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It can be difficult to get approved for a car loan with bad credit. But while your options may be limited, some lenders specialize in working with borrowers with bad credit. Here are our top choices for the best car loans for bad credit, based on borrower requirements, rates, fees, and loan terms.
Best Car Loans for Bad Credit of 2023
- Best for Most Borrowers: AUTOPAY
- Best for Only Used Car Loans: CarMax
- Best for Full Car Buying Experience: Carvana
- Best for High Maximum Accepted Mileage: OpenRoad Lending
Thinking about applying with a co-borrower, or just want to see a broader selection? Check out our picks for the best overall auto loan rates.
Best for Most Borrowers : AUTOPAY
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AutoPay
- APR Range: 2.99% and up
- Loan Amounts: $2,500–$100,000
- Loan Terms: 2–8 years
Minimum credit score of 500
Works with several lenders to help you find a loan
Offers pre-qualification with a soft credit check
Allows co-signers
Low transparency about rates
Unclear eligibility requirements
AUTOPAY is a marketplace that offers a wide range of financing options, including loans for new and used vehicles, refinance loans (including a cash-out option), and lease buyouts. According to customer support, borrowers are required to have a minimum credit score of just 500 and a monthly income of at least $2,500.
If you're concerned about the impact of a hard inquiry when applying for a loan, you'll be able to compare rates from the marketplace's partner lenders with just a soft credit check. If you can't get approved on your own or your rate would be too high, you can apply with a co-signer.
AUTOPAY’s loan amounts and repayment terms are flexible, but it doesn't disclose a maximum rate, making it difficult for bad-credit borrowers to get an idea of what to expect without going through the pre-qualification process. There's also no information on its website about how long it takes to get an application approved or a loan funded.
- Loans are available in all 50 states, the District of Columbia, and Puerto Rico.
- Minimum credit score: 500 (according to customer support)
- MInimum monthly income: $2,500 (according to customer support)
- Maximum accepted mileage: 150,000 miles
- Maximum accepted age of the vehicle: 10 years old
- Maximum loan-to-value ratio: Not disclosed
- Private-party vehicle purchases: Allowed
Best for Only Used Car Loans : CarMax
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CarMax
- APR Range: Not disclosed
- Loan Amounts: $5,000–$100,000
- Loan Terms: 3–6 years
No minimum credit score requirement
Convenient purchase and financing experience
Offers a three-day window to find better financing
Offers pre-qualification with a soft credit check
Unclear eligibility requirements
Requires you to buy a CarMax vehicle
APRs can be high
CarMax is a used-car retailer that operates nearly 250 stores nationwide, making it worth checking out if you’re in the market for a pre-owned vehicle. In addition to in-house financing, CarMax also works with other major lenders to help you find the right loan for you. It has no minimum credit score requirement, inviting anyone to apply for financing.
Unfortunately, the lender is not transparent about the specific borrower requirements and vehicle requirements, so you'll need to go through the pre-qualification process to get an idea of what's available. Fortunately, you can apply with a co-signer if the terms you get on your own aren't great.
Another major feature that sets CarMax apart is that you can continue shopping for a loan for up to three days after your purchase. If you find something better, you can replace your CarMax loan at no cost. The lender's APR is competitive at the low end, but its maximum APR is likely to be quite high (based on sample quotes).
- Does not disclose a minimum credit score or income requirements
- Vehicles and loans are available in 41 states, excluding Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, Wyoming, and West Virginia.
- Maximum loan-to-value ratio: Not disclosed
- Maximum accepted mileage: Not disclosed
- Maximum accepted age of the vehicle: None (vehicle must be purchased through CarMax)
- Private-party vehicle purchases: Not allowed
- “I've been satisfied with the products that I've gotten there. I've bought, and my family has bought more than one car from them, and I've got friends who have, so I think it's pretty well-run. And I've been happy with the warranties on the repairs two cars ago.”
- “...Over the years I started buying from CarMax, maybe about 15 years ago, and had used the same salesman, usually. But this time it was during COVID when I got the car and they were trying to do everything that they could online. They would have even brought the car to me. If I picked it online they would have driven it to me and had me fill [out] the paperwork in my house. But because I was in a different state, they didn't do that.”
- “If I was going to do something differently, I'd probably check and see if [my] credit union had lower interest rates. … But that's the only thing I would do differently, is … go for something with a lower interest rate.”
*Customer reviews were collected from an independent Investopedia survey of 1,016 current, past, and prospective auto loan borrowers.
Best for Full Car Buying Experience : Carvana
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Carvana
- APR Range: Not disclosed
- Loan Amounts: Not disclosed
- Loan Terms: 3–6 years
Works with borrowers with all types of credit
Offers a seven-day money-back guarantee
Offers pre-qualification with a soft credit check
Application process is 100% online
Requires a down payment
Must buy a used car through Carvana
Co-signers not allowed in all states
Carvana is an online used-car retailer that can guide you through the full car-buying experience. The catch is that you have to buy a vehicle with Carvana to use its financing. The lender doesn't offer a lot of transparency around credit requirements, but it does offer financing for all credit levels, and you can get an idea of your eligibility and potential terms with its pre-qualification process.
Carvana doesn't specify loan amounts or APRs, but it's safe to assume that you can finance any vehicle you buy through the retailer, as long as you meet the eligibility criteria. You should expect to pay the higher end of the APR range if you have poor credit.
If you're not satisfied with your vehicle or the financing terms, Carvana offers a seven-day money-back guarantee. However, there are some limits based on how far you drive during that time, or if you make modifications or get in an accident.
- Minimum credit score is not disclosed
- Minimum income: $4,000
- Carvana does not operate in Alaska or Hawaii.
- Co-signers are not allowed in Alaska, District of Columbia, Hawaii, Idaho, Illinois, Louisiana, Montana, Nebraska, North Dakota, South Dakota, and Wyoming.
- Vehicle must be purchased through Carvana.
- Maximum accepted mileage: 140,000 miles
- Maximum accepted age of the vehicle: Varies
- Maximum loan-to-value ratio: Not disclosed
- Private-party vehicle purchases: Not allowed
Best for High Maximum Accepted Mileage : OpenRoad Lending
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OpenRoad Lending
- APR Range: 1.99% and up
- Loan Amounts: $7,500–$100,000
- Loan Terms: 3–7 years
Maximum accepted mileage of 160,000 miles
Allows co-signers
Offers pre-qualification with a soft credit check
Only offers refinance loans
Website is outdated
OpenRoad Lending offers car loan refinancing, including cash-out options, with impressive starting rates. Loan amounts and repayment terms are relatively flexible, though some lenders offer lower loan amounts and more repayment options. Its loans are available to people with bad credit, with scores as low as 500 (according to customer support).
OpenRoad is a great choice if you want to refinance a vehicle with a lot of time on the road, because it allows you to finance vehicles with more miles (160,000) than any other bad credit lender we reviewed (according to customer support).
Unfortunately, the lender doesn't disclose its maximum interest rate, making it difficult to know what to expect if your credit isn’t in the best shape. And while you may receive a pre-qualification offer in the mail, you can't get pre-qualified online to compare rates—you’ll have to submit a complete application. If you can't get approved on your own, however, you can add a co-signer to improve your odds.
Some of the information found on OpenRoad Lending's website may be outdated and even conflicting in some areas, including when it comes to starting rates, loan amounts, income and mileage requirements, and more. It even includes information about purchase loans for new and used vehicles despite no longer offering these products. As a result, you won't really know what to expect unless you submit an application.
- Minimum credit score: 500 (according to customer support)
- Minimum monthly income: $1,500 (income from Uber or similar taxi services is not eligible)
- States available: 46 states (not available in Alaska, Hawaii, North Dakota, Nevada, and Wisconsin).
- Self-employed borrowers are ineligible.
- Maximum accepted mileage: 160,000 miles (according to customer support)
- Maximum accepted age of the vehicle: 8 years
- Maximum loan-to-value ratio: 125% in most cases; exceptions up to 180% can be made (according to customer support)
- Private-party vehicle purchases: Not allowed
- The following vehicles are ineligible: commercial vehicles and vehicles for business use; Oldsmobile, Daewoo, Smart Car, and Isuzu models; vehicles that are no longer being manufactured; motorcycles; recreational vehicles; trucks or vehicles larger than 3/4 ton.
Final Verdict
For the most part, options for bad credit auto loans are far from ideal. However, if you don't have a co-signer who can help you get approved for a low rate, these lenders can help you get the vehicle you need.
For most auto loan needs, consider AUTOPAY. However, if you're planning to buy a vehicle through CarMax or Carvana, it’s worth considering their financing options. For refinancing a high-mileage car, you may also want to apply with OpenRoad Lending as you shop around.
Guide to Choosing the Best Car Loans for Bad Credit
What Is Bad Credit for an Auto Loan?
According to FICO, a poor credit score ranges from 300 to 579. But credit scores aren’t all that matter. Depending on the lender, there may be additional credit requirements aside from a minimum score, such as not having any recent bankruptcies on your credit reports.
In some cases, you may be able to get approved for a loan without a credit check at all, but these loans are often prohibitively expensive. Make sure you read the fine print or speak with a representative from the lender before you apply for any loan.
FICO Score Ranges
| Rating | Score Range* |
|---|---|
| Excellent/Exceptional | 800–850 |
| Very Good | 740–799 |
| Good | 670–739 |
| Fair | 580–669 |
| Poor | 300–579 |
| No Credit | Not enough data to score |
*Source: myFICO
Comparing Bad-Credit Car Loans
As you shop around for an auto loan with bad credit, here are some of the features to keep an eye on:
- Loan options (new car loans, used car loans, refinance, cash-out refinance, private-party loans, etc.)
- Pre-qualification options
- Interest rates (including whether the lender is transparent about them)
- Origination fees and prepayment penalties
- Vehicle mileage and age requirements
- Vehicle model restrictions
- Minimum and maximum loan amounts, including the maximum loan-to-value ratio (LTV)
- Credit and income requirements
- Whether the lender allows co-signers
- State restrictions
Alternatives to Bad Credit Car Loans
Depending on your situation, you may have access to other options for financing your vehicle purchase:
- Take out a personal loan: Personal loans can be expensive if you have bad credit—interest rates can be as high as 36% or more in some cases. But unlike auto loans, personal loans don't require you to use your car as collateral (as long as they’re unsecured loans), so you won't risk repossession if you can't pay.
- Borrow from a family member or friend: If possible, consider asking a loved one to lend you the money you need to buy a car. Just make sure you draw up a loan agreement to make it official, and make it a priority to pay back the debt on time or early.
- Ask a loved one to co-sign your application: If you can't get a loan from a family member or friend, consider asking someone to co-sign your application. If they have good or excellent credit, it can improve your odds of getting favorable terms. Just make sure to make your payments on time to avoid damaging both of your credit profiles.
- Improve your credit before you apply: If buying a car isn't an urgent need, consider working on improving your credit before you shop around for a loan. Even if you can't wait until you reach good or excellent territory with your credit score, your efforts can pay off in the form of more options and lower rates.
- Put more money down: Some traditional auto lenders may be willing to work with bad-credit borrowers if they make a sizable down payment on the vehicle purchase.
Frequently Asked Questions
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How Do You Get a Car Loan With Bad Credit?
Car loans for people with bad credit are less common than car loans for good-credit borrowers, but they do exist. Take your time to research your options online before you visit the dealership to get an idea of what's available.
You may also consider buy here, pay here (BHPH) financing, which some dealerships offer. Before you do so, however, make sure to read the terms and conditions, as these loans can be incredibly expensive.
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Where Can You Get a Bad Credit Car Loan?
You can get a car loan with bad credit through certain dealerships, as well as from online lenders that specialize in these types of loans. If you're a member of a credit union, you may also consider contacting a loan officer to see if you qualify for an auto loan.
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Can You Get Guaranteed Approval for Bad Credit Car Loans?
Some lenders may offer guaranteed approval, even without a credit check. But while easy car loans for bad credit like this are tempting, make sure you know what the costs will be, as well as limitations and restrictions, to ensure it's a good idea. We typically recommend staying away from loans like these, and sticking with traditional auto loans and personal loans for bad credit.
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What's the Lowest Credit Score You Can Have for a Car Loan?
There's no minimum credit score required to get a car loan in general. Individual lenders may have minimum requirements to qualify, but they don’t usually specify the exact score they require. Regardless of where your credit stands, it's a good idea to shop around and get pre-qualified with as many lenders as possible to ensure you get the best offer available to you.
Methodology
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs.
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