Bad Credit Car Loans in 2024

Compare rates with lenders that offer car 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 appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Written by Carol Pope | Edited by Amanda Push | Updated May 28, 2024

Autopay: Best for comparing loan offers

(329)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

(329)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

5.69%

24 to 96 months

$2,500-$100,000

550

Pros

  • Can prequalify for more than one car loan at a time
  • Extra-long maximum loan terms
  • Can include a co-borrower

Cons

  • Does not advertise a maximum APR
  • Fees are not disclosed (and will vary by lender)
  • Does not approve borrowers with no credit

What to know

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Autopay is a loan marketplace. Instead of offering car loans directly, it links potential borrowers with partner lenders. You’ll fill out one application and Autopay will present you with a group of loan offers. Using a marketplace can make it easier to find the cheapest rate since you’ll have multiple offers to compare.

Autopay doesn’t disclose its maximum APR, which isn’t ideal. Lenders only give their minimum APRs to people with excellent credit. Autopay’s advertised rate won’t apply to bad credit car loans.

Read our full Autopay marketplace review.

How to qualify

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Although Autopay has lenders in its network that offer bad credit car loans, you need a credit score of at least 550 to qualify. It doesn’t offer any other insight into its borrower requirements, but you can prequalify online.

CarMax: Best for unique perks

5.99%

24 to 72 months

$500-$100,000

None

Pros

  • Three-Day Payoff Program can provide peace of mind
  • 90-day/4,000-mile limited warranty on cars
  • Free car delivery, in some cases

Cons

  • CarMax Financing is only available at CarMax dealerships
  • High maximum APR (28.00%)
  • Not available in all states

What to know

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CarMax Financial auto loans can come with a lot of perks.

If you find a better offer within three days of your car purchase, you can back out of your CarMax Financial loan through the Three-Day Payoff Program. Plus, you could get your car delivered to your home for free if you live within 60 miles of a CarMax dealership.

As CarMax’s in-house financing arm, CarMax car loans are only available at CarMax dealerships. And since CarMax only sells used cars, a new car is off the table.

Read our full CarMax Auto Finance review.

How to qualify

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CarMax Financial doesn’t have a minimum credit score requirement. Although it doesn’t give concrete details, it reviews your credit history to check for on-time payments. It may also require a down payment.

Also, you won’t find CarMax in Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia and Wyoming.

Capital One: Best for preapproved car loans

(4,087)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

(4,087)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

6.49%

36 to 72 months

Starting at $4,000

Not specified

Pros

  • Offers both prequalification and preapproval
  • Auto Navigator benefits can make car shopping easier
  • Can manage loan online and via mobile app

Cons

  • Exact credit score requirements are unknown
  • No private-party auto loans
  • Can only be used at partner dealerships

What to know

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Internal LendingTree data shows you could still qualify with Capital One with a less-than-perfect score. You can get a preapproved car loan on Capital One’s website, but you can only use it at partner dealerships.

Capital One’s car shopping app, Auto Navigator, can also help you stick to your budget. The app will show you cars available at partner dealerships and customized estimated payments based on your prequalification offer.

Read our full Capital One auto loan review.

How to qualify

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Capital One doesn’t specify its borrower requirements, but the following vehicles are ineligible for financing:

  • Cars worth less than $4,000
  • Oldsmobiles, Daewoos, Saabs, Isuzus
  • Cars with branded titles
  • Cars that are older than 10 years and have more than 120,000 miles (in most cases)

Carvana: Best for online car shopping

(1,381)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

(1,381)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

6.85%

36 to 72 months

Starting at $5,000

None

Pros

  • Can buy or trade in a car completely online
  • Cars have a money-back guarantee for seven days
  • Does not require a minimum credit score

Cons

  • Only offers loans for cars bought through Carvana.com
  • Can’t see vehicle in person before buying
  • Not available in every state

What to know

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If you’re comfortable buying a car online, Carvana could be a solid choice for bad-credit car buyers. It doesn’t have a minimum credit score requirement. However, Carvana car loans only apply to cars sold on Carvana.com.

Online car buying can be quick and easy, but you can’t check out the car in person before buying (at least, not with Carvana). Also, Carvana has faced several lawsuits regarding tag and titling issues, which is something to consider.

Read our full Carvana Financing review.

How to qualify

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To qualify for Carvana financing, you must:

  • Be at least 18
  • Make at least $5,100 a year
  • Have no active bankruptcies

Westlake Financial: Buyers with bankruptcies or no credit

(7)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

(7)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

6.99%

48 to 72 months

Up to $50,000

None

Pros

  • Accepts past and current bankruptcies
  • No minimum credit score requirements
  • No minimum income requirements

Cons

  • High maximum APR (29.99%)
  • Only available through partner dealerships
  • Low maximum loan amount for bad-credit buyers ($50,000)
  • Loans could carry a minimum $349 fee

What to know

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Getting a car loan after bankruptcy can be tricky, but Westlake Financial could help. Bankruptcies won’t automatically exclude you. You might also qualify for a car loan with no credit.

Still, just because you qualify for a Westlake Financial car loan doesn’t mean it’ll be cheap. You could pay an annual percentage rate (APR) of up to 29.99%, as well as hundreds in fees.

Read our full Westlake Financial auto loan review.

How to qualify

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Westlake Financial has very few requirements. It states that it can approve those who have:

  • Open and past bankruptcies
  • Hard-to-prove incomes
  • No or low credit
  • Only been at their jobs or in their residences for a short period of time

Also, note that you can only get a Westlake Financial auto loan if you buy through a dealer in its network.

What to know about bad credit car loans

It’s not impossible to buy a car with a bad credit auto loan, but prepare for higher interest rates. There are no federal regulations that cap auto loan rates. Instead, individual states set their own limits.Even so, some states allow dealers to exceed interest rate caps as long as the dealer lets the state know in advance. In these cases, you could see rates in the triple digits.

Most lenders are on the up and up, but read the fine print before signing anything. Also consider using an auto loan calculator to understand the true cost of your loan, including interest.

 Beware of “buy here, pay here.” Many bad-credit borrowers turn to buy here, pay here car lots, but keep these as a last resort. These types of car lots offer in-house financing. In other words, the dealership itself provides the loan instead of a financial institution.

Buy here, pay here lots have loose eligibility requirements. Some won’t check your credit at all. They also tend to charge exorbitant rates that could land you in a cycle of debt.

Car loan rates by credit score

Your FICO score isn’t the only factor that lenders will look at to determine your rate. Still, it plays a major role.

Below you’ll find the average APR for used and new cars broken down by credit score. Your rate will vary, but this information can help you figure out if your offer is competitive for your credit band.

Credit scoreAverage new car APRAverage used car APR
300-50014.78%21.55%
501-60012.28%18.89%
601-6609.60%14.12%
661-7807.01%9.73%
781-8505.64%7.66%

Source: State of the Automotive Finance Market Q4 2023

How to get a car loan with bad credit

1. Check your credit score

Before shopping for any loan, you should check your credit score. Knowing where you stand can help you avoid wasting time pursuing lenders that you don’t qualify for. You also need to know your score to see if an offer is competitive.

Download LendingTree Spring and check your credit score for free. We’ll also show you the factors that go into your score and tips to help you improve it.

2. Get prequalified (and then preapproved) with several lenders

Getting prequalified with more than one lender is a must. Prequalification allows you to see how likely a lender is to approve you, and at what rate.

Using a loan marketplace like LendingTree can make this step easier. You can prequalify for multiple loans at one time and compare them side by side. Prequalification only requires a soft credit hit, so it won’t impact your score.

Once you’ve prequalified with a few lenders, the next step is to apply for preapproval. This process is like an in-depth version of prequalification. At this point, lenders will run a hard credit inquiry. If you get your rate shopping done within 14 days, only one hit will count against you.

3. Apply for your loan

After you’ve compared your preapprovals (more about that below), you can formally apply. Many lenders allow you to submit loan applications online. Others (such as Capital One) require you to bring your preapproval letter to a dealer to finalize it.

How to compare bad credit car loans

Whether this is your first auto loan or your fifth, deciphering loan offers isn’t exactly easy. Here are some definitions to help. Pay attention to the bolded content — it specifically applies to car loans for bad credit.

 APR

APR measures the cost of a loan, including interest and fees. When you’re researching loans, you might see APRs as a range. Or the lender might only advertise its starting APRs.

Since you need a car loan for bad credit, pay attention to the lender’s maximum APR (if it’s specified). The lowest APRs go to borrowers with the best credit, so they won’t apply here.

 Loan terms

Your loan term is the length of time you have to pay off your car. Car loan terms generally range between 12 and 84 months.

Some bad credit car loan lenders may try to entice you by offering an extra long loan term. Longer loan terms typically mean lower monthly payments. Choose the shortest loan term you can reasonably manage. The longer your loan term, the more overall interest you’ll likely pay.

 Loan amounts

Not all lenders offer large loan amounts to borrowers with bad credit. As a result, you may need to limit yourself to used cars. Also, use our car affordability calculator before going car shopping. This can help come up with a car budget you can handle.

 Fees

Car loans come with fees — some are mandatory and some are optional. You will need to pay a fee to transfer the cars’ title into your name, as well as a fee to register it. These fees are mandatory and are charged by your state. You’ll also pay sales taxes.

On the other hand, there are some dealer fees you can avoid. These could be extra charges for extended warranties or protection packages.

Dealerships also usually charge a documentation (doc) fee. This fee covers the cost of creating your sales contract. Some states regulate documentation fees. Others allow dealerships to charge whatever they want.

Some bad credit car loan dealers may charge higher documentation fees to make a car look cheaper than what it is. Then, when you go to finalize the loan, they’ll smack you with a high doc fee. Always ask for the out-the-door cost before getting your heart set on a ride.

 Lender reputation

Being without reliable transportation can make you desperate. How will you make it back and forth to work or get the kids to school? Shady lenders know this and might try to take advantage of the situation.

The Consumer Financial Protection Bureau (CFPB) keeps a public record of consumer complaints against lenders. If you’re considering a lender, search for it in the CFPB’s database. This, along with LendingTree lender reviews, can give you a good idea of the customer experience you might expect.

Insights from Jacob Channel, LendingTree senior economist

What can I do if I need a car loan with bad credit?

"Unfortunately, even if your credit is less than ideal, sometimes you just can’t put off buying a car.

While loans offered to those with weak credit are likely going to come with steeper rates, it can pay to shop around and compare offers from different lenders before you buy.

Different lenders can offer different rates to the same borrowers, so one lender may be willing to give a lower rate than another is."
What can I do if my rates are high?

"Remember that refinancing is an option.

Just because you’ve got bad credit now doesn’t mean it’ll stay bad forever. Once your score is higher, you may be able to refinance your bad-credit auto loan into something much more appealing."

Tips to improve your chances of being approved for a car loan

 Add a cosigner. You could have an easier time getting a car loan if you include a creditworthy cosigner. There are risks to having a cosigner on your car loan, though. If you make late payments, your cosigner’s credit will take a dive as well as yours.

 Make a large down payment. Zero-down bad-credit car loans exist, but making a large down payment could get you approved by a lender with better interest rates. Making a down payment takes some of the risk away from the lender, since you’ll lose your down payment if you default on your loan.

 Wait and improve your score. If you’re able, take time to improve your credit score before buying a car. It’s not an overnight fix, but boosting your score can help you avoid a car loan with an excessively high interest rate.

How we chose the best bad credit car loans

We reviewed 25 auto lenders to determine the overall best five bad credit car loan lenders. To make our list, lenders must offer auto loans to borrowers with credit scores 580 and below. From there, we prioritized the following factors:

  • Accessibility: We chose lenders with auto loans that are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification, preapproval and application processes.
  • Rates and terms: We prioritize lenders with competitive APRs, fewer fees and greater loan options for repayment terms and amounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that have self-service payment options (such as a mobile app), provide reliable customer service and offer unique perks.

Not all lenders we reviewed can be found on LendingTree’s loan marketplace, and your offers may or may not include lenders on this list. Our goal is to give you accurate, helpful information so you can find the best auto loan for your unique financial situation.

Frequently asked questions

It’s possible to qualify for a loan with a 500 credit score, but keep in mind the lender might have other requirements, too. You might also need to earn a certain amount of money every year or have been at your job for a specific length of time.
 
The best way to see if you qualify for an auto loan is to prequalify. It doesn’t require a hard credit hit, so prequalifying won’t negatively impact your credit.

The lowest credit score for a bad credit auto loan varies. Some lenders don’t require a particular credit score at all. Keep in mind, though, that the easier it is to get a loan, the more expensive that loan will probably be. Even if you have bad credit, shop around and compare offers to find the loan that’s best for you.

Generally, “buy here, pay here” car lots are the easiest places to get financing. That said, you might have other less-expensive options.
 
Buy here, pay here dealerships are often predatory. Instead, prequalify online with a few lenders to make sure that you truly have no other option. That, or skip financing altogether and pay cash for a cheap used car.