Auto Loans For Bad Credit: Top Lenders & Rates (2022)

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It's not always easy to find auto loans for bad credit borrowers. But while it may be hard to secure an auto loan with poor credit, it’s not always impossible. Many auto lenders specialize in providing loans for people with lower credit scores.

In this review, we’ll list several auto loan providers that offer loans for drivers with bad credit scores, no credit, and bankruptcies. We’ll also provide tips on how to apply for a loan when you have bad credit and how to improve your credit score. While the best auto loan rates aren't available to those with poor credit, a low credit score doesn’t necessarily mean a reasonable car loan is impossible to find. 


In this article:

17 Auto Loans For Bad Credit

The list below names 17 reputable bad credit car loan providers that offer loans to drivers with bankruptcies and/or poor FICO credit scores. Several of the companies listed below even specialize in bad credit auto financing. Which lender will work best for you depends on your specific circumstances, but this list is a good place to begin your search.

Best Auto Loans For Bad Credit Providers

Auto Loan Provider

Minimum Credit Score Required

Minimum Annual Income Required

Clearlane 580 $24,000 Auto Approve 580 $18,000 myAutoloan 575 $21,600 RateGenius 550 $24,000 Tresl 500 $18,000 Prestige Financial No minimum credit $27,000 RoadLoans No minimum credit $21,600 Vroom No minimum credit $18,000 Auto Credit Express No minimum credit $18,000 Capital One No minimum credit $18,000 Carvana No minimum credit $10,000 New Roads No minimum credit Not specified Credit Acceptance Corp No minimum credit Not specified Drivetime No minimum credit Not specified Carmax No minimum credit Not specified CarZing No minimum credit Not specified Byrider No minimum credit Not specified

Best Subprime Auto Lenders

Below are our picks for the best subprime auto lenders. Getting an auto loan for bad credit is difficult, but these providers have shown a great track record with customers who have bad credit. We'll go into more detail about their history, their car financing options, and highlights related to their services.

#1 Auto Credit Express: Best For Bad Credit Financing

Loan amount: Varies by lender
Best for: A range of buyers with good, fair, or bad credit
Car financing types: Purchase loans, refinancing loans, bad credit lease options

Auto Credit Express is a bit different from most other lenders on our list. That's because it isn't technically a lender. It works with hundreds of lenders and dealers across the country to connect buyers with opportunities that work for them.

Auto Credit Express can help subprime buyers find loans that have low down payment requirements, which makes it a bit easier to get loan approval on a new vehicle. Lenders in their network can also work with people who have had a bankruptcy. 

#2 Carvana: Best Car Buying Process

Loan amount: $1,000 to $85,000
Best for: Car buying process
Car financing types: Purchase loans for Carvana vehicles only

If you've found a vehicle you love through Carvana, you can complete the loan application and financing process at the same place. Carvana doesn't specify a minimum credit score, but it does require you to make at least $10,000 per year. Be aware that Carvana doesn't allow co-signers on its loans. 

Another thing that makes Carvana a good option is that you can get a prequalification offer without hurting your credit. Carvana's prequalification is good for 45 days, which gives you a good amount of time to shop around. 

#3 Capital One Auto Refinance: Easiest Loan Prequalification

Loan amount: $7,500 to $50,000
Best for: Refinance and prequalification
Car financing types: New and used purchase loans, refinancing loans

If you want a large bank experience, we recommend checking out Capital One Auto Refinance. Capital One offers prequalification for both purchase loans and refinancing loans. 

Capital One 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. If you are prequalified, you can get a loan at one of Capital One's 12,000 participating dealerships. 

Where To Get Auto Loans For Bad Credit

You can find auto loans for bad credit from a variety of legitimate lenders on the market today. Some of these lenders have minimum credit score requirements, while others do not. However, you will need to show some form of regular income. Most bad credit auto loans require you to make at least $18,000 per year. 

People with bad credit may have a harder time finding auto loans than people with good credit, but there are still plenty of options. Here are the main types of lenders for bad credit auto loans:

  • Traditional banks: Some banks offer auto financing to people with lower credit scores. If you have a bank you already like working with, you may want to check their loan requirements first.
  • Credit unions: Your local credit union and even some national ones may be more willing to work with bad credit borrowers than commercial banks. Credit unions typically have low rates and fewer fees compared to other lenders. However, they do also usually require membership.
  • Online lenders: Online-only lenders have jumped in popularity in recent years, allowing you to go through the loan process from your phone or computer. Some of these lenders specialize in bad credit auto loans.
  • Brand dealerships: Car dealers for larger auto brands may be able to find financing options for poor credit borrowers on new and used cars.
  • Buy here pay here (BHPH) dealerships: Independent dealerships that offer their own financing options may be able to help borrowers with poor credit get approved for a used car loan. Loans from these dealers, however, typically come with very high interest rates.

Be prepared to face higher interest rates if you have poor credit. However, you can reduce the amount of interest you will pay on a bad credit auto loan if you make a bigger down payment or choose a shorter loan payoff period.

Bad Credit Auto Loan Interest Rates

Having a low credit score will make the loan more expensive in the long run. How much more depends on the interest rate. According to Experian's State of the Automotive Finance Market report, the average interest rate for borrowers with very poor credit was 14.76 percent for new cars and 20.99 percent for used cars in 2022. These borrowers have credit scores between 300 and 500.

Average Auto Loan Rates By Credit Score

The table below shows the average auto loan rates by credit score for new and used car purchases, according to the 2022 Q1 Experian State of the Auto Finance Market report.

Credit Score Average New Vehicle Loan Rate Average Used Vehicle Loan Rate 781 to 850 2.40% 3.71 % 661 to 780 3.56% 5.58% 601 to 660 6.70% 10.48% 501 to 600 10.87% 17.29% 300 to 500 14.76% 20.99%



Bad Credit Auto Loan Rate And Payment Comparison

If you borrow $15,000 and pay an interest rate of 14.76 percent on a 60-month bad credit car loan, you'd end up paying $21,298 in total. That means you paid $6,298 in interest, which is over a third of the value of the loan. 

  • Borrow: $15,000
  • Interest rate: 14.76%
  • Total paid over 60 months: $21,298

If you were able to improve your score above 500, you might find rates around 10.87 percent. Those few points make a big difference, and you'd pay almost $2,000 less when all is said and done.

  • Borrow: $15,000
  • Interest rate: 10.87%
  • Total paid over 60 months: $19,510

As you can see, your credit score is a major factor in the rates you get on auto financing and other loans. People with good credit scores can typically find loans with nearly any financial institution at reasonable rates, but people with a credit score under 600 may have more difficulty.

How To Get Cheaper Auto Loan Rates With Bad Credit

Your credit score is the most important factor in the auto loan rates you get. And while it takes time to improve your credit score, there are some things you can do to try and get a lower rate with the score you have now.

Consider Buying A New Car Instead Of A Used Car

As you can see from the table above, auto loan interest rates increase steeply for borrowers with credit scores of 660 and below. You will also notice that interest rates for new car purchases tend to be lower than those for used car purchases. However, if money is tight, you may still save more by purchasing a used car, though you will pay a higher interest rate.

Put More Money Down

The loan-to-value (LTV) ratio on your auto loan compares the amount of money you borrow to the value of the vehicle you purchase. Increasing your down payment or adding cash to your trade-in value decreases your LTV ratio. A lower LTV ratio can sometimes get you a lower interest rate. 

Get A Shorter Loan Term

A shorter loan term will result in higher monthly payments, but it may also get you a lower interest rate and reduce the overall loan cost. The more quickly you pay off your auto loan, the less interest you will ultimately accumulate. However, some lenders charge a prepayment penalty, so make sure you understand the fine print of your auto loan before paying it off early.

Get A Co-signer

The easiest way to get a lower interest rate if you have a poor credit score is to add a co-signer with good credit to your loan. A co-signer is someone who accepts responsibility for the loan with the signer and will be on the hook with collections if you miss any payments.

How To Apply For Auto Loans With Bad Credit

Applying for an auto loan with bad credit isn't much different from any other credit situation. The main differences are that you'll typically have fewer options and higher rates. There are just a few steps to the application process.

Prepare The Documents Needed To Apply For A Car Loan

When you apply for a bad credit auto loan, you will likely need to supply potential lenders with some information about you and the vehicle you wish to purchase. This includes:

  • Personal details like your name, address, age, and Social Security number

  • Contact information such as your email address and phone number

  • Gross annual income information

  • Vehicle information like model, age, mileage, and vehicle identification number (VIN)

Before you finalize your auto loan, you may also be required to supply copies of the following documents:

  • Driver’s license

  • Recent pay stubs

  • Personal references

Auto Loans For Bad Credit Tips

Some lenders do offer auto loans for bad credit. While they typically come with higher interest rates and other downsides, some are better than others. Knowing what to look for and where to look can help you avoid additional financial hardship.

Compare Lenders That Offer Bad Credit Auto Loans 

Applying for auto financing used to take place primarily in banks or at car dealerships. Today, most companies have online applications, making it easy to request and compare several auto loans at a time.

You can also use a service like, which lets you see personalized loan offers from multiple lenders at once. However, it’s still a good idea to apply for an auto loan at your local bank or credit union in addition to searching online.

Avoid A Hard Credit Check Until You Need One

Look for companies that offer a preapproval process that does not require a hard credit check. What this means is that you will self-report your FICO score and income information to the lender. You will then be made a provisional auto loan offer. This is not an official offer, and your terms may not be finalized until after a hard credit check.

Do not submit to a hard credit check unless you are fairly confident you will accept the loan offer. You want to limit any negative impact to your credit score while you are still considering your options.

Know The Difference Between Interest Rates And APR 

You may see online lenders and others use the terms “interest rate” and “APR” in similar ways. But it’s important to understand the difference.

Interest rate refers to only the rate of interest that a lender charges on a loan. APR, on the other hand, includes taxes, fees, and other costs that are rolled into your loan in addition to the interest rate. Make sure you are comparing the same figures when you compare loan offers from multiple lenders.

Work To Improve Your Credit Score

A good credit score is vital to saving money and has benefits beyond a low interest rate on your auto loan. In several states, your credit history may also be used to determine your auto insurance premium. If you have bad credit, you should work to improve it as soon as possible. However, raising your credit score cannot be accomplished overnight.

Some ways to improve your credit score include:

  • Open a credit card: Don’t let your credit balance get too high, and pay off your bill in full each month. This shows lenders that you are dependable and can be trusted to make your loan payments.
  • Increase your credit limits: The amount of credit you’re using affects your score. For example, if you had a credit card with a limit of $1,000 and had a balance of $500, you’d be using 50 percent of your credit. However, if you asked your bank to increase your limit to $2,000, you’d only be using 25 percent of your credit. This can raise your score.
  • Consolidate debt: Try to consolidate your debts into one place with the lowest interest rates possible.
  • Diversify your credit: Your credit mix is an important component of your score, and having just one type of credit, such as credit cards, can bring it down. Taking on a personal loan can diversify your credit and may improve your score.
  • Pay down existing debt: This will save you money in the long run and help your credit score.
  • Wait: Certain negative factors will fall off your report after a number of years. Late payments, collections, and bankruptcies are removed from your report after seven years.
  • Monitor your credit: Many of the major credit bureaus, such as Experian, Transunion, and Equifax, offer credit monitoring and tools for improving your credit. Take advantage of these programs.
  • Check your report: Request a copy of your credit report and look for errors or outstanding debts you may have forgotten about.

If you initially take out a bad credit auto loan but later improve your credit score, be sure to consider auto loan refinancing. This involves taking a new loan with better interest rates to pay off the existing loan. You may want to refinance your auto loan after your credit score increases above 660.

Bad Credit Auto Loans: Conclusion

At the end of the day, there are a variety of lenders that work with car buyers who have bad credit. That's why it's a good idea to work with a comparison service or get multiple prequalification offers to see what's available to you.


Below are some frequently asked questions about auto loans with bad credit.

Auto Loans For Bad Credit: FAQ

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

Yes, you can get a car loan if your credit score is 500. According to Experian, over 17 percent of auto loans in 2021 were issued to borrowers with scores below 500.

Can I buy a car with a credit score of 450?

Ultimately, yes, you can find a car with a credit score of 450. You'll need to work with a lender that doesn't have a minimum credit score requirement. Be aware that borrowers at this level pay high interest rates of 14 percent or more.

Can you get a car loan with a credit score of 300?

If you have a credit score of 300, some lenders will work with you if you can also show that you have a steady income. You will pay high interest rates with this type of credit score. Another option is to find a cosigner to lower your interest rate. 

What happens if you can't make your auto loan payments?

Several things can happen if you miss one or more payments on an auto loan. Your credit score will most likely take a hit. You may get charged a penalty or see your interest rate go up. Depending on the lender, you may also risk repossession. 

Is CreditKarma accurate?

CreditKarma and other credit monitoring services should provide accurate information about your credit score and history. Sometimes, delays in reporting from credit accounts could mean that information on these services is not completely up to date.

Disclaimer: Our research team aims to keep this information accurate and up to date, but you'll get the most recent information from financial institutions. Rates and terms vary according to applicant and market conditions. We do not offer warranties for any loan products or services discussed on the site, and we recommend you read through a financial institution’s terms and conditions carefully when making a decision on a loan product.