Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Ashley Fricker
The attraction of pre-approved car loans is that they provide you with some bargaining power when you negotiate a loan with a car dealer. While not a guarantee of final credit approval, pre-approval tells lenders that you meet their minimum qualifications for a loan. On that basis, you and the dealer can work together to (hopefully) arrive at a satisfactory solution.
As you read on, you’ll learn that having bad credit need not prevent you from getting a pre-approved car loan. The companies reviewed below are comfortable working with consumers of every stripe, including those with low credit scores.
Just as importantly, if you have poor credit, we’re confident that you’ll be comfortable working with them.
Best Overall Provider of Pre-Approved Car Loans
Our top-ranked provider of pre-approved car loans is Auto Credit Express. Founded in 1999, the company matches pre-approved borrowers with car dealers on its large network of direct lenders. In less than a minute, it can pre-approve you for an auto loan without hurting your credit score.
- 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
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| 3.99% - 29.99% | 1999 | 3 minutes | 9.5/10 |
To receive pre-approval, you complete a short loan request form with information about your monthly income, credit profile, housing costs, debt service, and garnishments.
You must document at least $1,500 in monthly income to show that you can afford the loan payment, including the sales tax. You’ll then be connected to a dealership in your vicinity that is willing to work with you despite your bad credit.
More Pre-Approved Car Loans to Consider
Like Auto Credit Express, these companies can pre-approve your bad credit car loan request without performing a hard credit inquiry, thereby protecting your credit score from further damage.
Each lender has one goal in mind — to find a way to say “yes” to your pre-approved loan financing options.
2. LendingTree
- Auto loans for purchase, refinance, and lease buyouts
- Nationwide lender network
- Get matched with up to 5 lenders that fit your financial profile
- It only takes a few minutes and is free with no obligation
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1998 | 4 minutes | 9.5/10 |
LendingTree can net you up to five preapproved offers in just minutes. You can then compare your offers and choose the best one. There’s no obligation to accept a loan offer, and your credit won’t be pulled until you decide to apply for the loan.
- Loans for new, used, and refinancing
- Queries a national network of lenders
- Bad credit OK
- Get up to 4 offers in minutes
- Receive online loan certificate or check within 24 hours
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 2003 | 2 minutes | 8.5/10 |
The network of direct lenders at MyAutoloan.com can finance any kind of car loan as well as cash-out refinancing and other financing options for a used or new car. In less than 10 minutes, MyAutoloan can find you up to four loan option offerings from dealers experienced with subprime borrowers. That way, you can compare each participating dealer’s auto loan rate offers to see which pre-approved auto loan is the most appropriate for your circumstances.
- Free, no-obligation application
- Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
- Affordable payments and no application fees
- Connects thousands of car buyers with auto financing daily
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1994 | 3 minutes | 9.0/10 |
The Car.Loan.com auto dealer network is the nation’s largest, providing an unbeatable scope of bad credit auto loan financing options for car buyers with less than good credit. It takes just a few minutes to complete the short loan request form and receive pre-approval for an auto loan. You’ll then be contacted by a participating dealer that will work quickly to close the pre-approved loan you require for a used or new car at a competitive auto loan rate.
- Prequalify in minutes without impacting your credit score
- Refinancing loans save an average of $191 per month
- 125% financing available for cash-out refis
- PenFed Credit Union membership required but can be applied for at the same time as your loan
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| 5.19% and up | 1935 | 5 minutes | 8.5/10 |
PenFed Credit Union is a direct lender, not a lending network. You’ll be required to open a checking or savings account with a minimum $5 deposit to qualify for a loan. But once you become a member, you’ll have access to lower rates and fees thanks to its credit union status.
6. RefiJet
- RefiJet helps people lower their monthly auto payment
- Pre-qualifying for a refinance auto loan does not impact your credit score
- Nationwide network of lenders
- Presents you with options from lenders that fit your situation
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 2016 | 5 minutes | 8.0/10 |
RefiJet can preapprove you for multiple refinancing quotes with no effect on your credit score. If you want to transfer your existing auto loan into one from a new lender with more favorable terms based on your current financial situation, RefiJet can help. You may even save money each month and get to skip your first few car payments.
Direct Dealers That Offer Pre-Approval
The following companies are dealers that operate online and in their nationwide dealers. All can try to pre-approve you for an auto loan with bad credit.
7. Carvana
Carvana can facilitate auto loan pre-approval with only a soft pull of your credit report, postponing the hard inquiry until final approval. Pre-approved auto loan offers are good for 45 days on more than 31,000 vehicles in stock.
You must be 18 and earn a minimum annual income of $4,000 to qualify.
8. CarMax
CarMax uses a network of nearly 200 dealers nationwide to arrange a financing option for car buyers with all types of credit. You can receive instant pre-approval for financing, but you can also choose another lender, including a bank with online banking, a credit union, or another financial institution.
CarMax can also refinance your current car if you’d like to cash out some of your car’s equity.
9. DriveTime
DriveTime prides itself on perfecting instantly approved car loans for all credit types, from excellent credit to dismal. DriveTime will personalize a loan offer to fit your budget with an affordable down payment and monthly payment installments that won’t break the bank.
The company has 130 dealerships nationwide and has originated more than 4 million loans.
How Do I Get Pre-Approved For a Car Loan?
All the auto lenders featured in this review offer an instant pre-approval decision when you complete a short loan request form or answer a few online questions. An auto loan pre-approval is a necessary step toward getting you the loan you want, although it doesn’t guarantee final approval.
Note that you can also fill out a loan application for a pre-approved loan at a financial institution like your online banking branch or local credit union. You will have to join the credit union before starting the car-buying process.
Before receiving your loan, you’ll have to fill out a more extensive credit application and likely submit to a hard inquiry of your credit. A hard credit pull can temporarily cause your credit score to drop by five to 10 points, but the effect wears off within one year.
Can I Get Pre-Approval With Bad Credit?
Less than excellent credit (indeed, way less) need not prevent you from receiving a car loan pre-approval. The reviewed auto lenders all share a commitment to work with consumers of every credit type, including those with bad credit or no credit at all.
Lenders can risk bad credit loans for several reasons. The most important is that a financed vehicle serves as collateral for the loan.
Unlike a personal loan, if you miss payments, the dealer is likely to repossess the car. However, a personal loan is usually harder to get.
In addition, a dealer may require a down payment (possibly via a cash advance from your credit card) and a higher-than-average annual percentage rate on the loan. It may ask a borrower to follow a weekly or bi-weekly automatic payment schedule and may even require the borrower to visit the dealership and pay in person.
Alternatively, you may have to set up a direct deposit schedule with the dealer. A direct deposit is an electronic loan payment from your bank account to the recipients.
You may have to accept a longer loan term than you had planned — a car loan term can be as long as eight years — although a shorter auto financing term may be possible.
Your income is a determining factor for any pre-approved car loan. Most lenders set a minimum threshold for monthly income for prequalification that will allow you to afford the monthly payment amount.
Your income may come from employment, benefits, alimony, or any other dependable source. The lender may also insist that you sign up for automatic payment transactions via autopay.
Dealers will not typically offer you a loan if you are in the midst of active bankruptcy proceedings, preferring to wait until the bankruptcy is fully discharged. All dealers welcome cosigners with good credit.
Does Pre-Approval Guarantee a Car Loan?
No lender can guarantee final auto loan approval because the information needed to gain an auto loan pre-approval is incomplete. The fact is that final auto loan approval requires more extensive checking of your finances, including a hard pull of your credit report.
This is not to imply that a vehicle loan pre-approval is worthless. Quite the contrary, a pre-qualification offer improves your chances for success. A pre-approved car loan gives you the credibility to negotiate with a car dealer, with both of you knowing that prequalification makes it easier for you to go elsewhere if necessary.
If you fail to receive a loan pre-qualification offer, you’ll have a sure indication that you must take steps to improve your credit. This may include paying down existing debt and paying all your bills on time, every time.
Do Pre-Approvals Affect Your Credit Score?
No, your credit score will not be impacted by the pre-approval process. The reason is that the lending services do not perform a hard inquiry of your credit until the final approval stage.
Lenders perform a soft inquiry as part of pre-approving your loan. A soft inquiry provides incomplete information about your credit, but it is useful in helping you qualify for a loan.
A hard inquiry can impact your score, but the effect is small and temporary. You must authorize a lender to make a hard inquiry as part of the credit application process, and you can have any unauthorized hard pulls of your credit removed from your credit report if you choose to dispute them.
Can You Be Denied a Car Loan After Pre-Approval?
Certainly, pre-approval is no guarantee that your vehicle loan won’t be denied on any number of grounds. Information learned through a credit check may defeat your chances for final credit approval.
For example, if you’ve been convicted of fraud, a dealer may be unwilling to do business with you unless much time has passed.
Other events that may deep-six your loan include prior delinquencies, repossessions, collections, write-offs, settlements, garnishments, foreclosures, bankruptcies, and legal judgments.
Most derogatory information ages off your credit reports within seven years, although some bankruptcies may remain on your reports for up to 10 years. Therefore, you have cause for hope — even if your loan is denied now, it may be approved later on if enough time has passed since your last major financial problem.
Many folks with blemished credit reports hire the services of a credit repair company that will aggressively work to challenge and remove unverified, incorrect, or misleading information from your credit history. You can attempt to do this yourself, but it requires time, patience, and an understanding of how this process operates.
Credit repair is worthwhile for removing invalid data from your credit reports, and the companies specializing in this service usually charge reasonable rates. The service typically costs between $50 and $150 per month. Subscriptions usually run from four to six months, but you can cancel at any item.
Not all credit repair companies are reputable, so we urge you to check our recommendations and third-party ratings before signing up.
Keep in mind that there will be little that a credit repair service can accomplish if your credit reports are already clean. That’s why they can’t guarantee significant results in terms of lifting your credit scores.
Compare Pre-Approved Car Loans Online
Our review of pre-approved car loans should be good news for most consumers, even those with poor credit or no credit history. By clicking on the APPLY HERE links, you can get additional information about each lending service and the specific requirements each imposes.
After receiving pre-approval, you can fill out a loan application, but you are never under any obligation to do so. The lending services are free, although direct lenders may impose various fees to process your loan.
Always understand the terms of any loan before signing the loan agreement and make a note of any special fees the dealer may add on during the car buying process.
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