Bank of America and Wells Fargo are not likely to offer you any auto loans.

If you have a score in this range, you can expect higher APRs, shorter terms, and stricter income requirements. That’s why we highly recommend that users turn to Consumers Credit Union, PenFed, SuperMoney, iLending, and OpenRoad Lending, which are known to work with subprime borrowers and evaluate them on factors beyond their credit score, such as income stability and vehicle age.

What APRs Should I Expect With Bad Credit?

Expect to pay upwards of 9% APR, up to well over 20%, if you have bad credit, depending on factors such as your vehicle age, repayment term, income, and debt-to-income ratio. The larger the down payment, the lower your APRs. You can also get better interest rates with shorter loan terms.

It’s also essential to understand how much the loan structure influences your final APR. For example, you will see higher APRs on higher-mileage, used, or private-party purchases, as well as on newer vehicles, which lenders perceive as riskier. That’s why we highly recommend going for a newer vehicle or, at the very least, one with greater resale value.

Not to mention, even if you have the same borrower profile, APRs can vary wildly between banks, credit unions, and online lenders. That’s why we highly recommend you shop around and pre-qualify with at least three direct lenders before signing an offer. So you can save thousands of dollars in extra interest over the life of your loan.

Which lenders offer the best bad credit car loans?

If you want a better chance of approval for an auto loan, we recommend turning to credit unions, online lenders, and auto loan marketplaces like SuperMoney. They allow you to compare multiple lenders at once, which increases your approval odds. Especially beneficial for prequalification, which enables you to explore rates without hurting your credit.

Do I need a down payment for a bad-credit car loan?

We recommend putting down a down payment of 20% or more to improve your approval odds and lower your APR. The higher the down payment, the lower the loan-to-value ratio, which makes lenders perceive you as less of a risk. Borrowers with no down payment often face the most stringent loan terms.

Are Auto Loans Secured Loans?

Yes, most auto loans are secured loans. That means your vehicle is being used as collateral in case you default on a loan, with the lender reserving the right to repossess it and sell it to recover any losses.

When you take out an auto loan, the lender places a lien on your vehicle’s title, which means you technically own it, but the lender has a financial interest in it. Once the loan is paid off in full, the lien is released to you, and the title is in your name.

Can I refinance a bad credit car loan later?

Yes, it is possible to refinance a bad credit auto loan later. If your credit score bumps up by 50 or 100 points, you should take advantage of the lower APRs you now qualify for. Refinancing helps people reduce monthly payments or shorten loan terms to build equity in their vehicles faster, and it’s very common for borrowers to refinance within 12 to 24 months of their original loan.

How fast can I get approved with bad credit?

How fast you can get approved with bad credit depends on the platform you use. Many online lenders and marketplaces offer decisions within 24 to 48 hours. In rare cases, you may see same-day approvals if you submit all documentation promptly and accurately. Expect up to several business days for banks and credit unions. And as always, review the full loan agreement before signing to avoid any misunderstandings regarding payments.

Conclusion

In short, you don’t have to fear if you’re looking to take out an auto loan with bad credit. Nowadays, there’s no shortage of legit credit unions and online lenders willing to extend a hand with competitive APRs, flexible repayment terms, and member-friendly perks that will have you refinancing into a lower APR opportunity in no time.