Auto Loans for Bad Credit

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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Best auto loans for bad credit in 2023

Written by Jenn Jones | Edited by Katie Lowery | Updated January 30, 2023

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

LenderStarting APRTermsAmountsBest for…
OpenRoad Lending 2.79%12-72 months$7,500 to $80,000Auto purchase
Capital One5.79%36-72 months$4,000 and upOverall purchase
Carvana6.85%36-72 monthsUp to $85,000Online car buying
New Roads11.00%36-84 monthsNot specifiedPreapprovals

How we chose our picks for bad-credit auto loans

A bad-credit auto loan is simply a regular auto loan from a lender that is willing to work with borrowers with poor credit scores. To help you sort through the competition and get the best rate for you, we examined thousands of bad-credit car loan applications from those with FICO Scores of 619 or lower. These four companies offer a wide range of terms, flexible loan amounts and preliminary decisions in as soon as a few minutes to borrowers with FICO Scores below 620.

capital one logo

Capital One: Best overall for bad-credit auto loans

Capital One loan details
Starting APR5.79%
Loan terms36-72 months
Loan amounts$4,000 and up

A well-known national bank, Capital One auto loans had the lowest average closed loan APR for borrowers with subprime credit scores. It doesn’t specify a minimum credit score requirement, but Capital One does require monthly income of at least $1,500. You could get prequalified online at Capital One before going to the dealership so you’ll have an idea of the terms you qualify for, though you won’t know your exact rate or terms until you apply.

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OpenRoad Lending

OpenRoad Lending : Best for bad-credit auto purchases

OpenRoad loan details
Starting APR2.79%
Loan terms12-72 months
Loan amounts$7,500 to $80,000

While OpenRoad specializes in auto refinance, it offered one of the lowest average APRs in 2022 for bad-credit purchase loans on the LendingTree platform. It has new and used car loans available for a wide variety of terms and one of the lowest starting APRs. You may not have to make a down payment, as OpenRoad allows up to 120% financing (and up to 175% in some cases, depending on credit).

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new roads logo

New Roads: Best for preapprovals

New Roads loan details
Starting APR11.00% to 26.00%
Loan terms36-84 months
Loan amountsNot specified

While Capital One offered the lowest average APRs to customers on the LendingTree platform, it only offers an online prequalification. New Roads, however, offers preapproval, a firm offer you can take to a dealer of your choice. New Roads offers loans between 36 and 84 months and also considers borrowers with bad credit or no credit, as well as those with past bankruptcies. It offers loans in 30 states — see the full list here.

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carvana logo

Carvana: Best for completely online car buying

Carvana loan details
Starting APR6.85%
Loan terms36-72 months
Loan amountsUp to $85,000

You can’t use a Carvana auto loan for just any car — it can only be used on the e-commerce platform. But if you’re in the market for a used vehicle and credit is a concern, Carvana considers all types of credit and puts the whole car buying process online. You could shop, buy, finance, trade in your old car and schedule delivery of your new ride, all without speaking to a salesperson. Carvana also allows borrowers to add a cosigner to their auto loans.

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How to get a car loan with bad credit

Check your credit score

You know your credit score is in the poor range, but do you know your exact score right this minute? Credit scores can change within days or even hours, so it’s helpful to know exactly where you stand before applying for an auto loan. If your score seems suspiciously low, make sure there are no errors on your credit report, which can be checked at AnnualCreditReport.com.

Apply to multiple lenders

Bad-credit car loans are expensive, so shop around and don’t take the first offer you get. Any applications you fill out within a two-week window will count as only one hard inquiry on your credit report.

Average car loan rates (APR) by credit score

Credit scoreUsedNew
300-50019.81%12.93%
501-60015.86%10.11%
601-6609.81%7.25%
661-7805.47%4.90%
781-8503.69%3.84%

*Source: Experian, Q3 2022

As you can see, those with the lowest credit scores tend to pay the highest rates, which can add up to thousands more in interest charges over the life of your auto loan. That’s why it’s important to make sure you receive an offer directly from a lender — dealers can make money by inflating your APR.

Start with your own bank, credit union or online lender. Then, compare those offers to others you receive through platforms like LendingTree, where you could fill out a single form and receive up to five loan offers from lenders, depending on your creditworthiness.

Increase your chances of getting approved

If you aren’t approved right away or you’ve been turned down before, it could be worth waiting to apply for a loan while you work to improve your credit. But if you need a car loan now, consider these options.
  1. Find a cosigner. Ask someone you trust — and who trusts you — who has good credit to cosign the auto loan for you. By cosigning, they agree to pay back the loan if you default or else take a big hit to their credit score. You may qualify for a lower rate by using a cosigner because lenders may see the loan as less of a risk.
  2. Consider buying a car with 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.
  3. Buy from a private seller, not a dealer. Used cars sold by private sellers typically cost less than those sold by dealers and can be financed with cash or a private party auto loan.
  4. Use a personal loan. Some personal loans don’t require strong credit and may be used to purchase a car. But be careful: rates could be as high as — or higher than — a bad-credit auto loan.

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