It’s difficult to find bad credit car loans with reasonable interest rates, but they’re on the market. Auto lenders view borrowers with poor credit as the least likely to pay loans off, so it can be hard for these consumers to get low interest rates or to even get loan approval.

But some companies focus on auto financing for people with bad credit. You’ll still pay higher interest rates than borrowers with good credit, but we found four companies that offer bad credit car loans with acceptable terms.

4 Best Providers For Bad Credit Car Loans

Many borrowers looking for bad credit car loans find luck with Auto Credit Express, myAutoloan, Auto Approve, and Capital One. Each of these auto lenders sets low minimum credit score requirements–or none at all. They also have low annual income standards and receive standout reviews from customers.

Lender

Award

Minimum 

Credit Score

Minimum

Annual Income

1. Auto Credit Express

Best for Bad Credit

No minimum

$18,000

2. myAutoloan

Best Auto Loan Marketplace

575

$21,600

(purchase)

$18,000

(refinance)

3. Auto Approve

Best for Refinancing

580

$18,000

4. Capital One

Best Prequalification Process

No minimum

$18,000

Keep in mind that Auto Credit Express, myAutoloan, and Auto Approve work as auto financing marketplaces. That means potential borrowers who use these sites will receive offers from lenders rather than the two companies themselves. Also, Auto Approve only serves borrowers who need to refinance a car loan.

While you can get a bad credit auto loan from a car dealership, expect it to come with a higher monthly payment than a loan from an online lender. Loan payments are usually pricier through dealerships because of higher interest rates.

#1 Auto Credit Express: Best For Bad Credit

Like most of the lenders on our list, Auto Credit Express connects drivers with auto loan companies instead of offering its own vehicle financing.

People with bad credit can find loans for new or used cars through Auto Credit Express, as well as options for refinancing or leasing. Because of its broad availability and relatively low standards for approval, we named Auto Credit Express Best for Bad Credit.

Auto Credit Express Pros

Auto Credit Express Cons

Easy to compare providers’ rates

Not an actual auto lender

No minimum FICO® credit score

Offers financing during bankruptcy

#2 myAutoloan: Best Auto Loan Marketplace

Those seeking an exceptional vehicle financing marketplace should consider myAutoloan. As we mentioned, the company connects car buyers with lenders instead of offering its own loans.

Compared to our other picks for the top bad credit car loan providers, myAutoloan has slightly higher minimum requirements. However, myAutoloan has a stellar customer rating of 4.3 out of 5.0 stars from over 750 reviews on Trustpilot.

myAutoloan Pros

myAutoloan Cons

Outstanding customer service scores

Higher credit and income requirements

than some providers

Easy to compare loan offers

Plenty of financing options

#3 Auto Approve: Best For Refinancing

Auto Approve is well worth a look for those hoping to refinance a current bad credit car loan. You’ll likely get a steep rate when you finance a car if you have bad credit, but it’s easier to get competitive interest rates by refinancing once you’ve paid off some of your original loan.

Borrowers also appreciate Auto Approve for its great customer service. The auto refinancing marketplace earns 4.7 out of 5.0 stars from over 3,000 customers on Trustpilot, making it one of the industry’s top performers.

Auto Approve Pros

Auto Approve Cons

High customer satisfaction

Only offers vehicle refinancing

Partners with a network of lenders

Works with borrowers who

have bad credit

#4 Capital One: Best Prequalification Process

While you may not expect large companies such as Capital One to offer bad credit car loans, the provider is worth consideration. Capital One doesn’t have a minimum credit score requirement, so even drivers with relatively poor credit history may prequalify for a loan.

Borrowers can finance new or used cars or refinance their existing auto loans through Capital One. Keep in mind that Capital One auto loans are only available if you purchase a vehicle from a qualifying dealership, and the company doesn’t offer preapproval.

Capital One Pros

Capital One Cons

No minimum FICO credit score

No preapproval process

Plenty of car financing options

Only works with certain dealerships

Backed by a large provider

What Is A Bad Credit Score?

Drivers looking for bad credit car loans typically have FICO credit scores below 580, which puts them in the “poor” credit category. While it’s possible to get an offer for financing a car with credit scores this low, loan applicants in this range are more likely to be rejected.

Below is data on the average interest rates for borrowers in different credit score ranges from Experian’s Q4 2021 State of the Automotive Finance Market report:

Credit Score

Average Interest Rate

for New Cars

Average Interest Rate

for Used Cars

781–850

2.47 percent

3.61 percent

661–780

3.51 percent

5.38 percent

601–660

6.07 percent

9.8 percent

501–600

9.41 percent

15.96 percent

300–500

12.53 percent

19.87 percent

As you can see, you’ll usually pay a steep interest rate for a bad credit car loan. Loan rates between 10 percent and 20 percent are typical for borrowers with poor credit, so you’re probably overpaying if you receive a rate of 25 percent or higher.

Can I Get A Car Loan With Bad Credit?

Borrowers sometimes have difficulty finding bad credit car loans, but certain auto lenders focus on the category. Because many leading car finance companies avoid those with below-average credit, a space in the market has developed for bad credit car loan providers.

Regardless of which bad credit loan provider you pick, expect to pay a relatively high annual percentage rate (APR), which is the combination of the interest rate and any added fees. You have a better chance of getting approved if you focus your search on auto financing companies that specialize in bad credit car loans.

There are two ways to discover if your credit score makes you eligible for an auto loan: prequalification and preapproval. When you prequalify for vehicle financing, a lender gives you an estimate of what your interest rate could be. Preapproval is typically more useful, as it nearly guarantees financing from a car loan company and requires a hard credit check.

It may seem nearly impossible to receive competitive rates for bad credit car loans, but using an auto loan calculator could reveal some appealing choices.

6 Tips To Get Approved For Bad Credit Car Loans

If you get approved for a bad credit car loan, it may come with costly terms. Below are six tips to help you get approved for a reasonably cost-effective bad credit car loan:

  • Look for cars you can afford: Only look for vehicles you’ll be able to pay off, as this could make you appear less risky in the eyes of auto lenders. However, while used vehicles tend to be cheaper, they typically come with higher APRs.
  • Offer a higher down payment: The more money you put down before beginning a bad credit car loan, the less risk the lender faces. You’ll be much more likely to be approved if you cover a significant down payment for your new vehicle, whether with money or a trade-in vehicle.
  • Get a loan co-signer: Adding a co-signer to a bad credit car loan means another person promises to pay the lender if you default. Since this reduces the risk to vehicle financing providers, it makes you much more likely to get approved.
  • Improve your credit score: Increase your credit score over time by reducing your debt and building a solid payment history on your credit report.
  • Compare bad credit car loan options: Not all bad credit car loan providers offer the same interest rates, so comparing auto lenders could help you find savings. All hard credit checks relating to your car loan are counted as a single inquiry for up to 30 days, so rate shopping during the car-buying process won’t impact your credit more than once.
  • Consider credit unions: Some borrowers with bad credit find luck getting car financing through credit unions such as PenFed. This is because credit unions often have less strict credit requirements than banks.

Frequently Asked Questions

How We Rate Loan Providers

Our review process aims to deliver consistent and unbiased assessments of auto loan providers. While there are multiple qualities that make a loan company successful, our review team focuses on those we believe are the most important for consumers:

  • Rates: Auto loan companies with high loan amounts and low APRs are more likely to meet customer needs.
  • Reputation: Our review team explored ratings from experts and each lender’s number of years in business when giving this score.
  • Availability: Companies that cover a variety of circumstances scored best in this category.
  • Customer Experience: This rating is based on transparency and consumer satisfaction ratings. We also took into account the helpfulness of each loan provider’s team based on our shopper analysis.

*Data accurate at time of publication.