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Best bad credit auto loan rates for September 2022

As of September 27, 2022
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Bankrate’s best auto loans for borrowers with bad credit are selected based on interest rates, terms, transparency and — most importantly — flexible eligibility requirements. While a bad credit auto loan is technically no different from a normal loan, you can expect higher interest rates.   

To gain approval for an auto loan, lenders will assess how much of a risk it is to lend to you based on your credit history. That risk level goes into determining the interest rates and terms available to you. This means getting lender approval with poor credit history can be a challenge.  

But it is possible. Generally, bad credit falls below 580. Many lenders — including some selected as top bad credit lenders by Bankrate — are moving past the archaic approach of purely credit-based lending judgements and factor in aspects such as work history or education. 

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REFINANCE

REFINANCE

REFINANCE

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USED

USED

REFINANCE

REFINANCE

3.9

Bankrate Score
APR from

2.79%

Term

60mo

Min credit

680

Apply on partner site

3.5

Bankrate Score
APR from

7.49%

Term

60mo

Min credit

None

Apply on partner site

3.7

Bankrate Score
APR from

10.99%

Term

36-72mo

Min credit

Not disclosed

Apply on partner site

4.2

Bankrate Score
APR from

3.24%

Term

48-60mo

Min credit

Not disclosed

Apply on partner site

3.9

Bankrate Score
APR from

4.75%

Term

48-60mo

Min credit

None

Apply on partner site

3.2

Bankrate Score
APR from

5.19%

Term

60mo

Min credit

None

Apply on partner site

3.6

Bankrate Score
APR from

6.49%

Term

36-72mo

Min credit

None

Apply on partner site

4.1

Bankrate Score
APR from

2.20- 29.99%

Term

24-84mo

Min credit

Not disclosed

Apply on partner site

4.2

Bankrate Score
APR from

5.63%

Term

48-60mo

Min credit

None

Apply on partner site

4.0

Bankrate Score

  • Pre-qualify for an auto loan in minutes with no impact to your credit score
  • See your personalized rate and monthly payment while searching millions of cars
  • Adjust things like down payment, term length and more to build the deal that fits your finances best
  • Know your financing options before visiting the dealer

Apply on partner site
APR from

14.99%

Term

60mo

Min credit

Not disclosed

Apply on partner site
APR from

2.74- 14.99%

Term

24-84mo

Min credit

600

The Bankrate guide to choosing the best bad credit auto loans

Why trust Bankrate?

At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

What to know first

When shopping for an auto loan, compare APRs across multiple lenders to make sure you are getting a competitive rate. Look for lenders that keep fees to a minimum and offer repayment terms that fit your needs.  

Loan details presented here are current as of September 1, 2022. Check the lenders’ websites for more current information. The auto loan lenders listed here are selected based on factors such as APR, loan amounts, fees, transparency, credit requirements and more. 

Compare the best bad credit auto loan rates in September 2022

Lender Starting APR Term
CapitalOne Not specified 24 to 84 months
Autopay Starting at 1.99% 36 to 60 months
Carvana Starting at 3.9% 36 to 72 months
iLending Starting at 1.99% 12 to 84 months

Best bad credit auto lenders of September 2022

  • Best for prequalification: Capital One
  • Best for shopping multiple offers: Autopay
  • Best for fully online experience: Carvana
  • Best for bad credit refinance: iLending

Capital One: Best for prequalification

Overview: Capital one offers a fully online experience for new and used purchase loans and refinancing. With no credit requirement, drivers with bad credit can get competitive rates and have the comfort of prequalification.

Why Capital One is the best for prequalification: Applying for prequalification can give you the confidence of a loan offer without the hard credit pull. It provides you with your predicted rate and terms without any impact on your credit. 

Pros and cons: 

Pros

  • No hard credit check 
  • One-stop shop for your loan and vehicle
  • Prequalification lasts for 30 days  

Cons 

  • Limited vehicle inventory  
  • APR range is not disclosed before prequalifying

Who this lender is best for: Drivers who don't mind a limited selection of vehicles and want a large shopping window. 

Impact on financial wellness: A soft credit check is used for prequalification. You will undergo a hard credit pull once you fully apply.

Time to receive funds: Capital One borrowers can receive funding as soon as the same day they apply. 

Fees: Capital One charges a late fee for loan holders. 

Additional requirements: A loan through Capital One cannot be used at any auto dealership. Your vehicle will have to come from one of their 12,000 participating dealerships. 

Special features: Done fully online via the Auto Navigator. Once you prequalify current rates and expected monthly costs will be presented for available vehicles.

LENDER Capital One
MIN. CREDIT SCORE Not specified
STARTING APR Not specified
LOAN AMOUNT New and used car purchase: starting at $4,000 Refinance: $7,500 to $50,000
TERM LENGTHS 24 to 84 months
FEES Late fee

Autopay: Best for shopping multiple offers

Overview: Autopay is an online marketplace showcasing loans from banks, credit unions and other lending institutions. The convenience of comparing multiple offers helps get the best deal with bad credit.  
 
Why Autopay is the best for shopping multiple offers: The convenience of comparing multiple offers helps get the best deal with bad credit. Although the minimum credit score is not disclosed, the range of lender options fosters a wide range of availability. 
 
Pros and cons: 
 
Pros
 
  • Several lender options with one application
  • Simple application form to speed up the process   
  • Customer support six days a week  
Cons 
 
  • Maximum APR not disclosed  
  • Not usable for used vehicle purchases  
  • Possible down payment requirement
Who this lender is best for: A driver with poor credit shopping online for a new vehicle or refinancing.
 
Impact on financial wellness: Borrowers will have to undergo a hard credit pull — which will affect your credit score. 
 
Time to receive funds: Funding is available as soon as one business day following application approval. 
 
Fees: Potential fees vary depending on your matched lender. 
 
Additional requirements: Unfortunately, Autopay does not offer loans for used vehicles. So you will have to shop elsewhere if you're buying used.
 
Special features: Autopay also offers cash back refinancing and lease payoff refinancing options. 
LENDER Autopay
MIN. CREDIT SCORE Not specified
STARTING APR New car purchase: Starting at 1.99% Refinance: Starting at 1.99%
LOAN AMOUNT New car purchase: $2,500 to $100,000 Refinance: $2,500 to $100,000
TERM LENGTHS 36 to 60 months
FEES Varies by lender

Carvana: Best for fully online experience

Overview: Carvana is an online car buying and financing option, which allows drivers to purchase from its website. It does not have perfect credit requirements, and you can view loan options without a hard credit pull. 
 
Why Carvana is the best for a fully online experience: Although a loan with Carvana can only be achieved by purchasing from its online vehicle platform, Carvana offers loans with a low minimum annual income requirement of $4,000 — much lower than traditional lenders.
 
Pros and cons:
 
Pros
 
  • Prequalification available
  • No minimum credit requirement   
  • Money-back guarantee  
Cons 
 
  • Limited inventory
  • Down payment required
Who this lender is best for: A driver already shopping on the Carvana marketplace for a vehicle.
 
Impact on financial wellness: A hard credit check will happen following planned vehicle delivery. 
 
Time to receive funds: Funding is available as soon as the same day as approval. 
 
Fees: Carvana charges NSF and late fees. 
 
Additional requirements: Even with a low credit score you are eligible if you have an annual income of at least $4,000 and do not have any current bankruptcies. 
 
Special features: Vehicle and loan approval can all be done from the ease of your home and rates are current for 45 days.
LENDER Carvana
MIN. CREDIT SCORE Not specified
STARTING APR New and used car purchase: Starting at 3.9%
LOAN AMOUNT Not specified
TERM LENGTHS 36 to 72 months
FEES NSF and late fees

iLending: Best for bad credit refinance

Overview: Based on partnerships with banks and credit unions, iLending works to find an improved loan for your financial needs through its network.
 
Why iLending is the best for refinance: iLending boasts a low credit score requirement of 560 and its structure is built to foster directly to those who need a bad credit refinance loan.
 
Pros and cons:
 
Pros
 
  • Assistance from personal lending specialist
  • Quick application should only take a few minutes 
  • Wide range of terms available
Cons
 
  • No new or used purchase loans 
  • Fees are not clearly specified on its website
Who this lender is best for: A driver looking to refinance their current loan with direct assistance from a loan specialist.
 
Impact on financial wellness: Following the initial application a hard credit pull will be completed. 
 
Time to receive funds: Drivers can receive funds in as soon as one day.
 
Fees: iLending does not specify potential fees. 
 
Additional requirements: iLending holds specifications for acceptable vehicles for refinancing in terms of age and mileage. 
 
Special features: Drivers will be paired with a loan specialist to talk you through the refinance process. 
LENDER iLending
MIN. CREDIT SCORE 560
STARTING APR Starting at 1.99%
LOAN AMOUNT Not specified
TERM LENGTHS 12 to 84 months
FEES Not specified

What are bad credit auto loans and how do they work?

Auto loans are secured loans that use the car you are buying as collateral. A bad credit auto loan is essentially the same as a normal auto loan but usually with higher interest rates and more expansive acceptance criteria.  

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. 

Because when you finance a car it is often a secured loan they tend to come with lower interest rates than unsecured loan options, like personal loans. According to the automotive finance study for the second quarter of 2022 by Experian, the average loan rates by credit score are the following.

Credit score New car loans Used car loans
781 to 850 2.96% 3.68%
661 to 780 4.03% 5.53%
601 to 660 6.57% 10.33%
501 to 600 9.75% 16.85%
300 to 500 12.84% 20.43%

3 tips on how to secure an auto loan 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, try taking these steps:
  1. 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.
  2. Get a co-signer: A co-signer with good credit will take on some responsibility for your loan if you default, but they can also help you qualify.
  3. Reduce existing debt: Before applying for an auto loan, pay down as much debt as you can and avoid opening new accounts, like credit cards.

Types of lenders that offer bad credit loans  

There are many options when it comes to financing your vehicle with poor credit. It is wise to prequalify to more than just one lender to ensure you get the best deal for your circumstances. Along with this, consider the drawbacks and advantages that come with each lender type. 

Consider the following lender options when shopping for your next car.  

  • Online lenders: Shopping online allows you to compare and apply for many different lenders all at once. It is also likely that online lenders will offer loan preapproval, which allows you to see your potential rates before you commit to financing. If you prefer the fully online experience, consider a retail and finance combined approach — like Carvana or Vroom.  
  • Banks and credit unions: If you have a relationship with a bank or credit union, it is wise to start there. You will likely save money working with a bank that you have already created trust with. Typically, direct lenders offer assistance either at brick-and-mortar locations or online.  
  • Dealerships: The loans offered directly from the dealer come from a bank or credit union working with the lot. While these are not always the best rates available, it does offer the convenience of a one-stop shop. If the dealer route is right for you, come prepared with competing rates to negotiate the best deal. 

What to consider when refinancing your car with bad credit

If you are applying for a refinance loan with poor credit, keep the following constraints in mind. 

  • Vehicle mileage: The number of miles clocked on your vehicle's odometer greatly impacts the value of your car. Lenders' constraints can differ in tens of thousands of miles, so be sure to check for these types of restrictions.  
  • Age of vehicle: Many lenders will not refinance a vehicle that is over 10 years old due to the vehicle depreciation incurred over the life of the loan.  
  • Loan amount: Most lenders present minimum loan amounts for refinance loans. Depending on your financial state, factor in the entire cost you will need.   

FAQs about bad credit auto loans

Methodology

To select the top bad credit car loans, Bankrate considers 18 different factors. These factors include the loan amount, repayment options, acceptance criteria and dealership requirements. Each lender holds a score based on four categories. These categories include: 

  • Availability: This accounts for loan amounts, type, availability in each state, dealership requirements and range of repayment options.
  • Affordability: Primarily, this section covers expected APR, acceptance criteria, discounts for autopay and the number of fees. 
  • Customer experience: This category includes online access, support availability, shopping window, whether there's an option for automatic payments and app availability.
  • Transparency: Here prequalification and disclosure of rates and fees are accounted for.