What are bad credit auto loans?

Auto loans are secured loans that use the car you buy as collateral. A bad credit auto loan is essentially the same as a normal auto loan, but it is more accepting of bad credit in exchange for higher rates and fees. You are typically asked to pay a fixed interest rate and make monthly payments for 24 to 84 months, at which point your car will be paid off. Many dealerships offer their own financing, but you can also find auto loans at national banks, local credit unions and online lenders. While you are unlikely to qualify for the lowest auto loan rates, you should still take the time to apply for preapproval before you visit a dealership. This will help you get the most competitive offer from lenders that offer car loans for bad credit.

How do I improve my credit?

The process of improving your credit can take anywhere from months to years. But the stronger your credit is, the better rates and terms you will receive. Some ways to work towards increasing your credit score include: Keeping track of your credit score. Making payments on time. Paying down debt. Taking advantage of self-reporting. Only applying for loans you can truly afford. Not applying for too many different kinds of accounts at once.

Will having a cosigner increase my likelihood of approval?

Applying for a loan with a cosigner who has excellent credit will greatly increase your likelihood of gaining loan approval. The role of a cosigner serves as an extra layer of protection for the lender. The lender gains security because the cosigner is on the hook for payments if the primary borrower can't make them. Because of this, having a cosigner can earn you a decent rate and term, even if you don't have the best credit.

What is the lowest interest rate you can get a car loan with?

While this answer varies by specific lender, the better your score is, the better your rates and terms will be. If you have low or no credit, you may still qualify for a loan but should expect a steeper APR. In the third quarter of 2024, drivers with scores of 500 or lower received an average rate of 15.43 percent for new and 21.55 percent for used cars, according to Experian. However, these borrowers accounted for a small portion of approved loans.

What should I do if I get denied a car loan due to poor credit?

There are still ways to get behind the wheel following an initial denial. Firstly, it is important to take time to improve your credit. Do this by paying down any debt to lower your credit utilization rate. Otherwise, consider getting a co-signer for your auto loan or buying a car you can afford without financing, possibly from a private party.

Best bad credit auto loan rates for July 2025

Written by

Brittany Howard

Edited by

Kellye Guinan

Reviewed by

Emmanuel Nyame

Updated Jul. 07, 2025

What to know first: We selected the best auto loans for borrowers with bad credit based on interest rates, terms, transparency, and flexible eligibility requirements. While a bad credit auto loan is technically no different from a normal loan, you can expect higher interest rates.

How Bankrate works

NEW

Auto Credit Express: Best for low-income borrowers

3.6

Bankrate Review

APR from

Varies by lender

Loan term

2-6 yrs

Loan amount

$5k-$45K

Min credit score

Not disclosed

See rates

Apply on partner site

See details

NEW

myAutoLoan: Best for good credit borrowers

4.0

Bankrate Review

APR from

6.49%

Loan term

2-7 yrs

Loan amount

Starting at $8,000

Min credit score

600

See rates

Apply on partner site

See details

NEW

Tenet: Best for specialized EV loans

4.1

Bankrate Review

APR from

5.99- 16.20%

Loan term

3-7 yrs

Loan amount

$15k-$95K

Min credit score

Not disclosed

Read our review

Read review on Bankrate

See details

NEW

Best for initial comparison research for a new car loan

3.9

Bankrate Review

APR from

4.67%

Loan term

1-8 yrs

Loan amount

$8k-$150K

Min credit score

Not disclosed

See rates

Apply on partner site

See details

How Bankrate works

How Bankrate works

Compare rates

Our team researched the best good credit loan options available so you can compare lenders in one place.

Tell us the basics

Fill out a quick form to be matched with lenders that meet your needs. The details you provide are for prequalification purposes only and will not impact your credit score.

Get matched and receive funding

Choose a loan from a Bankrate partner and receive your funds if you qualify.

On This Page

Auto Credit Express: Best for low-income borrowers

3.6

Overview: Auto Credit Express connects buyers with local dealers or lenders specializing in bad credit lending, including for those who have filed for bankruptcy. It also boasts an A+ rating with the Better Business Bureau and a 4.6 rating on Trustpilot.

Read Bankrate's Expert Auto Credit Express Review

Fixed APR

Not disclosed

Loan amount

$5k– $45k

Min credit score

Not specified

Borrowers with bad credit.
Established in 1999

Online request form

New, used, and refi loans available

Over 4,500 partner dealerships
Cosigners allowed

Low minimum income requirement

Tenet: Best for specialized EV loans

4.1

Overview: Tenet specializes in financing electric vehicles (EVs), and you may be eligible if you have a fair credit score. Although most lenders will finance EVs, Tenet is one of the few that can walk you through the entire electric car-buying process, including charger installation.

Read Bankrate's Expert Tenet Review

Fixed APR

5.99%–16.20%

Loan amount

$15k– $95k

Min credit score

Not specified

Borrowers seeking refinancing plus other services, or refinancing multiple types of vehicles.
Established in 2006

Online application

Personalized loan consultant
Customer service 7 days a week

Ability to skip payments

Terms up to 96 months

Tresl: Best for initial comparison research for a new car loan

3.9

Overview: Tresl is an auto loan marketplace that allows you to quickly compare lenders and interest rates. The lenders in its network consider a wide range of credit scores, and you will have access to a dedicated financial advisor to walk you through the financing process.

Read Bankrate's Expert Tresl Review

Fixed APR

4.67%

Loan amount

$8k– $150k

Min credit score

Not specified

Borrowers who want to do everything auto-related in one app while working with a bank.
Established in 1994

Online application

Prequalification
No credit requirement

Fast funding

In-person offices

myAutoLoan: Best for fair credit borrowers

Overview: Serving as an aggregator, myAutoLoan makes it easy to compare potential auto loan refinance rates from multiple lenders. It only requires a minimum credit score of 600 and offers both auto loans and auto loan refinancing. Unlike many lenders, it provides private party car loans and loans for lease buyouts.

Read Bankrate's Expert myAutoLoan Review

Fixed APR

6.49%

Loan amount

Starting at $8,000

Min credit score

600

Shoppers who want flexibility in buying from dealerships, private parties or a lessor.
Established in 2003

Online application
Fast funding timeline

Daily rate updates

Calculate your potential savings

Bankrate's auto loan calculator can help you compare auto loan offers to find the best rate. Entering different rates and terms can help you find a balance between a low overall loan cost and an affordable monthly term.

- Loan amount: The amount you are borrowing. For bad credit auto loans, this is usually under $40,000 for new cars and $20,000 for used cars.
- Loan term: How long it will take to repay the loan, typically measured in months. Terms for auto loans usually range from 24 to 84 months.
- Loan interest rate: The amount per month you will pay to borrow money, expressed as a percent. Interest on bad credit auto loans will usually be in the double digits.
- Total loan amount paid: The principal amount that you are borrowing.
- Total cost of loan: How much you'll pay over the life of your loan, including interest.
- Total interest paid: The amount of interest you'll pay if you keep the loan for the full term.

How to choose the best bad credit auto loan

Choosing the right auto financing for bad credit isn't just about getting the most competitive rate. When shopping for an auto loan, compare the annual percentage rate (APR) each lender offers in addition to other factors like repayment options and approval requirements.

Every lender has its own criteria you must meet. This is especially true when it comes to bad credit loans. Pay careful attention to minimum credit score and income requirements to be sure you aren’t applying for a loan outside your range.
The interest rate you receive will be based on your credit score and current finances. Any upfront fees you need to pay will be factored into your APR, which represents the annual cost of interest and fees for your auto loan. The best auto loans for bad credit will have an average APR of around 15 percent for new cars and 22 percent for used cars.
Carefully determine how much vehicle you can afford. Be honest about your budget and use an online calculator before applying.
Auto loan terms typically range from 24 to 84 months. The longer your term, the more interest you will pay. But a longer loan will also yield a lower monthly payment. Keep this in mind when deciding the length of your loan.
Consider a lender's customer service, such as online availability, face-to-face communication and hours of operation.

What are the current auto refinance rates?

Auto loan rates vary by lender, but the better your score is, the better your rates and terms will be. If you have low or no credit, you may still qualify for a loan but should expect a higher average auto loan rate.

In the first quarter of 2025, drivers with scores of 500 or lower received an average rate of 15.81 percent for new cars and 21.58 percent for used cars, according to Experian. However, these borrowers accounted for a small portion of approved loans. Those with scores between 500 and 600 fared better, with rates of 13.22 percent and 18.99 percent for new and used cars, respectively.

Credit score	New cars	Used cars
781 to 850 (super prime)	5.18%	6.82%
661 to 780 (prime)	6.70%	9.06%
601 to 660 (nonprime)	9.83%	13.74%
501 to 600 (subprime)	13.22%	18.99%
300 to 500 (deep subprime)	15.81%	21.58%

^{Source: Experian State of the Automotive Finance Report, Q1 2025}

Pros and cons of car loans for bad credit

Securing vehicle financing aimed at poor credit borrowers can be an excellent way to get a car, but it comes with risks. Consider the benefits and drawbacks of a bad credit auto loan.

Pros

On-time payments can improve your credit score.
More options for shoppers who might not have access otherwise.
Less stringent credit requirements.

Cons

Potentially high interest rates.
Higher monthly cost.
Likelihood of additional fees.

BANKRATE EXPERT FAQ

Can taking out an auto loan help build your credit?

Beverly Harzog

Nationally recognized finance expert

There will likely be a small decrease in your score when you apply for loans due to credit checks. Once you start making payments, your score will bounce back. If you make all of your payments on time, it will help you build a good credit score. But also keep in mind that if you don’t make timely payments, your missed car loan payments could damage your score. Set up reminders or [automatic] payments to make sure your new car loan is an opportunity to build a healthy credit score.

How to apply for car loans with bad credit

It is possible to get a car loan with bad credit, although having bad credit will raise the rates you're offered. If you are having trouble getting approved or finding acceptable rates, follow these steps:

Check your credit score: At least 30 days before you plan on applying, check your credit report and your credit score. Dispute any inaccurate information to get it removed and boost your score.
Reduce existing debt: Before applying for an auto loan, pay down as much debt as you can and avoid opening new accounts. Get up-to-date on any delinquent accounts.
Get a cosigner: A cosigner with good credit can also help you qualify for the loan and potentially for a lower rate by reducing your lender's risk.
Make a large down payment: A larger down payment will lower your monthly payment, and it could also help you qualify for better rates because it reduces the amount you have to finance.
Apply for preapproval: Auto loan preapproval allows you to visit a dealership like a cash buyer. You can start your search on Bankrate to see what rates you could qualify for.

Avoid buy here, pay here dealerships

Use buy here, pay here car lots as a last resort. While you can expect higher rates with any subprime car loan, the cost of financing through these dealerships can put a strain on your budget.

What to consider when refinancing your car with bad credit

If you are applying to refinance a loan with poor credit, the amount you borrow and your vehicle's mileage and age will affect your loan.

Vehicle mileage: Lenders will only refinance vehicles between 80,000 miles and 120,000 miles, though most will only accept vehicles with less than 100,000 miles.
Age of vehicle: Many lenders will not refinance a vehicle over 10 years old, but there may be exceptions for antique or collector vehicles.
Loan amount: You will be required to have a minimum amount left on your loan, but the exact balance depends on your lender.

FAQs about bad credit auto loans

Auto loans are secured loans that use the car you buy as collateral. A bad credit auto loan is essentially the same as a normal auto loan, but it is more accepting of bad credit in exchange for higher rates and fees.

You are typically asked to pay a fixed interest rate and make monthly payments for 24 to 84 months, at which point your car will be paid off. Many dealerships offer their own financing, but you can also find auto loans at national banks, local credit unions and online lenders.

While you are unlikely to qualify for the lowest auto loan rates, you should still take the time to apply for preapproval before you visit a dealership. This will help you get the most competitive offer from lenders that offer car loans for bad credit.
The process of improving your credit can take anywhere from months to years. But the stronger your credit is, the better rates and terms you will receive. Some ways to work towards increasing your credit score include:
- Keeping track of your credit score.
- Making payments on time.
- Paying down debt.
- Taking advantage of self-reporting.
- Only applying for loans you can truly afford.
- Not applying for too many different kinds of accounts at once.
Applying for a loan with a cosigner who has excellent credit will greatly increase your likelihood of gaining loan approval. The role of a cosigner serves as an extra layer of protection for the lender. The lender gains security because the cosigner is on the hook for payments if the primary borrower can't make them. Because of this, having a cosigner can earn you a decent rate and term, even if you don't have the best credit.
While this answer varies by specific lender, the better your score is, the better your rates and terms will be. If you have low or no credit, you may still qualify for a loan but should expect a steeper APR.

In the third quarter of 2024, drivers with scores of 500 or lower received an average rate of 15.43 percent for new and 21.55 percent for used cars, according to Experian. However, these borrowers accounted for a small portion of approved loans.
There are still ways to get behind the wheel following an initial denial. Firstly, it is important to take time to improve your credit. Do this by paying down any debt to lower your credit utilization rate. Otherwise, consider getting a co-signer for your auto loan or buying a car you can afford without financing, possibly from a private party.

Learn more about bad credit auto loans

What to do if you were denied for an auto loan

You may feel discouraged if your application was denied, but finding out why can help you start building a path to approval.

Second-chance car loans: What they are and how to get one

A second-chance car loan is one way to buy a car with bad credit, but there are other options that are safer and more affordable.

How to build credit to buy a car: 4 tips

Building credit can take time, but it will increase your chance of approval and qualify you for a better rate on your loan.

How to lease a car with bad credit

Leasing a car with no credit or bad credit can be challenging, but it is possible with these steps.

Methodology

Bankrate's trusted auto loans industry expertise

Read our full methodology

years in business

lenders reviewed

loan features weighed

520

data points collected

The Bankrate team evaluated over two dozen lenders to select our top picks for the best auto loans. Our 20-point system judged how lenders perform across four main categories.

Loan amounts, repayment options, dealership requirements and state availability all contribute to this category. Lenders that serve customers nationwide with flexible loan amounts rank higher.
This section houses annual percentage rate ranges, acceptance criteria, fees and discounts. Lenders with the lowest rates, fewest fees and most generous acceptance criteria receive higher scores.
Our team looked at how easy it is for customers to apply for and manage their loans. Criteria include how long you have to shop after approval and customer service hours, alongside other quality-of-service factors.
This includes prequalification and public disclosure of rates and fees. We favored lenders that make it easy for customers to preview possible costs.

Bankrate's trusted auto loans industry expertise

Read our full methodology

years in business

lenders reviewed

loan features weighed

352

data points collected

The Bankrate team evaluated over a dozen lenders to select our top picks for the best auto refi loans. To do this, Bankrate uses a 16-point system to evaluate auto loan refinance products across four main categories.

- Loan amounts, restrictions and state availability are accounted for in this category. Lenders with fewer restrictions, larger loan amounts and those that serve customers nationwide rank higher.
Lenders with the lowest APRs and fewest fees rank better in this category. Discounts can also add to the score.
Our team evaluates lenders' online account access, customer service hours, automatic payments options and funding timeline.
Prequalification and the public disclosure of rates and fees contribute to this score. Lenders that make it easy for borrowers to find how much they could pay to refinance get higher marks.

Best bad credit auto loan rates for July 2025

Filter results

Auto Credit Express: Best for low-income borrowers

See details

Pros

Cons

myAutoLoan: Best for good credit borrowers

See details

Pros

Cons

Tenet: Best for specialized EV loans

See details

Pros

Cons

Best for initial comparison research for a new car loan

See details

Pros

Cons

How Bankrate works

How Bankrate works

Compare rates

Tell us the basics

Get matched and receive funding

Auto Credit Express: Best for low-income borrowers

Auto Credit Express: Best for low-income borrowers

Who it's for

Stand-out features

Tenet: Best for specialized EV loans

Tenet: Best for specialized EV loans

Who it's for

Stand-out features

Tresl: Best for initial comparison research for a new car loan

Tresl: Best for initial comparison research for a new car loan

Who it's for

Stand-out features

myAutoLoan: Best for fair credit borrowers

myAutoLoan: Best for fair credit borrowers

Who it's for

Stand-out features

Calculate your potential savings

How the loan calculator works

What the estimated monthly payment box tells you

How to choose the best bad credit auto loan

Approval requirements

Interest rates

Loan amounts

Repayment options

Customer service

What are the current auto refinance rates?

Pros and cons of car loans for bad credit

Pros

Cons

Can taking out an auto loan help build your credit?

How to apply for car loans with bad credit

Avoid buy here, pay here dealerships

What to consider when refinancing your car with bad credit

FAQs about bad credit auto loans

What are bad credit auto loans?

How do I improve my credit?

Will having a cosigner increase my likelihood of approval?

What is the lowest interest rate you can get a car loan with?

What should I do if I get denied a car loan due to poor credit?

Learn more about bad credit auto loans

Methodology

Bankrate's trusted auto loans industry expertise

Availability

Affordability

Customer experience

Transparency