Best for prequalification

Capital One
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- Min. credit score:
- 300
- Fixed APR From:
- Not disclosed
- Loan amount:
- $5,000– $200,000
- Term lengths:
- 2 to 7 years
- Min. annual income:
- Not disclosed
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Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely borrowing money to purchase a car.
Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites.
Mark Kantrowitz is an expert on student financial aid, the FAFSA, scholarships, 529 plans, education tax benefits and student loans.
Feb 02, 2023
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 and how much the vehicle is worth compared to the loan amount. 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 payment history on previous auto loans, work history or education.
Choosing the right loan and best lender for you is based on which loan fits your budget and financial needs. 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. It is a good idea to gain at least three quotes before signing off on a loan. Give special attention to the following factors:
The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Bankrate does not endorse or recommend any companies.
The annual percentage rate (APR) includes your interest rate, plus any loan fees. It reflects the total cost of borrowing. | The period of time until your loan achieves maturity and is paid off in completion. Terms can be expressed in months or years, depending on the details of your loan. | The minimum credit score typically required to qualify for a loan with a given lender. Exact thresholds are not always disclosed by a lender and in certain cases the minimum score is the best estimate based on publicly available information. Credit score refers to FICO 9.0 unless otherwise stated. | |||
---|---|---|---|---|---|
4.0 Bankrate Score |
| Apply on partner site | Apply on partner site | ||
3.9 Bankrate Score | APR from 2.83- 36.00% | Term 60mo | Min credit score 300 | Apply on partner site | Apply on partner site |
4.2 Bankrate Score | APR from 2.99% | Term 48-60mo | Min credit score 300 | Apply on partner site | Apply on partner site |
3.5 Bankrate Score | APR from 5.24% | Term 60mo | Min credit score 300 | Apply on partner site | Apply on partner site |
3.9 Bankrate Score | APR from 2.14% | Term 48-60mo | Min credit score 300 | Apply on partner site | Apply on partner site |
APR from 5.04- 14.99% | Term 24-84mo | Min credit score 600 | |||
4.2 Bankrate Score | APR from 2.99% | Term 48-60mo | Min credit score 300 | Apply on partner site | Apply on partner site |
APR from 3.99- 24.99% | Term 60mo | Min credit score 300 | Apply on partner site | Apply on partner site | |
3.8 Bankrate Score | APR from 7.29- 11.54% | Term 36-72mo | Min credit score 300 | Apply on partner site | Apply on partner site |
3.9 Bankrate Score | APR from 6.49% | Term 36-72mo | Min credit score 300 | Apply on partner site | Apply on partner site |
4.1 Bankrate Score | APR from 5.61- 29.99% | Term 24-84mo | Min credit score 300 | Apply on partner site | Apply on partner site |
3.2 Bankrate Score | APR from 5.19% | Term 60mo | Min credit score 300 | Apply on partner site | Apply on partner site |
Lender | Starting APR | Term |
---|---|---|
CapitalOne | Not specified | 24 to 84 months |
Autopay | Starting at 2.99% | 36 to 60 months |
Carvana | Starting at 6.85% | 12 to 72 months |
iLending | Starting at 2.14% | 12 to 84 months |
Loan details presented here are current as of Jan. 4, 2023. 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.
Apply on partner site
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.
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Read our Bankrate review
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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 third 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 | 3.84% | 3.69% |
661 to 780 | 4.90% | 5.47% |
601 to 660 | 7.25% | 9.81% |
501 to 600 | 10.11% | 15.86% |
300 to 500 | 12.93% | 19.81% |
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.
If you are applying for a refinance loan with poor credit, keep the following constraints in mind.
The process of improving your credit takes quite a bit of time. But the stronger your credit is, the better rates and terms you will receive. Some ways to work towards increasing your credit score include:
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 2022, drivers with scores of 500 or lower received an average rate of 12.93 percent for new and 19.81 percent for used cars, according to the Experian State of the Automotive Finance Market report.
Fortunately, many lenders are moving away from using credit scores as the sole measure of ability to pay off loans. Instead, lenders are considering factors such as work or education history.
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.
When applying for an auto loan, lenders will require proof of income and employment, personal details — date of birth, Social Security number, address and phone number — proof of insurance and vehicle information. It is important to fill out the application completely and correctly to ensure you avoid denial due to errors on the application.
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: