With the average cost of a new vehicle hovering around $47,000, it makes sense why many people would choose to finance a car and pay off the loan over time.

Even used cars can cost upwards of $20,000 depending on the make and model. If you need to finance a car but don’t have good credit, this can put you in a tough situation. Usually, the best financing terms are rates are reserved for borrowers with above-average credit.

Some companies claiming to offer auto financing for applicants with bad credit seek to take advantage of their situation by selling low-quality cars and offering unfair loan terms.

This is why fact-checking and doing thorough research is important. Luckily, we’ve done a lot of this work for you by narrowing down some of the most credible and fair companies to choose from.

Here are 8 good options to consider if you’re looking to finance a car with bad credit.

1. Auto Credit Express

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Auto Credit Express has been issuing bad credit auto loans since 1999. This site works with a network of dealer partners to help you find an auto loan quickly. You can find auto financing here 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 pre-qualification 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.

Features and Benefits

  • Loan Amount: Varies
  • APR: 3.99% - 29.99%
  • Loan Term: Varies
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2. MyAutoLoan

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MyAutoLoan.com offers bad credit auto loans for both used and new vehicles. This is another online lending network that will connect you with local dealers so you can get offers quickly.

Their site also has 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 just takes a few minutes to receive a decision and compare offers for an auto loan.

Features and Benefits

  • Loan Amount: Varies
  • APR: Varies
  • Loan Term: 24 - 72 months
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3. Car.Loan.com

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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. While there are no minimum credit score requirements, individual lenders will still set their own requirements, so your dealer options can vary.

Still, this is a solid option to consider since Car.Loan.com is geared toward borrowers with bad credit or no credit history.

Features and Benefits

  • Loan Amount: Varies
  • APR: Varies
  • Loan Term: Varies
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4. Capital One Auto Finance

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Some major banks offer auto financing options for borrowers with bad credit as well. Capital One has an auto loan program where the minimum credit score to apply 500.

You must also have a minimum monthly income of $1,500 to $1,800. The car you choose to finance must have fewer than 120,000 miles and the model should be no older than 10 years.

Capital One allows you to prequalify for a loan on their site but keep in mind that a prequalification doesn’t automatically mean you’re approved. You must still submit a loan application to see how much you can get approved for and what your interest rate will be.

Features and Benefits

  • Loan Amount: Varies
  • APR: Varies
  • Loan Term: Varies
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5. LendingTree Auto Loan

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LendingTree is one of the most trusted platforms that allows you to shop and compare different loan rates online. While LendingTree doesn’t specialize in bad credit applicants, they do partner with several lenders and financial institutions so their reach is wide. You still have a good chance of finding options to help you finance a car with bad credit.

Comparing live auto rates is free and just takes a few minutes using their online tool. You will add information like your desired down payment amount, estimated loan amount, and the make and year of the vehicle. If you don’t know which vehicle you want to finance at the moment, you can always say so when filling out the form.

LendingTree will then connect you to loan offers from their partners based on your qualifications. Partners may perform a hard pull on your credit to get you pre-approved for a loan before you go to the dealership or car lot.

Features and Benefits

  • Loan Amount: Varies
  • APR: Varies
  • Loan Term: Varies
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6. Carvana

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Carvana saves you time by allowing you to get pre-approved for financing before you even start searching for a vehicle. It takes just 2 minutes to get pre-approved 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.

Features and Benefits

  • Loan Amount: Varies
  • APR: Varies
  • Loan Term: Varies
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7. Lending Club

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Lending Club is a peer lending site that specializes in personal loans, but you can still get financing if you’re looking to finance a car or refinance an existing auto loan. Lending Club is unique is that private investors get to select which loans they’d like to grant.

Having bad credit doesn’t automatically mean that you won’t get a loan because each investor has their own level of risk tolerance. For example, an investor may choose to grant your loan if you agree to pay a higher interest rate.

The good thing about Lending Club is that they offer fixed-rate loans with terms ranging from 3 to 5 years. Once you’re approved for a loan, the money gets deposited to your bank account in a few business days.

Features and Benefits

  • Loan Amount: Varies
  • APR: Varies
  • Loan Term: Varies
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8. Credit Unions

Credit unions tend to have lower fees than traditional banks and they may even be willing to work with someone who has bad credit. Credit unions typically require that you become a member in order to apply for a loan.

Their income and credit score requirements may vary. However, if you can save on your auto loan interest rate, it’s certainly worth a try.

FAQ

Is it harder to get an auto loan with a credit score of 500?

A credit score of 550 or lower is often considered subprime as well as a risk to lenders. While a traditional lender may not qualify you for a car loan, the key is to go to someone who will work with your bad credit. Lending networks that specialize in working with bad credit will already have dealers and lenders on hand that are willing to give you a loan.

Why are online lending networks a good option for auto loans when you have bad credit?

Online lending networks are actually a good option for anyone who’s looking for an auto loan regardless of your credit score. Lending networks like the ones mentioned above allow you to compare tons of dealer options all in one place. Plus, pre-qualifying and applying for financing online saves you time while helping you get loan funding faster.

Do I need to make a down payment or trade-in a vehicle to get an auto loan with bad credit?

Not necessarily. While trading in a vehicle can help lower the cost of your loan, but it’s not required. Most dealers will require you to make a down payment even if it’s small ($200 – $500). However, Auto Credit Express states on their website that you may be able to qualify for a loan with $0 down.

Do I need a cosigner?

No, you don’t always need a cosigner to finance a car with bad credit. While a cosigner could help you qualify for a loan with a traditional financial institution or lender, it also makes the cosigner responsible for the repayment of the loan. If don’t have a friend or family to cosign for you, consider trying the financing options mentioned in this article.

Summary

Having bad credit doesn’t mean you can’t get a car loan. It just means you have to look in different places. Realize that you probably won’t qualify for the best interest rates, but using one of the options we recommend can help you secure financing quickly.

You can also use these financing options as an opportunity to improve your credit by making on-time payments. In the future, you can consider refinancing to get a lower interest rate.