5 Best Lenders for a Preapproved Auto Loan with Bad Credit


Shopping for a new car can be an unnerving process. You want to find the vehicle that will be the best fit for your lifestyle and budget, but it’s easy to feel like the dealer is in charge of the entire process.

man in front of car

This is especially true if you have bad credit and aren’t sure if you can get approved for an auto loan. Getting preapproved for a car loan is one of the best ways to combat this problem.

Getting preapproved for a car loan doesn’t guarantee that you’ll receive the funds, but it does give you a realistic picture of what you have to work with. Preapproval can help you figure out your budget and give you more confidence when you walk into an auto dealership.

Auto Lenders for Borrowers With Bad Credit

If you have bad credit, you may be wondering what lenders will even be willing to preapprove you for an auto loan. Perhaps you’ve been denied by your local bank or credit union. Fortunately, many lenders are willing to work with borrowers that have bad credit.

Of course, many of these bad credit auto loans can come with sky-high interest rates and unfavorable terms. Listed below are five reputable lenders who work with borrowers who have bad credit scores.

1. Auto Credit Express

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  • Minimum credit score: 500
  • Loan term: Up to 72 months
  • A+ BBB rating

Auto Credit Express specializes in dealing with borrowers who have a poor credit history or have even gone through bankruptcy. The company is an online dealer network that has a large database of lenders.

When you’re looking for a lender that accepts borrowers with bad credit, you can run into some pretty sketchy companies.

However, Auto Credit Express has an excellent reputation for dealing with borrowers. They’ve been in business since 1999 and have closed over $1 billion in bad credit auto loans.

To get preapproved, you must be employed full-time and earn at least $1,500 per month. There are no minimum credit requirements to apply, and the application process is simple.

2. Car.Loan.com

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  • Minimum credit score: none
  • Loan term: Up to 72 months
  • Same-day approval

Car.Loan.com is a free loan locating service that matches borrowers up with bad credit auto financing. They partner with auto dealers from around the country, which allows them to connect borrowers with a local dealer.

Loan qualifications and requirements will vary based on the individual dealer that you’re matched up with. You can get started quickly and easily with their online auto finance request form. You will usually hear back from a representative within 24 hours.

3. myAutoloan

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  • Minimum credit score: 575
  • Loan term: 24 to 84 months
  • A+ BBB rating

MyAutoloan is an online lending network that matches borrowers with lenders across the country. The company is willing to work with borrowers that have bad credit, and you can receive funding in as little as 24 hours.

If you’re approved, they will send you an online loan certificate or check that you can take with you to the dealership. And there are no restrictions on your purchase, so you can buy any vehicle you want.

4. Carvana

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  • Minimum credit score: 450
  • Loan term: 12 to 72 months
  • Quick application

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

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.

5. Capital One

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  • Minimum credit score: 500
  • Loan term: n/a
  • A- BBB rating

If you earn a minimum monthly income between $1,500 and $1,800, you can apply for an auto loan with Capital One. And the bank will do a soft pull on your credit so that it won’t damage your credit score further.

However, there are some restrictions on taking out a bad credit car loan through Capital One Auto Finance.

Your vehicle can’t be more than 10 years old, and it has to have less than 120,000 miles on it. They also have a minimum credit score requirement of 500 to qualify.

How to Get Preapproved for Your Loan

Getting preapproved for an auto loan is an essential first step since it can make the entire process easier. You’ll have greater negotiating power once you head to the dealership. It will also give you an idea of what your maximum loan amount and interest rate will be.

Once you know how much car you can afford, you can use an online loan calculator to get an idea of what your monthly payments will be. You can adjust the interest rates and loan amount to see your options.

This will allow you to focus on finding the car that’s right for you instead of worrying about what your monthly payment will be and whether you can afford it. Listed below are three steps you can take to make the preapproval process a bit smoother.

Check Your Credit

You should always review your credit reports before applying for a new auto loan. Even if you know your score is lower than you would look, it’s still useful to take a look at your credit reports. There could be incorrect or outdated information on there, and removing those items could help you improve your credit score.

Save for a Down Payment

Bad credit car loans usually require a down payment. The larger your down payment is, the easier it will be to get approved and the more favorable rates and terms you will get.

Make Sure Your Paperwork Is in Order

Any lender is going to want quite a bit of information from you before they are willing to preapprove you for a bad credit auto loan. So, it helps to get your paperwork in order before you apply for preapproval.

You should have the following information on hand before applying:

  • Your driver’s licenses
  • Social Security Number
  • Employment information
  • Proof of income

Check With Multiple Lenders

If you have a poor credit history, it may be tempting to go with the first lender that preapproves you. But you should always compare lenders because the first offer you receive may not come with the most favorable terms.

The interest rate you end up with will have a big impact on your car loan payment and how much money you’ll pay over the life of the loan. So, you should apply for preapproval with multiple lenders and compare each of the loan offers carefully. You may be surprised to find that you end up receiving better terms than you thought.

Frequently Asked Questions

How does preapproval work for a car loan?

An auto loan preapproval entails a lender reviewing your credit report, credit score, employment history, and other factors to determine a loan amount and interest rate that they are willing to extend to you.

It’s wise to get preapproved for an auto loan for several reasons. First, it helps you set a realistic budget because it lets you know how much you can borrow. Second, it can strengthen your negotiating position because you’re now a “cash buyer” with a blank check in hand. Finally, it gives you peace of mind and makes the car shopping process easier.

A preapproval may result in a hard credit pull on your credit report, which can slightly affect your credit score temporarily.

Does preapproval guarantee a car loan?

It’s not a 100% guarantee, but it essentially guarantees a car loan. In rare cases, there may be issues after the preapproval that may cause the lender to back out of the car loan.

Can you get approved for a car with a 500 credit score?

It’s definitely possible to get preapproved for a bad credit auto loan with a 500 credit score. However, your interest rate will be much higher than if you had a good credit score of 670 or higher.

Does preapproval hurt your credit score?

In some cases, the credit check for preapproval may result in a hard credit inquiry. However, many online lenders are performing soft credit inquiries for preapproval nowadays. Then, when you go through with the loan, they perform a hard credit inquiry.

A hard credit inquiry will typically only temporarily lower your credit score by about five to ten points.

Which banks offer preapproval for car loan?

Most banks, credit unions, and online lenders offer preapproval for car loans. You can generally apply online, over the phone, or in person at a local branch.


Getting preapproved for an auto loan can make the entire car buying process much easier. It will give you more confidence when you’re car shopping and will make it easier to focus on finding the vehicle that’s right for you.

This is especially important for car buyers with bad credit because it will give you peace of mind. And it can help you avoid taking out an auto loan with a high interest rate. If you have a hard time getting preapproved, you might consider applying with a qualified cosigner.

Once you’ve purchased the car, this is an excellent opportunity to begin improving your credit score. Make sure you pay your car loan on time every month and take steps to start rebuilding your credit.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.