Compare lenders to find the best bad credit auto loan for your situation.
Bad credit auto loans with reasonable interest rates can be difficult to find. While it may be hard to secure an auto loan with poor credit, it’s not impossible. Many auto lenders specialize in providing auto loans for bad credit drivers.
In this review, we’ll list several auto loan providers that offer loans for drivers with low credit, no credit, and bankruptcies. We’ll also provide tips for how to apply for a loan when you have bad credit and how to improve your credit score. While the lowest rates with the best auto loan providers may not be available to those with poor credit, a low credit score doesn’t mean a reasonable car loan is impossible to find.
Can I Get A Bad Credit Auto Loan?
You can find bad credit auto loans from a variety of legitimate lenders on the market today. Some of these lenders have minimum credit score requirements, while others do not. However, you will need to show some form of regular income. Most bad credit auto loans require you to make at least $18,000 per year.
That said, it may be difficult to find a bad credit car payday loans Greenhills Ohio loan with a low interest rate if your credit score is under 600. When you look for auto financing, seek out lenders that offer prequalification. Prequalification allows you to see interest rate offers without the loan company performing a hard credit check. A hard credit check can further hurt your credit score.
Be prepared to face higher interest rates if you have poor credit. However, you can reduce the amount of interest you will pay on a bad credit auto loan if you place a bigger down payment or choose a shorter loan payoff period.
How Much More Do You Pay For A Bad Credit Auto Loan?
Having a low credit score will make the loan more expensive in the long run. Let’s say you take out a $15,000 loan to pay for a new car. You’ll pay more than $15,000 by the time the loan is over.
How much more depends on the interest rate. According to Experian’s State of the Automotive Finance Market report, the average interest rate for borrowers with very poor credit is percent in 2021. These borrowers have credit scores between 300 and 500.
If you borrow $15,000 and pay an interest rate of percent on a 60-month loan, you’d end up paying $21,218 in total. That means you paid $6,218 in interest, which is over a third of the value of the loan.
- Borrow: $15,000
- Interest rate: %
- Pay over 60 months: $21,218
Now, if you were able to improve your score above 500, you might find rates around percent. Those few points make a big difference, and you’d pay almost $2,000 less when all is said and done.
- Borrow: $15,000
- Interest rate: %
- Pay over 60 months: $19,582
17 Auto Loans For Bad Credit Drivers
The list below names 17 auto loan providers that offer loans to drivers with bankruptcies and/or poor FICO credit scores. Several of the companies listed below even specialize in bad credit auto loans. Which lender will work best for you depends on your specific circumstances, but this list is a good place to begin your search.
Don’t hesitate to submit loan applications to companies that allow you to prequalify without a hard credit check. You should only agree to a hard inquiry once you plan to accept the loan offer (and after comparing prequalification offers). That said, if you end up submitting multiple full credit applications within a 30 day period, the credit bureaus will usually count them as a single inquiry.