5 Best Auto Loans for Bad Credit of 2024


Buying a car can be stressful when you have bad credit. It can be difficult to get approved for a car loan, and bad credit car loans usually come with higher interest rates and larger down payments.

While some lenders may not approve your loan application, there are several places you can turn for an auto loan, even with poor credit scores.

Here are our top bad credit auto lenders for 2024, along with tips on how to get the best auto loan.

5 Best Bad Credit Car Loans

Finding the best car loans with bad credit is one of the most important steps when buying a car. Here are the top 5 bad credit auto loans that make it possible for you to get behind the wheel without breaking the bank.

1. Auto Credit Express

Crediful’s rating
Visit Site
  • Minimum credit score: 400
  • Loan term: Up to 72 months
  • Accepts applicants with bad or no credit and even past bankruptcy
  • A+ BBB rating

Auto Credit Express specializes in bad credit car loans. Applicants may qualify with bad credit, no credit, and even if you’ve had a bankruptcy in the past.

They’re also known for approving auto loans for older vehicles that have high mileage, whereas traditional lenders typically turn down these types of requests.

You’ll need a credit score of at least 400. You can get approved with as little as zero or $500 down payment. So, you can get a car loan with bad credit from Auto Credit Express even if you don’t have lots of cash on hand.

You will, however, need a steady income to get approved, with a monthly pre-tax salary of at least $1,500.

Expect to be asked some questions about your employment situation, such as how many hours you work a week, how much overtime you get, etc. However, the loan application only takes three minutes to complete online.

Read our full review of Auto Credit Express

2. CarsDirect

Crediful’s rating
Visit Site
  • Minimum credit score: none
  • Loan term: Up to 72 months
  • Connects you with dealers within quickly
  • A+ BBB rating

CarsDirect is a great place to shop if you want to purchase and finance a car, but you have a low credit score.

Their auto loan program allows you to fill out a brief application form, then connects you with offers from dealers within 24 hours.

You can then shop for both new and used cars through the dealer with a customized auto financing plan already in place.

CarsDirect caters to borrowers with all types of credit. They work with people who regularly have FICO scores below 640 and those with recent bankruptcies.

Some lender partners also offer the option to get a bad credit car loan with a cosigner. That allows you to take advantage of better interest rates and loan terms.

Read our full review of CarsDirect

3. car.Loan

Crediful’s rating
Visit Site
  • Minimum credit score: none
  • Loan term: Up to 72 months
  • All credit accepted. Lease, buy, or rent.
  • Same-day approval

car.Loan helps consumers access bad credit auto loans that may otherwise be difficult to find.

The website matches you with dealers who can finance you regardless of credit type. Then, once you’re approved online, you can go car shopping in your area with your pre-approval in hand.

Car.Loan.com partners specifically with a dealer network that concentrates on special finance. These dealerships utilize in-house bad credit auto financing, allowing them to focus more on an applicant’s income rather than their credit score.

Plus, the process helps you know exactly where you should be shopping for a car. It combines the convenience of online financing with an in-person vehicle search.

It takes just three minutes to fill out a request form. From there, you’ll typically receive a response within 24 hours, meaning you could proactively begin your car hunt within just a day or two.

Read our full review of car.Loan

4. myAutoLoan

Crediful’s rating
Visit Site
  • Minimum credit score: 575
  • Loan term: 24 to 84 months
  • A+ BBB rating

You can get a new or used car loan at myAutoLoan. They also offer private party, lease buyout and refinance loans. myAutoLoan matches you with online lenders to provide up to four auto loan offers in as fast as four minutes.

Credit scores of at least 575 are required. Because myAutoLoan works with multiple lenders, you may find lending guidelines less restrictive. For example, there are no set rules on whether you’ll need a down payment or how much you can borrow.

Instead, each lender has its own policies when analyzing your credit history, income, loan amount, down payment, and loan term. You’ll also find various funding options, including ACH, check, and bank deposit.

You can review all the offers you qualify for without any obligation to accept any of them. Still, myAutoLoan puts each application through a patented analysis process to make sure you’re matched with relevant auto loans.

Read our full review of myAutoLoan

5. Carvana

Crediful’s rating
Visit Site
  • Minimum credit score: none
  • Loan term: 12 to 72 months
  • Quick application

Carvana’s unique value proposition is that you can get a car loan, choose a vehicle, and buy a car all in one place. The company has a large selection of used cars to choose from, and there is no credit score requirement.

To get started, you’ll fill out a quick survey of what you’re looking for in a car. Carvana will then match you to several vehicles.

Once you’ve chosen a vehicle, they’ll run a soft pull on your credit to preapprove you for an auto loan. Once you finalize the loan application, Carvana will do a hard pull on your credit.

young lady in car

How Bad Credit Affects Your Auto Loan

Your credit score affects just about anything you do that involves borrowing money, including getting a car loan. There are several ways your credit score influence the terms of your auto loan.

Perhaps the most important factor is the annual percentage rate or APR. The APR will impact how much your monthly payment will be. It also determines the total amount you will pay for the car over the life of the auto loan.

The lower your credit score, the higher your interest rate, and the higher your monthly payments will be. You’ll also be limited as to how much money you can borrow.

If you have a poor credit score, it’s unlikely that you’ll qualify for a high-dollar loan amount. As a result, your car search will be limited to the loan amount you’ve qualified for, whether you think you can afford it or not.

How can I get an auto loan with bad credit and no money down?

With a subprime credit score, you’ll most likely need a down payment. While some online lenders specialize in bad credit auto loans with no money down, many will require a down payment. And if you want to buy a more expensive car than the loan you qualify for allows, you’ll need to make up the difference with a larger one.

Lenders might limit the amount of time you have to repay your auto loan if you have a bad credit score. Some auto loan lenders may give you a shorter repayment plan, so they get repaid faster. While you may save money on interest over time, that could result in higher monthly payments.

As with any financial decision, it’s essential to strike a balance between affording your monthly loan payment and finding a car that meets all of your requirements. If you end up buying something too cheap, you could end up spending a ton of money at the mechanic every month or two. So instead, take a look at your financial situation holistically to weigh the pros and cons of the loan amount you can reasonably afford.

6 Tips for Getting a Car Loan When You Have Bad Credit

A few simple steps can make a world of difference in the types of loan terms you receive. Pay careful attention, so you can minimize your monthly payment.

1. Review Your Credit Report

Before you start car shopping, obtain a free credit report from each of the three major credit bureaus and check it for accuracy. Your credit reports directly impact your ability to borrow money for a vehicle. After all, the information listed on them plays a significant role in your credit score.

Even if everything is accurate, you need to know exactly what information auto lenders are looking at when reviewing your loan application. If you don’t check your credit reports, you won’t know if what’s being reported about you is actually true, and you could end up with higher interest rates.

2. Create a Budget Based on Your Current Finances

Once you’ve reviewed your credit history, it’s time to figure out your budget. You need to consider both the total amount you want to pay for a car and the total monthly payment you would like to make. The two are related, but you should come to each amount separately.

For instance, both the loan amount and your interest rate contribute to your monthly payment amount. However, even if you can afford a certain amount for a car, that doesn’t mean you have to spend that much.

Make sure the sales price accurately reflects the condition and mileage of the specific car you’re considering. Next, find your target monthly budget using an auto loan calculator and inputting different interest rates and price points.

3. Negotiate the Purchase Price

With bad credit, you may not be able to change your interest rate, but you can negotiate the purchase price of the vehicle. The actual sales price doesn’t have anything to do with your credit score.

In fact, your car salesperson shouldn’t know anything about your credit history. Try a few simple negotiation tactics to help lower your monthly payment, especially if you know you’re getting a high interest rate.

First, try shopping at the end of the month when the sales team is trying to hit target numbers. Furthermore, try to go during off-hours, like on a weekday morning.

You will be much more likely to seal the deal when there are fewer potential car buyers in the showroom. You can also shop around several dealerships to compare prices and use competitors as leverage for a better deal.

4. Avoid Unnecessary Upgrades

Even if you’re a great negotiator, remember that car salespeople are trained to make a deal that’s good for them. That involves using all sorts of psychological tricks to get to the number they want.

An easy way for them to do this is through upgrades, even when you’ve successfully negotiated a better sales price.

It’s easy to get sucked into spending a few thousand dollars on a custom paint color, seat warmers, leather interior, or even a warranty plan. And that can quickly derail your plans to stay on budget for your monthly car payment.

Avoid this scenario altogether by adopting a strict no-upgrade policy before entering the dealership. Then, paired with a maximum purchase price in mind, you’ll safely meet your financial targets.

5. Carefully Review Your Loan Agreement

Make sure to read all the details before you sign anything for a bad credit auto loan, whether you get it from an online lender or a dealership financing department.

It’s not safe to assume that everything is standard. There are many details you should confirm before moving forward with the auto loan.

First, double-check that all the information is accurate, including the sales price, interest rate, applicable fees, and even the make and model of the car.

Additionally, make sure you don’t fall victim to “yo-yo” financing. This happens when you “purchase” the vehicle without finalizing your auto loan with the dealership.

Shortly afterward, they will notify you that your financing fell through, and you’re required to sign a contract at a higher APR. Get everything finalized and confirmed before you take the car off the lot.

6. Check with a Credit Union

Credit unions tend to have better auto loan rates and fewer fees than big banks. They also sometimes have more flexible credit requirements.

If you’re not already a member, you may want to join a local credit union. Then, open a checking account, savings account, or credit card. Once you’ve established a relationship with the credit union, ask them about getting a bad credit car loan.

7. Use Your Car Loan to Repair Your Credit

When you finalize your auto loan terms, commit to being a responsible borrower. Repaying an installment loan is a great way to repair your credit, and it’s simple to do.

Of course, late payments will hurt your credit score and result in expensive fees. But as long as you stay on top of your payments, you can really benefit from having good credit. In fact, with good to excellent credit, you may even be able to refinance your car for a better interest rate.

Frequently Asked Questions

What are bad credit auto loans, and how do they work?

A bad credit auto loan is basically the same as a regular auto loan, but it usually comes with a higher interest rate and sometimes a larger down payment. Most lenders don’t offer bad credit auto loans, but some lenders specialize in them. 

Can I get a car loan with a 500 credit score?

It is possible to get a car loan with a 500 or lower credit score. However, bad credit auto loans typically come with higher rates and less favorable terms.

If you have time, try to improve your credit scores as much as possible before applying for a car loan to get a better deal. Another option is applying with a cosigner who has good credit.

Which car company is best for bad credit?

After comparing the banks, credit unions, and online lenders that specialize in bad credit car loans, we believe Auto Credit Express is the best. They have the lowest minimum credit score requirements of the bad credit auto loan providers that we reviewed. They’ve also have over 23 years of experience working with bad credit borrowers.

Can I get a brand-new car with bad credit?

It’s typically easier to get financed for a used car than a new one when it comes to bad credit car loans. The simple reason for this is that new cars are generally more expensive. When you get a bad credit auto loan, you typically won’t qualify for as much as you would with good credit.

What’s the lowest credit score you can get a car loan with?

When it comes to bad credit auto loan lenders, the minimum credit score varies. Some auto lenders have specific requirements, while others don’t require you to have a credit score at all.

Can I get a car loan if I’m unemployed?

Most auto lenders require proof of employment. However, some lenders may approve unemployed borrowers who have other sources of income, good credit scores, a cosigner, or a bigger down payment.

Can I get a car loan after bankruptcy?

Very few lenders will approve you for a car loan after a bankruptcy, but some will. But again, whenever applying for a bad credit auto loan, the interest rates will most likely be higher. It’s a good idea to fix your credit scores after a bankruptcy before you apply if you can.

Am I more likely to get approved with a cosigner?

Yes. Having a cosigner with solid credit scores will significantly increase your chances of getting approved for an auto loan. You’re essentially using the cosigners credit profile to guarantee that you will pay the loan back. If you default on the loan, they will have to make the monthly loan payments.

Meet the author

Crediful is your go-to destination for all things related to personal finance. We're dedicated to helping you achieve financial freedom and make informed financial decisions. Our team of financial experts and enthusiasts brings you articles and resources on topics like budgeting, credit, saving, investing, and more.