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Bad Credit Auto Loans of 2022

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Auto loans are secured loans that help borrowers pay for a new or used car. If you need a new set of wheels but your credit isn’t great, you may be able to get auto financing from a lender that specifically markets to people with credit problems. A bad credit auto loan is just a typical auto loan, but it will most likely come with a higher interest rate based on your credit score and other factors. Auto loans let you borrow the money you need to purchase a car. They are available from dealerships and a variety of lenders.

Getting a car loan when you have bad credit can be a challenge, especially if you have poor credit. Not only will it be difficult to find approval, but auto loans for bad credit often come with higher interest rates. Not all lenders offer bad-credit car loans. However, there are some lenders that market specifically to people with lower credit scores.

That is to say, if you have a low credit score, you still have options for auto loans. You can get bad credit car loans from a number of banks, credit unions, dealerships, and online lenders. Typically, you’ll pay a higher interest rate. However, you don’t have to settle for the first offer you come across. so it’s especially important to always shop around and compare multiple loan offers.

Therefore, you should look for lenders with a low or no minimum credit score, or other criteria indicating they work with borrowers who have poor credit. These could be lenders with no minimum income or credit history requirements, or those willing to accept past bankruptcies. Meanwhile, in this article, we’ll be listing some analyzed auto loans for bad credit by top financial advisors.

What is a Bad Credit Auto Loan?

Bad credit loans are designed for people who have little to no credit history. A bad credit loan is for someone whose credit score isn’t high enough to receive a loan from a traditional financial institution. According to the FICO credit score range of 300 to 850. A score below 580 is considered to be a bad credit score.

Meanwhile, financing a car simply means getting a car loan. Auto loans are secured loans that use the car you’re buying as collateral. Rather than pay cash up front, you are typically asked to pay a fixed interest rate. That is to say, car financing requires that you take out a car loan and pay it back over time, usually with interest. Many dealerships offer their own financing, but you can also find auto loans at national banks, local credit unions, and online lenders.

A bad credit score for an auto loan is generally defined as mid-600s or below. Unfortunately, if you have bad credit, it may be tougher for you to get a car loan. The lender will see this as a negative since many of them will request to see your recent credit reports before offering you a loan. You may have to face less favorable terms or even predatory lending practices.

However, bad credit does not necessarily signal the end of the road for car shoppers. You still have options for auto loans even if you have a low credit score. In fact, coming to the negotiating table with preparation and research can help you find a loan at a much lower rate. You can get bad credit car loans from a number of banks, credit unions, dealerships, and online lenders.

Best Bad Credit Auto Loans

Moreover, just as we mentioned above, a bad credit score does not mean the end of the road for car shoppers. Below are some of the auto loan providers that offer loans to drivers with poor or bad FICO credit scores.


Auto Credit Express

  • Best for: finding a bad-credit dealer and lender
  • Loan Amount: $5,000-$45,000
  • Minimum Credit Score: 400

Auto Credit Express is a bit different from most other lenders on this list. Auto Credit Express does not make auto loans. Rather, it connects car buyers with dealers and lenders that may be able to approve a car loan based on preliminary information submitted by an applicant. Read more on how Auto Credit Express works.


  • Best for Online purchase and financing
  • Loan Amount: $1,000-$100,000
  • Minimum Credit Score: N/A

Carvana does not specify a minimum credit score, but it does require applicants to make at least $10,000 per year. You can complete the credit application and financing process at the same place if you have found a car through Carvana. It provides a more modern way to shop for a new or used car. You can shop for your car online, and apply for auto financing through the website. Rather than walking the dealership lots while hoping to avoid those aggravating salespeople.

Capital One Auto Refinance

  • Best for Refinance and prequalification
  • Loan Amount: $4,000 and above
  • Minimum Credit Score: N/A

Capital One is one of the largest auto loan lenders in the United States. Capital One offers auto loans to consumers of all credit histories, it doesn’t have a credit score requirement. However, it requires you to make at least $1,500 or $1,800 per month depending on your credit.

How to Get a Bad Credit Auto Loan

Furthermore, here are a few tips to improve your chances of finding the best auto loan and getting approved with a bad credit score.

  • Find a cosigner: Ask someone you trust — and who trusts you — who has good credit to cosign the bad credit auto loan for you. If a family member or close friend can cosign on your loan, the lender will take their credit situation and income into consideration. Which means you can secure a lower interest rate. By cosigning, they agree to pay back the loan if you default or else take a big hit to their credit score.
  • Consider buying a car for cash: Used cars are less expensive than new ones and you may be able to buy one for the same amount you’d put down on a new car. Plus, paying cash means a credit check is unnecessary. Read more about when it makes sense to buy a car with cash.
  • Put more money down: If you have a lower credit score, making a down payment on a car can increase your chances of securing and getting approved for an auto loan. If you can make a larger down payment, there will be less of the vehicle’s value to finance. You can generally get better interest rates by making a larger down payment.
  • Buy from a private seller, not a dealer: Used cars sold by private sellers are typically less than those sold by dealers and can be financed with cash or a private party auto loan.
  • Use a personal loan: Depending on your credit score, you might find it easier to qualify for a personal loan. Some personal loans don’t require strong credit and may be used to purchase a car. However, interest rates could be higher than a bad credit auto loan.

Final Thoughts

In conclusion, it may be tougher for you to get a car loan. But it is possible to get an auto loan with very poor credit. You will likely find a lender willing to approve a loan for you regardless of your credit score. Although you may face less favorable terms or even predatory lending practices. Moreover, there are some lenders that make loans only available to people with bad credit. But it is usually with a very high rate.

However, coming to the negotiating table with preparation and research can help you find a loan at a much lower rate. The key is to find the lender with the lowest rate possible and a payment you can afford. So you can buy the car you need, make payments on time and build your credit. You can also check out other similar posts on financial advice.

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