5 Guaranteed Auto Loans for Bad Credit in 2019

5 Guaranteed Auto Loans for Bad Credit in 2019
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Eric Bank
By: Eric Bank
Posted: July 23, 2019
Our popular “How-To” series is for those who seek to improve their subprime credit rating. Our articles follow strict editorial guidelines.

In the first quarter of 2018, 272.1 million cars were on the road in the United States. For many Americans, having a car is the only way to get to a job, which leaves people with bad credit in a difficult predicament. When your financial well-being depends on your access to wheels, you need to connect with a lender who will give you a car loan despite bad or scant credit.

The auto loans we review here may not guarantee approval of every loan application they receive, but you can bet they all go the extra mile to get to “yes.” It’s nice to know that credit-challenged drivers have viable options that can get them into a vehicle and on the road.

Auto Loans with Guaranteed Approval

Our experts have identified auto loan sources that connect you with lenders who look beyond your credit score. These networks of car dealers and lenders are adept at finding ways to virtually guarantee an auto loan for just about every applicant. Read on to see if one looks like a good fit for you.

  • Network of dealer partners has closed $1 billion in bad credit auto loans
  • Specializes in bad credit, no credit, bankruptcy and repossession
  • In business since 1999
  • Easy, 30-second pre-qualification form
  • Bad credit applicants must have $1500/month income to qualify
  • Click here for application, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
3.99% - 29.99% 1999 3 minutes 9.5/10

Auto Credit Express is all about getting you a quick decision on your auto loan. It goes beyond bad or scant credit, even bankruptcies and repossessions, by evaluating your monthly income and recurring debt. It takes 30 seconds to qualify for a loan and about three minutes to apply. The lender started in 1999 and is a member of the Internet Brands Automotive Group.

Car.Loan.Com has been hooking up credit-challenged borrowers with receptive lenders since 1994. Drivers with poor or no credit can fill out the short online auto finance request form. The site works with the country’s largest network of car dealers who are skilled in special finance. You can expect a decision in as little as 24 hours, and sometimes it takes only a few minutes.

MyAutoloan.com is a matching service that attempts to get you up to four offers in a matter of minutes. The site posts the lowest new auto rate for the day, but you can also apply for used car loans, refinancing, financing for private party purchases, or lease buyouts. It shares your loan application with its network banks, finance companies, automobile dealers, credit unions, and affiliates. Loans are available with terms ranging from 24 to 72 months.

4. RoadLoans.com

RoadLoans Logo

RoadLoans.com doesn’t claim to offer guaranteed auto loans, but it does promise easy, unpressured financing. It is a direct lender rather than a matching service, and it facilitates loans for new and used cars, as well as refinancing your current vehicle.

RoadLoans.com accepts applications from folks with all types of credit. You apply online for your loan, and, if pre-approved, you can immediately go car shopping at local dealerships with your loan packet in hand. Approvals are valid for 30 days.

You can refinance an existing auto loan and tap into your car’s equity to receive up to $5,000 cash back. That’s a lump-sum payment you receive when you negotiate the terms of the new loan. Cash back refinancing lets you lower your interest rate or monthly payments while receiving a cash payment you can use for any purpose. Depending on the timing, you may be able to skip a car payment when you refinance.

5. Buy-Here-Pay-Here Lots

Many dealerships throughout the country operate as buy-here-pay-here lots. These are dealerships that internally finance car loans instead of involving outside lenders.

Buy-here-pay-here lots specialize in serving consumers with bad or no credit. Generally, they make their loan decisions based on an applicant’s income rather than credit history.

One of their innovative practices is to accept multiple payments per month. This helps keep each payment affordable when it matches your pay schedule. Buy-here-pay-here dealerships can only profit when borrowers make timely payments, so they have a vested interest in offering affordable cars, flexible terms, and low-cost warranties or extended service agreements.

What is Guaranteed Auto Financing?

Guaranteed auto financing is what we call the efforts by certain lenders and lender-matching services to accommodate as many potential borrowers as possible. In effect, their practices and policies virtually guarantee that consumers with enough income can get auto financing despite bad or no credit. These lenders guarantee applicants will receive every possible consideration because they specialize in making loans that other lenders won’t.

Different strategies come into play that help get consumers with blemished credit behind the wheel of a new or used car. Online loan-matching services have incredibly low operating costs and receive payments from the lender, not the borrower. Their networks of lenders compete for your business, which can give you options that would be otherwise unavailable.

Some lenders are self-funding. For example, RoadLoans.com makes direct loans to applicants who receive pre-approval. Buyers know exactly how much they can spend on their wheels and can shop at many dealerships. Buy-here-pay-here dealerships are also self-funding, which requires flexible thinking on their part to earn a profit. That means not pressuring buyers into vehicles they can’t afford or agreeing to costly service contracts.

Another guarantee you can expect from the lenders featured in this article is that no one is likely to embarrass you over your financial situation. These lenders have seen just about everything and know that many good people face daunting financial challenges. These companies know it’s good business to conduct themselves in a professional, helpful way that promotes sales while making customers comfortable.

Can I Get a Car Loan with Bad Credit and No Money Down?

The average down payment on a car was 12% as of 2017. It is possible to get a car loan with bad credit and no money down, but it may not be your best option. Even a modest down payment of $100 reduces the amount you have to finance, lowering your periodic payments and total interest costs.

You could receive a higher APR if you insist on no down payment. Nonetheless, bad-credit lenders will try to accommodate you if it’s impossible for you to come up with a down payment.

Chart of Interest Rate Impact on Monthly Auto Loan Payments

The accessibility of zero-down-payment loans depends a lot on the car and the dealership. For example, the dealer might be running a promotion on certain vehicles that includes cash rebates that you can apply as a down payment. It’s also easier to arrange a no- or low-down-payment loan on affordable used cars, as they represent less risk to the dealer.

Naturally, you have an excellent chance of acquiring a no-money-down loan if you are trading in your current vehicle. Your equity in the vehicle serves as your down payment and reduces the total out-of-pocket costs for the new purchase.

Another way you may be able to avoid a down payment is to have a loan cosigner who has good credit. The cosigner is an additional resource the lender can tap if you have trouble making payments. Having a cosigner could also allow you to obtain a lower interest rate on the vehicle.

Sometimes, the best strategy is to postpone your purchase for a few weeks or months and use the extra time to save up for a down payment. Doing so will certainly improve your access to credit and reduce your overall costs.

Will a Down Payment Offset a Bad Credit Score?

For many, a down payment makes a virtue out of necessity. Auto Credit Express points out that most bad-credit lenders will not offer no-down-payment loans to subprime borrowers (i.e., those with credit scores below 580).

Instead, lenders would like to see a down payment of 10% or $1,000 from subprime borrowers. Therefore, a down payment can make all the difference in whether you get approved for the loan and the interest rate you’ll pay.

A down payment will not magically erase all the effects of a bad credit score, but it will certainly help you obtain a car loan. A down payment signals to the lender that you are serious about your payment obligations because you have some “skin in the game.” That is, you have something to lose if you skip payments, and are less likely to fall behind on the loan.

One of the effects of having a bad credit score is that lenders may be hesitant to sell you new or expensive cars for fear that you won’t be able to make the payments. However, you could have a low score due to past financial problems, but you have a steady source of income today. By making a significant down payment, you’re more likely to qualify for poor credit financing despite your low credit score.

Another consequence of having poor credit is that you may face high interest rates on your car loan. A down payment may cut your interest rates, which can save you hundreds or thousands over the life of the loan, making the down payment well worth it.

Even a large down payment won’t stop the lender from evaluating your residence history, income, and ability to pay. But, because it significantly reduces your loan-to-value ratio, a large down payment can land you a car that otherwise would be unavailable due to your bad credit score.

Can I Get Dealership Financing with Bad Credit?

Yes, four out of the five lenders in this review can provide you with dealership financing despite a bad credit score. The first three, Auto Credit Express, Car.Loan.Com, and MyAutoloan.com, are matching services that work with networks of lenders, including car dealerships. They may be able to arrange dealership financing even if your credit is poor.

Buy-here-pay-here dealerships offer direct loans to customers. That is, these dealerships use their own internal funds to finance loans. When you visit one of these dealerships, the finance officer will sit with you and explore your loan options.

When the financing comes directly from dealerships, they want you to be able to make your payments. Therefore, you aren’t likely to find these dealerships pressuring you to purchase more car than you can afford. And, you have the satisfaction of knowing the loan fits within your budget.

That makes dealership financing a win-win for you and the dealer, whether you think you have the credit score to buy a car.

Ways to Improve Auto Loan Offers

You should not overlook the advantages of third-party financing, however. These are loans that are pre-approved by banks, credit unions, and other financing companies, such as RoadLoans.com.

The matching service websites also offer these types of direct lenders. When you receive a pre-approved loan, you have the option of shopping wherever you please so that you can nail down the best deal.

Walking into a dealership with pre-approved financing puts you in the driver’s seat. The dealerships know you are likely to walk if you can’t get a good deal from them. That makes them more likely to accommodate your requirements even though your credit score is bad.

Hit the Road Regardless of Credit

Commuting to work, shopping, and chaperoning the kids are just three of the reasons why you might need a car. You can’t let your credit score get in the way.

Whether you ultimately can wrangle a loan depends largely on your credit score, income, down payment, trade-in allowances, and vehicle price. Our experts have evaluated the top sources of auto loans for folks with bad credit, and we think all these lenders can virtually guarantee you access to car financing.