Getting an auto loan with bad credit and not having to put anything down may sound like a stretch, but it’s very doable today. Many of us need access to a car to get to and from work, run errands, and so on.
Over 80% of new cars and over 50% of used cars in the U.S. are financed with a loan or lease. Your opportunity to own a vehicle isn’t completely lost just because you have poor credit or can’t make a down payment.
In fact, there are specific online lenders who focus on providing auto loans for bad credit with no down payment. The focus will shift from your credit history toward other factors like your income and a loan amount you can afford to pay back in a timely manner.
In this article, we’ll go over the top 4 auto loans for bad credit with no down payment. Plus, we’ll share some key ways to ensure you get approved for one of these loans.
Loan Amount$20,000 – $45,000
APR3.99% – 29.99%
Features & Benefits
- Minimum Credit Score: 400
- Helps car buyers who have low credit scores, bankruptcies, or repossessions.
- Allows cosigners
Auto Credit Express has been issuing bad credit auto loans since 1999. They work with a network of dealer partners to help you find an auto loan quickly. You can find auto financing even if you’ve filed for bankruptcy in the past or have no credit history.
To qualify, you must have a full-time job and earn at least $1,500 per month. You can submit a prequalification form online in as little as 30 seconds. Same day approval is available for a loan.
Keep in mind that Auto Credit Express will match you with a local lender after shopping around to help you find the best financing deal. They also won’t work with any private sellers, so you must consider financing a car from a dealer or legitimate car lot.
Loan Amount1,000 – $100,000
APR3.90 – 27.90%
Features & Benefits
- Minimum Credit Score: 450
- Application process 100% online
- Get pre-qualified with a soft credit check
Carvana saves you time by allowing you to get preapproved for financing before you even start searching for a vehicle. It takes just 2 minutes to get preapproved on their site, and this has no effect on your credit.
While there is no minimum credit score to qualify you for a loan, you must choose a vehicle from Carvana’s inventory. Once you receive your financing rate from Carvana, it’s good for 45 days.
Loan Amount$7,500 – $45,000
APR3.0 – 25.00%
Loan Term36 – 72 months
Features & Benefits
- Help individuals with little to no credit
- No monthly income requirements
- Get approved in less than 30 minutes
Car.Loan.com offers fast and easy approvals if you’re looking to finance a car with bad credit. They’ve teamed up with the nation’s largest network of auto dealers who are trained in special finance.
The online application only takes 3 minutes to complete and same-day approval is available. There is no minimum credit score requirement. However, each lender has their own requirements, so your dealer options may vary.
Still, this is a solid option to consider since Car.Loan.com is geared toward borrowers with bad credit or no credit history.
Loan Amount$8,000 – $100,000
APR3.69 – 21.00%
Loan Term24 – 72 months
Features & Benefits
- Minimum Credit Score: 575
- Up to 4 lender matches with a soft credit check
- Get approved within as little as 30 seconds
MyAutoLoan.com offers bad credit auto loans for both used and new vehicles. This online lending network connects you with local dealers so you can get offers quickly.
They also have a free interest-rate estimate feature so you can get a clear view of what your interest rate might be given your current credit score.
Applying to finance a car with bad credit on the site is easy. Just select the type of loan you’re looking for, then complete a quick and secure online application. It generally takes less than a few minutes to receive a decision and compare offers for an auto loan.
How to Get Approved For Auto Loans For Bad Credit With No Money Down
Bad credit auto loans are different from traditional auto loans. Of course, it helps to find a lender who understands that everyone’s credit isn’t perfect. However, they will still have their own requirements so here are a few things you can do on your end to ensure you get a loan.
Meet the Minimum Income Requirements
Since your credit score can make you seem like a risky borrower, the next major factor that will be considered is your income. Make sure you’re working full-time or at least earning $1,500 to $2,000 per month to qualify for a bad credit auto loan.
Stay At Your Job as Long As You Can
If you know that your credit isn’t the best but realize you may need to get a car loan soon, stay at your current job as long as possible. Lenders like to see that you have a consistent source of income. While the general requirement is to be at your employer for at least 6 months, the longer your history is the better it will look on an application.
Stay At Your Current Residence For at Least a Year
Just like with your job, staying at the same residence for at least a year can contribute to your stability. Even if your credit is bad, the fact that you’ve kept up with your rent or mortgage payments for the past year or so can definitely count for something.
Maintain a Personal Bank Account
Maintaining a personal checking account with no overdrafts is another way to demonstrate that you’re financially responsible despite having a low credit score.
Have a Low Debt-to-Income Ratio
Your debt-to-income ratio represents how much your existing minimum monthly payments are compared to your monthly income. If you have student loans, high credit card balances, and other loans, it may be harder to qualify for an auto loan with no down payment. You may want to focus on lowering your debt-to-income ratio first be reducing some of your other debt balances. Doing so could also help improve your credit score in the process.
Should You Really Get an Auto Loan With No Money Down?
Putting money down on a vehicle simply means that you’re lowering the amount of money you’d have to borrow with a loan. When you put no money down, it’s important to make sure that you can afford to repay the total loan amount on time.
It’s also worth mentioning that you could be paying more money out of pocket over the loan term, especially if you have bad credit. Bad credit auto loans tend to have higher interest rates so you must factor that in with a longer-term when you don’t put any money down.
Realize you don’t have to make a massive down payment. Even putting $100 to $500 down could make a difference. However, if you can’t afford to put any money down right now, know that there are still options to help you get a loan.
Make sure you run the numbers before signing an auto loan agreement to make sure you can afford to make the payments on time. Using free tools like Car.Loan.com’s free monthly payment calculator and loan estimator can help.