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Getting approved for an auto loan if your credit is in rough shape can be difficult with many lenders. However, you still have options even with bad credit, whether you want to purchase a vehicle, refinance an existing loan, or buy out a lease.
We've rounded up a list of top lenders offering auto loans to borrowers with bad credit.
Best Auto Loans for Bad Credit of 2023
Capital One Auto Loan - Product Name Only Auto Loan - Product Name Only Carvana Auto Loan - Product Name Only Autopay - Product Name Only Openroad Lending - Product Name Only
We've gathered the best lenders for people with a range of credit scores, with a specific focus on finding companies that offer low APRs.
Compare the Best Auto Loans for Bad Credit 2023
Our Experts for the Best Auto Loans for Bad Credit
We consulted auto loan and financial for insights into finding the best auto loans for borrowers with bad credit.
- Geoff Cudd, Owner of FindTheBestCarPrice.com
- Kareem Saleh, founder and CEO of FairPlay AI
- Ryan Wangman, loans reporter at Personal Finance Insider
How to Choose the Best Auto Loan for Bad Credit
To pick the best auto loan, take stock of the factors that are most important to you. Many borrowers zero in the lowest interest rate, but also look at any fees, the minimum credit score needed, and the accessibility of the lender's customer service.
Also look at the different types of lenders you may borrow with. Some people may feel comfortable with an online lender, while others may prefer a credit union or bank. You'll also want to make sure you're able to select a term length that works for you and that your loan's purpose is allowed by the lender you choose.
Guides like this one will help you compare multiple lenders in the same place to weigh their pros and cons. Keep in mind that you should also read individual reviews of any lenders you're considering.
Methodology
We rate all auto loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths and loan amounts (15% of rating)
- Borrower accessibility (15% of rating)
- Variety of loans (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
Each category's weighting is based on its importance to your borrowing experience. Rates and fees have the most direct impact on the overall cost of your loan, so we weigh those the most heavily. Customer support and ethics are still very important parts of the borrowing experience, but do not directly tie to a personal loan's terms, so they have less of an impact on the overall rating.
See our full ratings methodology for auto loans »
Auto Loans for Bad Credit Frequently Asked Questions
Can I get auto financing with a 500 credit score?
Yes, although not all lenders will offer loans to borrowers with a score that low. Even if you do qualify for financing, you may receive a high rate or hefty fees.
Who is the easiest car company to get financing from?
The easiest company to get financing from depends on your individual financial situation. The only way you'll know if you'll receive a loan is to apply.
What credit score is too low for a car loan?
There's no defined minimum credit score that won't qualify for a loan, but generally speaking, the lower your score, the less likely you are to qualify.
Is it better to finance a car through a bank or through the dealer?
Your rates and terms will vary with different lenders, so check your options before signing on the dotted line.
MyAutoloan
Why myAutoloan stands out: Fast funding. You'll likely to get your money within 24 hours after your loan is approved, faster than some other lenders.
Look out for: Loan approval requirements depend on the dealer you're paired with. Because myAutoloan isn't a direct lender, it doesn't disclose all the eligibility requirements you need to meet to get a loan. Instead, you'll find out what you need from its network of partner dealers.
Capital One
Why Capital One stands out: Low minimum loan amount. Capital One has a minimum loan amount of $4,000, with an undisclosed maximum. The lender also has competitive low rates — though those are usually reserved for borrowers with excellent credit.
Look out for: Full information on fees and interest rate range not disclosed until you apply. This can make it hard to totally anticipate the final cost of your loan.
Read Insider's full review review of Capital One Auto Loans.
Carvana
Why Carvana stands out: Seven-day money back guarantee. If you figure out that you don't like the car during the first seven days you have it, contact Carvana. You will be refunded the price you paid for the vehicle, excluding any shipping or delivery charges. You are allowed to drive the car up to 400 miles and can return it for any reason.
Look out for: Only used car financing available. If you want to get a new car, refinance a loan, or buy out a lease, you're out of luck. Carvana only offers financing for the used cars it has in its online inventory.
Read Insider's full review review of Carvana Auto Loans.
Autopay
Why Autopay stands out: Competitive rates. While borrowers with bad credit probably won't qualify for Autopay's minimum rates, they still may qualify for a better rate than with a different lender, as the rates start lower.
Look out for: No used car purchases available. Borrowers who want to shop on the secondhand market for a car — which may be a good idea for borrowers with bad credit scores — won't be able to do so with Autopay.
OpenRoad Lending
Why OpenRoad Lending stands out: Accessible to borrowers with extremely low credit scores. OpenRoad's minimum credit score is only 460, the lowest that we found disclosed.
Look out for: Only auto refinancing available. If you're looking for a new or used car, or to buy out your lease, you'll need to pick a different lender on our list.
Auto Loan Lender for Bad Credit Trustworthiness
The Better Business Bureau, a non-profit organization focused on consumer protection and trust, evaluates businesses using factors like their responsiveness to consumer complaints, honesty in advertising, and clarity about business practices. Here is each company's score:
| Lender | BBB Grade |
| Myautoloan | A+ |
| Capital One | A- |
| Carvana | NR |
| Autopay | A+ |
| Auto Credit Express | A+ |
| Openroad Lending | A+ |
All of our top picks, except Carvana, are rated A- or higher by the BBB. Keep in mind that a high BBB score does not ensure a positive relationship with a lender. You should keep doing research and talking to others who have used the company to get the most comprehensive information possible.
The BBB has no rating for Carvana. The company was at the center of a controversy in which it allegedly sold customers cars without giving them the titles to the vehicles. A lawsuit filed against the company claimed it failed to register cars in a timely fashion, sometimes taking more than two years. The lender also at various times has had its license suspended in multiple states, including Michigan and Illinois.
If this history makes you uncomfortable, you may consider using one of the other auto loan lenders on our list.
Our Experts' Advice for Choosing the Best Auto Loan for Bad Credit
Can you get an auto loan with bad credit?
Kareem Saleh:
"It's possible to get an auto loan with bad credit, although it will take more time and cost you more. Our research at FairPlay shows that the algorithms used by lenders to approve or reject a loan often weigh credit scores more heavily than other metrics. Thus, lenders will view those with lower credit scores as higher risk and may require a larger down payment, higher interest rates and more penalties, if they provide you a loan at all.
Unfortunately, our data also finds that historically disadvantaged groups, including people of color and women, are the most adversely impacted by bias in algorithms."
Geoff Cudd:
"You can absolutely get an auto loan with bad credit. Start your search with your own bank or credit union. Since you already have an established relationship with them, they may be more open to lending to you, even with bad credit. It's also a great idea to turn to the resource we all use for just about everything else: the internet. Plenty of online lenders are willing to work with car buyers who have subprime credit and this can be an easier, less stressful alternative to buy-her-pay-here dealers."
Ryan Wangman:
"If you have bad credit, you'll need to find a company that lends to borrowers with adverse credit histories. Start your search with this guide, then see what terms you prequalify for with different lenders. Make sure you aren't just comparing rates, but also fees and repayment term lengths."
What are the cons of getting an auto loan with bad credit?
Saleh:
"Getting an auto loan with bad credit has downsides, which can have lasting ramifications for borrowers. This includes:
- Higher interest rates: Lenders will view those with bad credit as a higher risk, which result in higher interest rates.
- Larger down payments: In order to reduce the overall risk of the loan, lenders may require a larger down payment than someone with better credit.
- Smaller loan amounts: Lenders may limit the amount of the loan that they are willing to offer someone with bad credit.
- Shorter loan terms: Since lenders view those with bad credit as more of a risk, they may shorten the terms of the loan resulting in higher monthly payments.
- Higher fees: Lenders may charge higher fees to those with bad credit, including origination fees, early payment penalties or even application fees."
Cudd:
"The biggest con of getting an auto loan with bad credit is that you have fewer options than borrowers with good credit. With the options you do have, interest rates will likely be higher and required down payments will be larger than taking out a loan with good or great credit. Unfortunately, if the credit bureau has marked you as a less-than-great borrower, loan companies and dealerships will often leverage that information to get you to fork over more cash."
Wangman:
"Borrowers with bad credit will pay higher interest rates than borrowers with a stellar credit history. Those higher interest rates will raise the price of your loan significantly, potentially adding hundreds or thousands of dollars in increased borrowing costs.
What steps can you take to improve your credit to improve your chances of qualifying or getting a better rate?
Saleh:
"To improve your credit, here are some steps you can take:
- Pay bills on time every month: Having a record of on-time payments is one of the best ways to improve your credit score.
- Pay down any outstanding debt: High credit utilization ratios can hurt your credit score, so paying down outstanding balances can help improve it.
- Don't open new lines of credit: Every time you open a new line of credit, it can act as a temporary drag on your score, so avoid opening any new accounts until you have secured the auto loan.
- Dispute any inaccurate information on your report: If there is anything inaccurate or out of date on your credit reports, it is important to dispute it as soon as possible in order to get the information corrected.
- Monitor your progress regularly: Keeping track of how well you are doing over time will help ensure that you have an accurate picture of where you stand when applying for loans or other forms of financing."
Cudd:
"The biggest and most impactful step you can take to improve your credit and thus increase your chances of qualifying for a better car loan is to pay off or settle your debts. Start with paying off any past-due accounts, then get on top of your credit card payments. Try not to take out any new credit cards or open new accounts, as this can dig your credit hole even deeper."
Wangman:
"The most important thing you can do to improve your credit score is to pay your bills in a timely manner. A history of on-time, reliable payments will boost your credit score over time, though it may take a second to see improvements. You can also add a cosigner to a loan to improve your score too."