Getting a car loan with bad credit isn’t impossible, but it can feel that way when lenders keep turning you down or offering sky-high interest rates. The good news? Some lenders specialize in working with borrowers who have low credit scores, helping them get approved without outrageous fees or impossible down payment requirements.
The key is knowing where to look. Whether your credit took a hit from past financial struggles or you’re just starting to rebuild, the right lender can help you secure financing while keeping your payments manageable.
Below, we’ve rounded up the best bad credit auto loans for 2025, along with tips to improve your chances of getting the best deal possible.
7 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
- Minimum Credit Score: 400
- Loan Term: Up to 72 months
- Down Payment: As little as $0 or $500
- Income Requirement: At least $1,500 per month before taxes
2. CarsDirect
- Minimum Credit Score: None
- Loan Term: Up to 72 months
- Approval Time: Typically within 24 hours
- BBB Rating: A+
3. car.Loan
- Minimum Credit Score: None
- Loan Term: Up to 72 months
- Approval Time: Typically within 24 hours
- Loan Types: Lease, buy, or rent options available
4. myAutoLoan
- Minimum Credit Score: 575
- Loan Term: 24 to 84 months
- Approval Time: As fast as four minutes
- BBB Rating: A+
5. Capital One Auto Navigator
- Minimum Credit Score: 500+ (Prequalification available)
- Loan Term: 36 to 72 months
- Approval Time: Instant prequalification
- BBB Rating: A
6. Carvana
- Minimum Credit Score: None
- Loan Term: 12 to 72 months
- Approval Time: Instant prequalification
- Buying Process: 100% online
7. Autopay
- Minimum Credit Score: 560
- Loan Term: 24 to 96 months
- Approval Time: As fast as one business day
- Loan Types: New, used, refinance, lease buyout
How Bad Credit Affects Your Auto Loan
Bad credit doesn’t mean you can’t get an auto loan, but it does make the process more expensive. Lenders see a low credit score as a risk, which leads to higher interest rates, stricter loan terms, and sometimes a larger down payment requirement.
How Lenders Decide Loan Terms
While credit scores play a big role, lenders also look at:
- Income: A steady paycheck makes approval more likely.
- Debt-to-income ratio: If too much of your income goes toward debt, lenders may hesitate.
- Down payment: A higher down payment lowers the lender’s risk, which can improve your approval odds.
What to Expect with Bad Credit
- Higher interest rates: The lower your score, the more you’ll pay in interest.
- Lower borrowing limits: Lenders may cap how much you can finance.
- Shorter repayment terms: Some lenders require quicker payoffs, which raises monthly payments.
Why Some Lenders Still Approve Bad Credit Loans
Some lenders focus on income instead of credit scores. If you can show steady earnings and offer a down payment, you may still get approved, even if your credit isn’t great.
Auto Loan Interest Rates by Credit Score
Lenders set interest rates based on credit scores, with lower scores leading to higher rates. If you have a strong credit history, you’ll likely get better loan terms, while borrowers with lower scores may face steeper APRs and stricter repayment conditions.
Estimated Auto Loan Interest Rates
The table below shows the typical APRs for new and used car loans based on credit score tiers:
| Credit Score Range | Estimated APR (New Car) | Estimated APR (Used Car) |
|---|---|---|
| 720 and above (Excellent) | 5% – 7% | 6% – 9% |
| 700-719 (Good) | 8% – 10% | 9% – 12% |
| 600-699 (Fair) | 10% – 18% | 12% – 20% |
| 500-599 (Poor) | 19% – 25% | 21% – 29% |
| Below 500 (Very Poor) | 25%+ | 30%+ |
How Even Small Credit Score Improvements Can Save You Money
Even a small boost in your credit score can lead to significant savings on your auto loan. For example, moving from the fair credit range (600-699) to the good credit range (700-719) could lower your APR by several percentage points. That may not seem like much, but over the course of a five- or six-year loan, it can add up to thousands of dollars in interest savings.
Improving your credit before applying for a loan—by making on-time payments, reducing outstanding debt, and checking for errors on your credit report—can make a huge difference in your loan terms.
Why Subprime Borrowers Should Compare Multiple Lenders
If your credit score falls below 600, it’s especially important to shop around. Some lenders specialize in bad credit auto loans, while others may charge excessively high interest rates. Comparing multiple offers ensures you don’t overpay and helps you find the best possible terms.
Even if you need a loan immediately, taking a little extra time to compare rates and terms can help you avoid unnecessarily high monthly payments.
See also: 5 Bad Credit Auto Loans with No Down Payment
How to Choose the Best Bad Credit Auto Loan
Not all bad credit auto loans are the same. Some lenders offer fair terms, while others take advantage of borrowers with high fees and extreme interest rates. Before committing to a loan, it’s important to compare different factors to ensure you’re getting the best possible deal.
Approval Requirements
Every lender has different approval criteria. While traditional lenders focus heavily on credit scores, some lenders prioritize income, employment history, and down payment size instead. If your score is low, look for lenders that allow income-based approvals or consider options like a cosigner to improve your chances.
Interest Rates
The interest rate you receive will significantly impact the total cost of your loan. Even a small difference in APR can add up to thousands of dollars over the life of the loan. Always compare rates from multiple lenders before making a decision. If possible, work on improving your credit before applying to qualify for better rates.
Loan Amounts
Lenders may limit how much you can borrow based on your credit score and income. While it’s tempting to finance as much as possible, sticking to a reasonable budget can help keep your monthly payments affordable. Before deciding on a loan, use an auto loan calculator to estimate your monthly payment based on different loan amounts, interest rates, and terms. This will help you find a loan that fits within your budget.
Repayment Options
Loan terms can range from short 12-month loans to extended 96-month options. A longer auto loan term may lower your monthly payment, but it also means paying more in interest over time. Look for a lender that offers flexible repayment options and no prepayment penalties if you want to pay off your loan early.
Customer Service
A lender’s reputation matters. Reading customer reviews and checking Better Business Bureau (BBB) ratings can help you avoid companies that engage in predatory lending. Responsive customer service is important, especially if you ever need to adjust your payment plan or have questions about your loan.
Comparing these factors will help you find a lender that offers fair terms and manageable payments, even with bad credit.
Final Thoughts
Getting an auto loan with bad credit is possible, but it takes research and smart planning. Comparing lenders, interest rates, and repayment terms can help you avoid overpaying.
Improving your credit, saving for a down payment, and considering a cosigner can increase your chances of getting better loan terms. Once approved, making on-time payments can help rebuild your credit, and refinancing later may lower your interest rate.
The key is to choose a lender that offers fair terms and a loan that fits your budget. With the right approach, you can get the car you need while improving your financial future.
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.
