Written by: Brandon Rossman
Edited by: Austin Lang
Reviewed by: Ashley Fricker
Subprime auto loans are positioned to help Americans find a way to commute to work, school, the grocery store, and everywhere else they need to go. A poor credit score can be an inhibitor for people who want to buy a new car, but the right subprime car loan can put you in a vehicle on terms that work for you.
You can check out our top-rated lending networks and direct dealers that work with bad credit below.
Top Recommended Subprime Auto Loans
These auto loan networks are rated at the top of our metrics for their approval time, bad credit financing, and the interest rates they offer. Each network partners with national car dealers, banks, and other direct lenders to facilitate thousands of online loans to get drivers with bad credit financing for a new car ASAP.
- 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 |
Auto Credit Express matches you with preapproved loan options from nearby dealerships and nationwide lenders. A borrower with bad credit will see subprime loan options that top out at a 29.99% interest rate from the largest network of car buying and financing resources in North America.
Auto Credit Express specializes in helping first-time buyers, people with various credit history issues such as delinquency or repossession, and people with past bankruptcy discharges.
| PROS | CONS |
|---|---|
| ✅ Welcomes borrowers with bad credit | ❌ Potential for high interest rates |
| ✅ Speedy prequalification process that won’t impact your credit score | ❌ Even though it has a large network, loans are limited to partner dealerships |
| ✅ Partners with dealerships nationwide |
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 is a nationwide lender network that can match you with up to five lenders. You can then choose the lender and quote that best matches what you need, whether that’s a low monthly payment or the best APR.
Prequalifying for a loan does not require a credit check and doesn’t cost you anything.
| PROS | CONS |
|---|---|
| ✅ Matches borrowers with up to five interested lenders | ❌ Potential high interest rates |
| ✅ Prequalify with no credit score impact | ❌ Filling out an application may result in multiple lenders contacting you via phone |
| ✅ Offers auto loans for purchase, refinance, or lease buyout |
- 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 |
MyAutoloan.com’s presents borrowers with up to four car loan offers in just minutes after they complete an application, no matter their credit scores. The car loan dealer network has an auto payment calculator right on its website that shows a subprime borrower exactly what their monthly payment and interest rate could be.
Borrowers are in the driver’s seat when looking for an auto loan, with MyAutoloan.com providing all of the subprime credit loan resources needed.
| PROS | CONS |
|---|---|
| ✅ Works with all borrowers, no matter their credit score | ❌ Subprime borrowers may pay much higher interest rates |
| ✅ Offers an auto loan payment calculator | ❌ Some network lenders may not finance certain vehicle models |
| ✅ Loan funding as fast as same day | ❌ Minimum loan amount of $8,000 for auto purchases and lease buyouts |
- 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 |
Car.Loan.com regards itself as the nation’s leading online car buying center for people with special circumstances. People with bad credit can find a subprime auto loan for a new or used car the same day they submit the application.
Car.Loan.com’s dealer partners have closed more than $1 billion in loans specifically for people who need a subprime car loan or needed an auto loan following a bankruptcy.
| PROS | CONS |
|---|---|
| ✅ Specializes in loans for subprime borrowers | ❌ Bad credit typically means higher interest rates |
| ✅ An established lending network with more than 30 years of experience | ❌ Only works with participating dealers |
| ✅ Free, fast application process | ❌ No loans for private party sales |
5. 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 is an auto refinance company that can help borrowers — even subprime borrowers — save money on their monthly payment or secure a lower APR, whatever their goals are. Prequalifying is easy and free and doesn’t affect your credit score.
| PROS | CONS |
|---|---|
| ✅ Works with credit scores as low as 500 | ❌ Charges an origination fee |
| ✅ Offers prequalification with no impact to your credit score | ❌ Potential higher interest rates |
| ✅ Flexible loan terms from 24 to 96 months | ❌ Only for refinancing an existing auto loan |
Reputable Dealerships with Subprime Auto Loan Options
These three auto dealers help buyers find the car they want at an attractive price. The dealers set up buyers with a lender that works with people of all credit types, including those with subprime credit scores.
6. CarMax
CarMax has its own auto financing division, but also offers financing options from multiple partners. Its subprime credit financing process is no-pressure and hassle-free. No matter which lender a car buyer goes with, the car’s price stays the same. CarMax even lets buyers shop around for a better interest rate or monthly payment for three days after taking the car off the lot to ensure they get the best deal.
7. Carvana
Carvana allows anyone with a bad credit history to finance a car through its websites with only a few conditions. Buyers need to be 18 years old or older, make at least $4,000 a year, and have no bankruptcies. Filling out the application does not affect your credit score. Prequalifying with a Carvana loan allows borrowers to browse the dealer’s inventory on terms the buyer is comfortable with.
8. DriveTime
DriveTime offers financing for all credit types and histories. The car dealer has options for people with poor credit, or those with a bankruptcy on record, or a high delinquency rate. But buyers with a bad credit history may have to buy a used car with heavily restricted terms and a higher interest rate.
What Is a Subprime Auto Loan?
Subprime credit scores are typically between 501 and 600. Using FICO as an example, you could have a poor or fair credit score and still be considered a subprime borrower. With VantageScore, a subprime score would be considered poor.
Here is a look at both scoring models and their categories:
| FICO Score Categories | Score Range | VantageScore Categories | Score Range |
|---|---|---|---|
| Exceptional | 800-850 | Excellent | 781-850 |
| Very Good | 740-799 | Good | 661-780 |
| Good | 670-739 | Fair | 601-660 |
| Fair | 580-669 | Poor | 500-600 |
| Poor | Below 580 | Very Poor | 300-499 |
Subprime auto loans are meant for people whose credit scores fall into the 501-600 range, and they will have more restrictive terms and higher interest rates.
Looking at your credit score and finding a way to boost it in the short term could be beneficial when you’re in the market for a new car. Lenders will look at borrowers with a higher credit score more favorably and will offer them better interest rates than they would a subprime borrower.
Subprime loans have a higher interest rate because borrowers who need them are most likely to default on the loans. Subprime auto loan interest rates are usually at least triple the prime loan rate.
How Does the Subprime Auto Loan Application Process Work?
Applying for an auto loan with a low credit score is like applying for any other auto loan, but lenders will likely scrutinize subprime borrowers more because of the potential risk they represent.
If you prequalify through an auto loan network, you can save time because the network will present your initial application to multiple lenders. This pre-qualification form typically includes details about you, your income, the amount you plan to finance, and your Social Security number, so lenders can run a soft credit check.
The process may yield results the same day, and you can compare lender offers to determine if you want to submit an official application with the lender.
In the full application with the lender, you need to include proof of residence, proof of income, and your Social Security number. A bill or your driver’s license will serve as proof of residence, while proof of income can come from pay stubs from your employer. This will also result in a hard inquiry that will appear on your credit report — and possibly impact your score.
If you have trouble getting approved, you may want to consider enlisting a qualified cosigner with better credit who can help you secure financing.
What Is the Average Subprime Auto Loan Rate?
Buying a new car or a used car will change the interest rate subprime borrowers receive. According to Experian, the average annual percentage rate for subprime borrowers (500 to 600 FICO scores) on a new car is 13% as of Q3, 2024. The average interest rate for a used car jumps to 18.95%.
Deep subprime applicants (FICO scores below 500) saw their average rates increase to 15.43% for new cars and 21.55% for used cars.
| Credit score | Average APR, new car | Average APR, used car |
|---|---|---|
| Deep subprime: 300-500 | 15.43% | 21.55% |
| Subprime: 501-600 | 13% | 18.95% |
| Nonprime: 601-660 | 9.72% | 14.07% |
| Prime: 661-780 | 6.70% | 9.63% |
| Superprime: 781-850 | 5.08% | 7.41% |
The annual percentage rate of a loan changes based on the type of car a buyer wants. A dealer may not be willing to offer a new car to someone with a subprime credit score but can make a deal for an older car with more mileage that’s been sitting on the lot.
What Do Subprime Lenders Look For?
Lenders will want to determine whether you can manage the loan based on how much you make and weigh it against your monthly debt obligations, including credit card debt, a mortgage, or a student loan. Lenders want to see that you can comfortably make payments throughout the loan term without overextending your finances.
Your credit score predicts the likelihood of you defaulting on a loan or credit card payment within the next two years. More subprime borrowers are missing loan payments across the U.S., so subprime lenders must consider other factors when determining whether to offer a preapproved loan.
The ability to repay the loan and having an income that can support repayment of the loan is generally more important than your credit score.
An auto lender will look at your employment history and, most importantly, your income. Your debt-to-income ratio also plays a role in your financing options.
Apply For Subprime Auto Loans Online
Applying for a subprime auto loan is not a scary thing to do. In fact, the ability to buy a car is liberating for most people, giving them the freedom to go wherever they want whenever they want. A subprime lender is more likely to work with buyers who really want a car and are committed to buying one and making the payments.
Cars today are built to last. Most cars built within the past 10 years can go 200,000 miles or more with just regular maintenance. Dealers will cut a good deal for anyone, whether they have a subprime credit score or not, to get a car off their lots.
Getting an affordable car at a reasonable interest rate is possible with some research and just a little shopping around.
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