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Fortunly's Guide

The Best Bad-Credit Car Loans and Providers

By
Julija A.

July 02,2021


Everyone wants to drive a convertible, but not everyone’s credit score will let them. Luckily, there are plenty of ways to get around this and still get a decent car, if not the ride of your dreams.

Many car dealers will meet you halfway, even if your score is far from perfect. In fact, we’ve compiled a list of companies offering bad-credit car loans exactly for those circumstances. If that’s what you’re looking for, read on!

 

 

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Bad-Credit Car Loans: Our Top Picks

Best for: Online applications
Carvana
Carvana Logo
OVERVIEW

Carvana is probably the easiest way to acquire a car with an unimpressive credit score. Established in 2012, it now makes purchasing cars an entirely web-based experience. With Carvana, you can say goodbye to the hassle of going to a dealership, especially if you’re looking for car loans with bad credit. Carvana doesn’t set high credit score requirements, so it’s perfect for those who don’t have time to improve theirs before buying a car. Most importantly, you can get used cars in excellent shape for a fair price. Read Review

  • Smoothest buying experience
  • Fully web-based process
  • Delivery available
Learn More
On Carvana Website
Minimum Loan Amount:
$1,000
Approval Speed:
24 hours
Credit Score Requirement:
N/A
Customer Support:
Excellent
Soft/Hard Inquiry:
Soft
Estimated APR:
3.90% - 27.90%
Best for: Lending marketplace
Auto Credit Express
Auto Credit Express Logo
OVERVIEW

Auto Credit Express is the place to go when your other deals fall through because of a bad credit score. It’s not a dealership per se, but it partners with a vast number of dealerships, many of which provide car loans with bad credit. Once you fill in their questionnaire, Auto Credit Express does the window-shopping for you. It finds vendors willing to make you an offer regardless of your credit score, possible bankruptcy in the past, or even car repossessions. Read Review

  • Large dealer base
  • No credit requirements
  • In-house financing
Learn More
On Auto Credit Express Website
Minimum Loan Amount:
Varies by lender
Approval Speed:
24 hours
Credit Score Requirement:
N/A
Customer Support:
Good
Soft/Hard Inquiry:
Soft
Estimated APR:
Varies by lender
Best for: Low interest rates
Capital One
Capital One Logo
OVERVIEW

As you probably know, Capital One is a bank, but it’s not nearly as strict as you would expect one to be. On the contrary, it’s probably the most lenient bad-credit car loan provider out of the four. The application process is straightforward, the interest rates are competitive, the calculators for figuring out your finances are excellent and its dealership network stretches across the US. Overall, Capital One is a great partner on your journey to a new car. Read Review

  • Competitive interest rates
  • Seamless procedure
  • Vast dealership network
Learn More
On Capital One Website
Minimum Loan Amount:
$4,000
Approval Speed:
24 hours
Credit Score Requirement:
N/A
Customer Support:
Excellent
Soft/Hard Inquiry:
Soft
Estimated APR:
2.99% - 24.99%
Best for: Multiple offers
myAutoloan.com
myAutoloan.com Logo
OVERVIEW

myAutoloan.com is another middleman you could turn to if you’re in need of a car loan with bad credit. It connects buyers with bad credit with sellers who think they can handle a client with a poor score. You can rely on myAutoloan.com to help you through the process, with the calculating tools on their website, detailed information on your vehicle of choice, as well as offers from their partners. Read Review

  • Partnerships with lenders and dealerships
  • All-rounder service
  • Useful financing-estimation tools
Learn More
On myAutoloan.com Website
Minimum Loan Amount:
$8,000
Approval Speed:
24 hours
Credit Score Requirement:
575 or higher
Customer Support:
Excellent
Soft/Hard Inquiry:
Soft
Estimated APR:
2.05% - 24.90%
Evaluation Criteria

Our Evaluation Methodology

Getting around without a car is a hassle, and not everyone has the perfect score needed to purchase one effortlessly. That is where bad-credit car loans come into play.

With the car itself serving as collateral, it is not risky for these lenders to help you out. Those willing to help you purchase your dream car, regardless of your credit come in the form of lenders, middlemen, car dealerships, or even banks with lenient credit score policies.

However, choosing the right route with that many options is not easy, so before you skip to the reviews, take a look at our methodology. It’s an explanation of how we evaluated these bad-credit auto loan companies and why we chose the criteria we chose.

Features

Considering that each of these companies has its own way of doing things, we underlined the differences in features. Each can get you a loan regardless of your bad credit, but some of them are dealerships with in-house financing, others are middlemen that do the window shopping for you, and one is an actual bank.

The point of the features section is to provide insight into what a company specializes in, so you ascertain which one fits your current situation best. After all, you don’t just need to know how to get a car loan with bad credit - you also have to find the right one.

Maybe you need a car dealership because getting the right car is more important to you than loan terms, or your credit score is super low, so you can’t afford to be picky. There are those only looking for trustworthy lenders and won’t accept gray areas. Whatever the case, you’re looking for good offers, and you can find them here. 

In other words, whatever their needs, everyone can find the best car loans for bad credit.

Credit Requirements

Bad credit makes it hard to know if you would get approved at a particular dealership, which is why this category can make or break your choice of intermediary.

Experian’s research shows that the average credit score needed to get a loan for a used car is 657, and 721 for a brand-new one.

However, the same research states that 30% of loans go to people with credit scores lower than 500. That percentage means that there are at least some options available for people looking for easy car loans with bad credit. Check the credit requirements section to decide if you should dedicate time to apply at these companies, or move on.

Financing Terms

For this section, we dug up the numbers you need to do the loan math. These aren’t usually emphasized on the companies’ websites, so it might be difficult to estimate the prices without filling out some forms first.

The good news is, all the companies on our list make soft inquiries when evaluating your request for a car loan with bad credit, so you can ask around without having to worry about the impact this might have on your already struggling credit score.

Customer Reviews

Don’t trust us? Check out the actual reviews of people who have tried and used their services. Even in the digital world, word of mouth is everything. A bad review can be a big deterrent for potential customers, and a good review means the world for every business.

Quick Breakdown

The Best Bad Credit Car Lenders for 2021:

Bad-Credit Car Loans: Reviews

Carvana Review

Quick Facts
4.5 stars Our Rating
Minimum Loan Amount:
$1,000
Approval Speed:
24 hours
Credit Score Requirement:
N/A
Estimated APR:
3.90% - 27.90%

Anyone looking to purchase a used car has stumbled onto Carvana’s website at some point. This fully online vehicle shopping experience started in 2012 and has dramatically impacted the car-sales world. Carvana now operates across the states, and its customer base is ever-growing.

Features

Carvana is a fully web-based car dealership. Car inspection, signing the papers, and arranging for delivery can all be completed from the comfort of your home. It’s also the perfect solution to buying a car with bad credit, as it imposes no FICO score requirements.

Carvana hosts a wide selection of used cars, and if you’re worried about purchasing a vehicle online without inspection - don’t be. The 360-degree view on each listing will show you every aspect of a car’s exterior and interior. The imperfections found on every car, such as scratches and dents, are all listed too, making for a completely transparent process.

Carvana is proud of its strict 150-point inspection process that ensures the impeccable condition of all its cars. There’s also a 7-day return policy, so you can take your ride for a spin before settling.

Unlike other bad-credit car loan providers on this list, Carvana conducts its business completely online. Not only will your bad credit not be an obstacle, but your experience of getting a car will also be as seamless as possible, and your new car will be delivered to your doorstep.

Credit Requirements

As mentioned, your bad credit is not something to worry about with Carvana. True, the prices might be a bit high, but this service will make sure you’re satisfied with its offer, unlike other online spots offering car loans for bad credit.

If you are 18 years of age, are earning $4,000 per year, and have no active bankruptcies, you are eligible to shop for used cars with Carvana. Make sure to use its excellent calculator to see some payment handling options.

Financing Terms

Carvana will take your credit history, individual income, and car price into consideration when setting up the sale terms. The terms will also vary depending on your vehicle of choice, but this is sadly unavoidable when buying a car with bad credit.

On the bright side, Carvana gives an estimated APR of 3.90% - 27.90%, and your loan can be as low as $1000. The company’s soft inquiry means checking the terms for multiple cars won’t make a dent in your already struggling credit score, leaving you enough room to choose carefully.

Customer Reviews

Online reviews are mostly kind to Carvana. While some people are uncomfortable with the online process, most are quite happy with Carvana, earning it a score of 3.6 on Trustpilot. The process was deemed smooth, and the Carvana agents handling low-credit car loans were friendly and knowledgeable. The majority of reviewers were happy about making a purchase or sale entirely online, without having to go through the “dealership adventure.”

Reasons to Apply:

  • Fully web-based process
  • Low initial prices
  • No FICO score limits
+ Show more

Auto Credit Express Review

Quick Facts
4 stars Our Rating
Minimum Loan Amount:
Varies by lender
Approval Speed:
24 hours
Credit Score Requirement:
N/A
Estimated APR:
Varies by lender

Auto Credit Express is the next best place to look for car financing, even though the company won’t be the one offering it, strictly speaking. Instead, Auto Credit Express will connect you with a dealership willing to work with you regardless of your credit. Since its founding in 1999, this company has worked to find low-credit auto loans for people from all walks of life.

Features

Unlike the previous option, Auto Credit Express does not sell cars or loan you money to buy one. What it will do is go through its 1,100-strong network of dealership partners based on the information you entered into its online loan request form. It serves as a middleman between you and your potential car dealer, matching you with an establishment or person nearby who can then make a deal with you for auto financing for bad credit.

Credit Requirements

Speaking of credit requirements, Auto Credit Express itself doesn’t have any, but a particular dealer might. The company will make sure that you are at least 18 years old, a resident of the United States or Canada, and have at least $1,500 - $2,000 in monthly income. Anything else you bring to the table can only serve to your advantage.

Any other requirements, including those concerning your credit score, are up to the dealership you get matched with. Auto Credit Express states that a credit score of 580 or better means having the best chance of approval for a bad-credit car loan. Still, you’re not out of options if your score is lower than that.

Some of the Auto Credit Express partner dealerships work with people with a declared bankruptcy or who have had a car repossessed before. In other words, it’s improbable your bad credit will rob you of a deal.

Financing Terms

Financing terms are not something you can look into with Auto Credit Express, as the company itself doesn’t offer any. It simply serves as a middleman between car dealerships offering car loans for people with bad credit and people who need them.

Once you choose a dealer, you can set up the terms with them directly. As with any deal, make sure to read the fine print.

Customer Reviews

Online reviews praise Auto Credit Express, giving it a score of 4.7 on Trustpilot. Customers are satisfied with the recommended dealerships, their experience on the platform, and, most importantly, their purchase.

Reasons to Apply:

  • 1,100+ dealerships
  • Recommendations based on your input
  • Works with low credit scores, bankruptcies, and repossessions
+ Show more

Capital One

Quick Facts
4.5 stars Our Rating
Minimum Loan Amount:
$4,000
Approval Speed:
24 hours
Credit Score Requirement:
N/A
Estimated APR:
2.99% - 24.99%

The only actual bank on this list, Capital One was founded in 1994 and has since become the trusted go-to lender for anyone looking to purchase a car. You might not expect a bank to be relaxed about your FICO score, but Capital One aims to please, and you won’t need a stellar credit history to get some decent options. A reliable financial institution partnering with plenty of dealers is a great place to get bad-credit auto financing.

Features

Capital One will help you through every step of the car-buying process. First off, you can apply for pre-qualification for the opportunity to see your potential monthly payments, APRs, and any offers for the vehicles you might want to purchase with Capital One’s help.

You can also rely on Capital One’s calculator to help you figure out your finances and create the perfect plan for paying the loan back. We were quite surprised to find a bank that was so welcoming and helpful with its guaranteed car loans with bad credit.

Capital One will scour its network to find the dealer closest to you. Keep in mind that the offers you get with the pre-qualification are valid exclusively with the bank’s partners.

Credit Requirements

You probably think you need a spotless credit score to qualify for a bank loan, but this is far from the truth with Capital One. Clients with scores of 500 and upward are eligible for pre-qualification, if they’re at least 18 years old, are US residents (again, excluding Alaska and Hawaii), and have a minimum monthly income of $1,500 - all very lenient for bank car loans for bad credit.

If you have a Capital One account, it must not be over the limit, past due, or delinquent, so make sure your accounts are in good standing.

Financing Terms

Interest rates are quite low, starting at 2.99%, and the loan amounts can start at $4,000.

Customer Reviews

Capital One’s online reviews will tell you its customers are satisfied with its customer service, its straightforward lending process, and its competitive interest rates. So if you are looking for a decent interest rate on car loans with bad credit, Capital One might be the solution.

Reasons to Apply:

  • Competitive interest rates
  • Seamless procedure and quick response
  • A vast network of car dealerships
+ Show more

myAutoloan.com Review

Quick Facts
4 stars Our Rating
Minimum Loan Amount:
$8,000
Approval Speed:
24 hours
Credit Score Requirement:
575 or higher
Estimated APR:
2.05% - 24.90%

Founded in 2003, myAutoloan.com is probably the most comprehensive marketplace for a car loan with bad credit.

Features

myAutoloan.com offers all the tools and resources you need in your search in one place. From the initial calculations to figure out the financial aspects of what you’re looking for, to the post-purchase warranty and insurance dealings, this company has you covered.

On its website, you will find calculators bound to help you figure out what expenses to expect. There’s an interest rate estimator, as well as a loan- and payment-amount calculator, all of which could greatly help inform your choice between auto loans for bad credit.

Your next step is to find a suitable vehicle. myAutoloan.com provides you with the resources to find the perfect ride, new or used. You can also check the history report for every car to see whether a recall notice was ever issued for that particular model, thus ensuring your safety.

Most importantly, this company will help you find a deal despite your low credit score. In fact, several of the companies partnering with myAutoloan.com, like 5kFunds, Web2Carz, and CashUSA, provide car loans for people with bad credit. Any one of them could be the solution to your bad credit struggles.

Credit Requirements

Specific credit requirements depend on the partner lender you decide to go with, but there are several general requirements for myAutoloan.com itself.

First of all, your FICO score should be 575, or higher. You also need to be at least 18 years of age and be a US resident (excluding Alaska and Hawaii). The minimum annual income is $21,000, and the minimum loan amount is $8000. If you fulfill these, plenty of lenders will give you a decent interest rate on car loans with bad credit.

Financing Terms

Financing terms with myAutoloan.com depend on the lender and the loan you take. Once you fill out myAutoloan.com’s form, lenders will contact you with some offers to choose between. You can expect an interest rate ranging between 2.05 and 24.90%.

Customer Reviews

With a Trustpilot score of 4.4, we can safely conclude myAutoloan.com’s customers were satisfied with its process. Most users were happy with the offer they got, as well as the sheer number of offers for car loans with bad credit they got.

Reasons to Apply:

  • Partnerships with lenders and dealerships
  • All-rounder service
  • Useful financing-estimation tools
+ Show more

Fortunly’s Guide to Car Loans

Getting a car loan when your credit score isn’t at its best might seem like an impossible task. Interest rates skyrocket, and your choice of cars is often limited.

You’ve probably tried your local dealership, but if your credit score is less than perfect, left empty-handed. Getting a cosigner for a better deal can easily turn into a relationship-breaker, and interest rates often seem better suited to paying off a space-shuttle than a bad-credit car loan.

Lucky for you, the sole purpose of this guide is to find ways for you to purchase your dream car regardless of your credit score.

What Constitutes a Bad Credit Score for Car Loans?

As we said before, there is no such thing as an unacceptable credit score for many car dealerships. The optimal credit score for purchasing a used car is around 600, so anything below may seem like a disaster, but rest assured - it’s not.

Your credit score is not the only thing to consider when applying for bad-credit car loans. The next most important thing lenders will look into is your debt-to-income ratio.

If you have a regular income from either a job or other sources, it will go a long way towards your approval. In fact, people who’ve never owned a credit card in their life have been making regular car payments for years. 

Prepping all of your documents before the meeting with dealerships, banks, or go-betweens, and having an explanation for any potential imperfections can be a crucial factor for gaining bad-credit auto financing approval.

To sum things up, ‘bad credit score’ is a term open to interpretation by almost every car dealership. After all, the car serves as the collateral, so they won’t be losing much if you don’t make your payments in time. Dealers can repossess and resell it to cover their losses. It would be best if you found time to improve your credit score before purchasing, though.

How Does Bad Credit Affect Car Loans?

Some people think it is impossible to get car loans with bad credit, but this is very far from the truth. Still, even if it doesn’t bar you from getting one or several, bad credit will impact the offers you will get.

Put simply, bad credit affects the terms of the loan. To be more precise, the down payment you’ll need to make will probably be higher than you might have planned for. The interest rates you’ll be charged might oscillate wildly, possibly reaching some very worrisome heights. On average, people asking for auto loans with bad credit end up paying interest rates four times higher than people with spotless credit scores.

Loan length has been rising in the last couple of years, but this isn’t as likely if you have poor credit.

How to Get a Loan with Bad Credit?

The process doesn’t differ much from attempting to get one with good credit, but there are some things to keep in mind.

The lender will ask you for employment and asset ownership, as well as the car you are planning to purchase, to figure out what kind of car loan for bad credit you’re eligible for.

In short, get your documents in order, make sure you dispute all irregularities on your credit score or spend some time improving it, and do your research online to find the best lender.

What To Look Out For?

There are plenty of dealerships with “buy here, pay here” signs that claim they can finance anyone regardless of their credit scores. It might sound like a good deal, but make sure the terms are reasonable. Interest rates of 20% to 30% are not uncommon for bad credit car loans, and you can rest assured companies charging that much aren’t making a living by selling cars.

If you accept these deals, you will have a hard time getting out of them. Most of these dealerships are very aggressive with their repossessions, with some of them taking the car back after a single day of delay on your payment. Repossessions can badly hurt your credit score, which could lead to further long-lasting struggles.

It is a better idea - practically mandatory, actually - to get pre-approved car loans for bad credit before you hit the dealership. With a fair and valid deal already in your hands, dealers might be incentivized to offer you a better one.

Another thing to pay attention to when you have bad credit is the type of car you are buying. You should go for a car that won’t make a huge dent in your budget, whose price you can convert into reasonable payments. You don’t want to overextend yourself, so make sure you can pay the bad-credit auto loan off.

Can a Car Loan Help Your Credit?

Yes, by adding to your payment history and credit mix. Some of the lenders don’t report payments to bureaus, however, so it’s crucial to check for this before choosing one.

If you pay your bills on time, it will be a huge bonus for your credit score, as payment history counts more than other factors. A loan can also be a welcome addition to your credit mix, especially if you only had credit cards so far.

Anything that can improve your credit score is worth your attention, even bad-credit used-car loans. Try making your payments on time, create a plan to get rid of any debt you might have, and the next loan you take out will probably have much better terms.

FAQ
Can I get a car loan with very poor credit? +

Yes, you can. There are plenty of companies, banks, middlemen, and dealerships that offer bad credit loans to people. Check the reviews above to find the best car loan provider for you.

What banks offer auto loans for bad credit? +

If you want a bank to give you a bad-credit car loan, check out the Capital One review above. Bank of America and US Bank, among others, will also give people with imperfect credit car loans.

Can I get a car loan with a 450 credit score? +

You can probably find a lender to give you an offer with that score with the help of one of the companies we reviewed above.

What is the lowest credit score to buy a car? +

Your credit score is not the first criterion to determine if you can buy a car or not. Occasionally, people with poor credit that haven’t missed a car payment will be approved for an auto loan regardless of bad credit.

Most providers work with a score of 550 at the lowest, but there are alternatives if your score is below that. Check out the list of companies mentioned above to find the best loan provider for your new car.

Which loan company is best for bad credit? +

All companies mentioned above can either offer or find great loans for bad credit. Carvana, Capital One, myAutoloan.com, and Auto Credit Express are all excellent choices for this.

How can I get a car with bad credit and no cosigner? +

If possible, try improving your credit score first. While you might be able to get bad-credit car loans without a cosigner, it’s always a better idea to postpone your purchase until you’re in a better negotiating position.

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