Car Loans for Bad Credit

You might need to get a loan for auto-financing or refinancing your existing loan. Having bad credit isn’t a problem when you’re applying through WeLoans. Buckle up and take control of your finances with a bad credit car loan!

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Johnny HawkinsPersonal Finance Writer

Jul 27.2022. Filed under: Title Loans Hub

Is It Difficult to Get Car Loans with Bad Credit?

It might take some effort to get a car loan with bad credit, but it's not as difficult as you think. While some lenders still have a minimum credit score requirement above 580, many car loan lenders now offer bad credit auto loans for those with poor credit history.

These loans may ask for additional requirements like a cosigner and offer high interest rates, but you can get one upon fulfilling the eligibility mark and requirements.

Since a car loan is a type of secured loan where the lender can repossess the vehicle upon failure of repayments repeatedly, car loan lenders don’t have to face a huge risk, as is the case with unsecured loans. For this reason, especially with the increase in car loans for bad credit, you can get approved for one regardless of your credit score.

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What’s the Credit Score Needed for an Auto Loan?

There’s no fixed credit score required for car or title loans. You should have a good credit score since that increases your chances of getting a car loan approved with average interest rates, but it’s not a compulsory factor.

On the other hand, considering that car loan lenders need to evaluate your credit report before approving a loan, a lender might see a bad credit score as a red flag and reject your loan request. Some lenders even set a minimum credit score, above 580 in most cases, to apply for a car loan.

In most cases, you don’t need a minimum credit score to apply for a car loan, any credit score works. Plus, car loan lenders nowadays review a range of factors besides credit scores, including stable income, past debts, debt-to-income ratio, and financial handling.

Your credit score may not get your application auto-rejected from car loan lenders, especially those offering loans for bad credit. However, it does decide the interest rate, fee, and loan term that the lender will offer you. Generally, you can expect higher than average fees and interest rates with a credit score that’s on the bad side.

Top 5 Bad Credit Car Loans

Searching for car loans for bad credit but just can’t seem to find the right one? We’ve listed the leading bad credit car loan dealers to help you make the decision.

Car.Loan.com

Three minutes is all it takes to submit an application form through Car.Loan.com for prequalification. Connect to a large network of car dealers that don’t ask for an outstanding credit rating to get you the keys for your next car.

With the fast response time promised by this company, you can expect a call within 24 hours. Bankruptcy, bad credit, or even no credit at all isn’t an issue. With affordable payments, same-day approval, and no interest fee, this one stands out for sure!

WeLoans

Through WeLoans, you can connect with well-renowned bad credit car loan providers in the US by submitting a 3-minute application form.

WeLoans has a network of reputable lenders in the bad credit car loan industry. With a quick, convenient, and easy process, you can apply and receive offers from these lenders within minutes. The approvals come in fast, within 24-48 hours.

But a painless process isn’t the only benefit this online broker offers. You’re also empowered to compare offers from lenders all on one platform to select the best one!

LendingTree

With 22 years of experience under its belt, LendingTree is another company that has made a name on the list of best car loans for bad credit.

If you’re looking for several car loan offers in one place, the website connects you with a network of dealers, which enables you to compare fees, interest rates, loan terms, down payments, and much more without too much hassle.

Another gain is the quick processing time by their partnered lenders. Once you have made your choice and filled in the paperwork, you can even get the loan on the same day!

MyAutoloan.com

MyAutoLoan.com sets itself apart from other service providers by offering a range of services. They don’t limit themselves to car loans and refinance deals only, but have expanded towards lease buyouts as well.

After you’re approved by prequalification, you’ll receive offers from up to four auto dealers within minutes. Take your time to compare the offers, and once the deal is official, you can borrow within 24 hours!

Auto Credit Express

Bad credit isn’t a problem when you’re applying for auto financing through Auto Credit Express. With over $1 billion worth of bad credit loans successfully deposited, they’re the best in the field for a reason.

Their network of dealers specializes in bad credit and can help you get a card regardless of how bad your score is.

Auto Credit Express connects you with a local dealer after pre-qualification to finalize the deal and provides options for you to get a car you can drive off in.

How Does WeLoans Compare?

Why Use Us?
How much am I allowed to borrow?Up to $35,000No hidden fees or charges
What are typically the loan terms?Up to 36 monthsVarious repayment options
Do lenders check my credit?Yes Soft search only
Do lenders take bad credit?YesBad credit considered
Chances of approvalGoodQuick turnaround
How to apply?Apply onlineNo paperwork needed
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How to Get Approved for an Auto Loan with Bad Credit?

With bad credit, you can still apply for a car loan. The first thing you need to do is look for lenders that offer bad credit car loans. Now, to maximize your chances of approval, get the following things ready before applying for one:

Co-Signer

A co-signer is another person who is liable for repaying the loan and has their credit ratings impacted as well. Bad credit car loan lenders usually require a co-signer with a good credit score as additional security to ensure the repayments of the loan, which can also increase your chances of loan approval.

Pre-Qualify

Use the pre-qualify feature offered by most online lenders to check whether your current position can potentially get you accepted for the loan or not. It’s beneficial to know where you stand on the loan approval first, with no credit checks impacting your credit score.

Down Payment

Once again, it may not be a requirement by the lender, but paying some percentage of the total car loan as a down payment is favorable. This shows the lender that you’re serious about making the payments and also decreases your overall expense on the loan since the remaining amount to which interest rates are added is reduced.

Pay Off debts

Improving your credit score is a long-term process. However, if you’re thinking of applying for a car loan, paying off previous debts would improve your chances of getting one. Some lenders require applicants to have no existing loans under their name. Even if it’s not, it can somewhat balance your application against the low credit score.

Things to Consider When Getting Bad Credit Car Loans

Going with the first lender that offers you a car loan for bad credit isn’t a wise choice. Actually, a lot of lenders will promise one in today’s market. To judge one against the other to choose the one that fits your needs and avoid getting scammed, consider these factors when choosing between loan offers.

Interest rate

You can’t expect interest rates that are "too good to be true" when you’re applying for a bad credit car loan. A credit score on the low end should prepare you for higher interest rates.

However, some lenders try to get off with unbelievably high charges and rates by claiming that that’s what you get with bad credit. Steer clear of these lenders and compare the rates of multiple lenders before settling on one.

Documentations

You will need to submit certain documents to get a loan approved. The more complicated the documentation requirements, the longer it will take for the application process.

Try to go for a lender that clears you off with the simple documentation process instead of prolonging it, such as the companies mentioned above. But, don’t fall for one that doesn’t demand any documents either, it may be a scam.

Loan-to-Value ratio

A loan-to-value ratio is the amount of money you’re borrowing on the total value of the asset. For instance, a $100 payment on an asset that’s worth $1000 means that the LTV is 90%.

To choose a lender, compare bad credit auto loan lenders and shortlist the ones that offer flexible LTV, especially if you can’t pay large amounts in the beginning and are at risk of going bankrupt or overdrawing your account.

Loan Term

Does the lender offer a loan term that suits your needs and one in which you know you can easily repay the loan? If not, you should consider another one.

One lender may put the cap at 3 years, while another one may offer a loan term of up to 8 years. Think about it and select the one whose loan durations are well within your ease of repayment.

Customer Reviews

Last but not least, look over customer reviews in detail, they can tell you a lot about a lender’s operations and customer service. Lenders with too many negative reviews or not enough reviews at all are ones that you need to avoid. Another thing that’s integral is whether and how a company has responded to a reviewer’s complaint.

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Frequently Asked Questions

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

Of course, you can get a car loan with a bad credit score of 500. However, you need to be mindful that a credit score as low as 500 can increase the interest rates and fees offered by the lender significantly, compared to someone with a better credit score.

Which car company is best for bad credit?

There are several companies that offer auto bad credit loans, including Car.Loan.com,

WeLoans, LendingTree, to name a few. The "best" option depends on your preferences after you’ve considered the features of each company.

How do car loans impact my credit?

For starters, applying for a car loan will incur a hard credit check. If you’re approved for the loan, timely repayments can increase your credit score. On the other hand, delaying loan repayment can bring it down.

What do car dealers see in my credit report?

Car dealers consider various things when they evaluate a credit report, aside from just your credit score. They’ll be looking at your previous debts and repayments, existing debts, transactions, average available credit, etc., for an overview of your creditworthiness.

How much is a $10,000 car loan a month?

You’ll need to calculate this to get an accurate amount. Add the additional fees, loan amount, loan term, and APR, typically up to 36%, to an online loan calculator to get the monthly amount. The cost per month can be between 300-600 USD for a 3-year loan, depending on the above-given factors.

Get a Car Loan with Bad Credit Easily!

When WeLoans has your back, you can easily apply through our seamless application process to get bad credit car loans with a 99% approval rate through reputable lenders!

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