Tractor & Heavy Equipment Loans For Bad Credit in 2021

Tractor And Heavy Equipment Loans For Bad Credit
GUIDE
Aaron Crowe
By: Aaron Crowe
Posted: August 30, 2021
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Tractor & heavy equipment loans for bad credit can help farmers and users of construction equipment find financing that they may be unable to get elsewhere. A tractor and other types of farm machinery have an economic lifespan of 15 years — which represents the length of time an owner can expect to spend some cash on parts and regular maintenance after he purchases the machinery.

Equipment financing assistance includes personal loans, direct financing from banks, government programs, and heavy equipment dealers. We review 10 options below.

Tractor & Heavy Equipment Personal Loans For Bad Credit

The first six equipment financing options we review are personal loans meant for borrowers who have bad credit scores. They’re lending networks that don’t provide the loan directly to you but gather your information to see whether you prequalify for a loan, and they will connect you with multiple lenders to work out a loan from there.

You can search for a loan term that works best for you. However, you should know going in that these bad credit loans are seen as high risk by lenders, so they often charge higher fees and interest rates to make up for the risk of a low credit score.

Still, you should be approved for a loan if you meet the minimum loan requirements, and you can get the cash in as soon as one business day.

  • Short-term loans up to $5,000
  • Online marketplace of lenders
  • Funds available in as few as 24 hours
  • Simple online form takes less than 5 minutes
  • Trusted by more than 2 million customers
  • Not available in NY or CT
  • Click here for official site, terms, and details.
★★★★★

4.8

Overall Rating

Loan Amount Interest Rate Loan Term Loan Example
Up to $5,000 Varies Varies

See representative example

MoneyMutual is our top-ranked online lending network for many reasons. It’s free to use, offers repayment options to fit every budget, and works to connect every potential customer with a personal loan lender that can often fund their loan within 24 hours.

   
★★★★★

4.7

Overall Rating

Loan Amount Interest Rate Loan Term Loan Example
$500 to $10,000 5.99% – 35.99% 3 to 72 Months

See representative example

As with many lending networks, CashUSA.com has an online application that you can fill out in a few minutes, and you may receive a loan decision in seconds. The lenders it works with may require a credit check, though a bad credit score won’t necessarily disqualify you from an installment loan.

As its name implies, BillsHappen can provide quick loans to pay daily bills. A loan of up to $5,000 can be used as working capital, including to make a down payment on a truck or pay for tractor financing, to keep a farmer going. Borrowers can get an unsecured loan, a secured loan, or a payday loan.

CreditLoan.com helps people with bad credit find a personal loan that meets their circumstances. Borrowers with a high credit score are more likely to be approved and typically get better loan terms, but people with a low credit score can still get a loan. The monthly payment may be higher than they’d like, but they should still be able to qualify for a loan and can start rebuilding their credit by making on-time payments on the loan.

BadCreditLoans.com helps people with bad credit and a low credit score find loans that require a monthly payment for as long as 60 months. Paying a loan on time for five years can improve a credit score, and such a long repayment period can make almost any interest rate more affordable. Be sure to shop around for the best rates and loan terms.

PersonalLoans.com is a lender network that works with lenders providing loans of up to $35,000, which may be enough to meet your farm or construction equipment financing needs.

Direct Tractor & Heavy Equipment Financing

Other heavy equipment financing options are also available, even if you have bad credit. Here are four options when you want to pay for an equipment lease, or you want to buy mowers, farm equipment, a semi truck, a utility vehicle, or a commercial vehicle or commercial truck.

7. SBA Loans

Another financing option is a government-backed SBA loan that can be used for farm equipment financing and other kinds of working capital that small business owners need to keep their business going.

Screenshot of the SBA homepage.
You may qualify for a business loan, even with poor credit, from the SBA.

An SBA loan can come from a bank, credit union, or other financial institution that issues loans. The Small Business Administration guarantees the loans up to a certain amount.

8. Bank of America

Bank of America offers equipment purchase loans that start at $25,000 with fixed rates as low as 3%. This is a business loan secured by assets and can last as long as five years.

Screenshot of the Bank of America Equipment Financing landing page.
Bank of America offers equipment financing starting at $25,000.

Bank of America is one of the largest banks in the country. You may want to first check with the financial institution with which you already have a business account to see what type of equipment financing it can offer. As with any other type of loan, be sure to compare a few banks and other alternative lenders for the best loan terms and interest rates for your heavy equipment loan.

9. USDA Loans

The USDA Farm Service Agency offers loans to farmers and ranchers who run a family farm.

Screenshot of the USDA homepage.
The U.S. Department of Agriculture is another option for cash flow and farming equipment loans.

It has many types of farm loans, including operation loans to buy heavy equipment or to increase cash flow to help you get up and running. A farm equipment loan can be used to buy mowers, tractors, and just about any kind of farming equipment you need.

10. Dealer Financing

Farm equipment financing and equipment leasing can also be done through the seller you’re buying from. The loan is a secured loan backed by the new equipment you’re buying or leasing. Equipment leasing usually provides a buy-out option at the end of the lease.

Deere Financial and other finance companies are owned by parent companies selling the equipment. Deere Financial, for example, is owned by the tractor manufacturer John Deere. Loan rates are often lower than at a bank, though borrowers may need a good credit score to get the lowest rates.

Can I Get a Tractor Loan With Bad Credit?

Yes, tractor financing is available even if you have a low credit score. The lending networks we recommend specialize in helping people with bad credit. They are able to make bad credit business loans for tractors and other heavy equipment financing.

The lenders that these lending networks partner with may not offer loans for the total amount you need to buy a tractor, which can range in price from $25,000 to $50,000, on average. But they should be able to help you find a loan for a down payment.

One lending network, PersonalLoans.com, helps borrowers find loans of up to $35,000, though borrowers with bad credit may pay higher interest rates.

Buying a compact tractor may be easier with a bad credit loan. A compact tractor can cost around $10,000. Two lending networks — CashUSA.com and BadCreditLoans.com — offer loans that large for tractor financing through the lenders they work with.

How Do You Qualify For Equipment Financing?

Equipment financing with bad credit is relatively easy with the online lender-matching services we recommend.

You fill out a free application to prequalify for a loan, which should take only five minutes or less to complete. A hard credit check isn’t usually done, so your credit score won’t be affected.

The general prequalification requirements are:

  • At least 18 years old
  • U.S. citizen or resident
  • Minimum income or benefits of around $800 a month
  • Active bank account or credit union account in your name
  • Provide identification such as a Social Security number, email address, work and home phone numbers, and bank account details

After submitting the form, the service will match you with the direct lender or lenders that are the best fit, and you’ll be transferred to their website to finish the application process. This will likely require giving your permission for the lender to access your credit report from a credit bureau, which will place a hard inquiry on your credit report.

You should get a loan decision within minutes, if not seconds, after your credit report is reviewed. You don’t have to accept the offer, and you should read and understand all of the loan terms and costs before agreeing to it.

What Farm Equipment Can I Use The Loan For?

A traditional bank will likely want to know what you’re using the loan for and will usually require a secured loan for farm equipment or any type of heavy equipment being financed. The equipment is collateral for the loan, and the lender can repossess it if you fail to repay the loan.

The lending networks we reviewed usually work with lenders that provide unsecured personal loans. No collateral is needed for a loan, and it’s unlikely that a loan specialist will ask what the money is being used for.

This means the money can be used for just about anything you need, including to buy or lease new equipment.

Can I Use the Money to Buy a Truck?

A business equipment loan can help you get the truck you need to run your business. But you’ll likely find a better interest rate and loan term from an auto dealer, even if you have bad credit. Truck loans are usually less expensive to finance than are personal loans.

A personal loan can be used to finance a vehicle, but you’re likely to get better terms from an auto lender. And other companies specialize in semi truck financing with better loan terms.

A commercial truck loan or another type of business loan can help you secure semi truck financing if you need a semi truck to run your business. These types of loans are for much larger amounts of money, considering the average used semi truck costs more than $100,000.

Traditional truck financing from an auto lender is likely your best financing option if you don’t need a large commercial truck.

How Long Are the Financing Terms?

Financing terms through lending networks vary by company but generally last from three months to 72 months.

Having six years to pay off a loan can make it more affordable with low monthly payments. But a longer loan term also means paying more interest, so compare it to a shorter loan to see how much money you can save and whether the monthly payments are still affordable.

Also, ask if there are prepayment penalties for paying off the loan early. You may discover a year or so before your loan is paid off that you have extra money to pay it off early, which can help you avoid paying more in interest. Prepayment penalties can negate that advantage.

Your Best Options for Tractor & Heavy Equipment Loans For Bad Credit

Tractor & heavy equipment loans for bad credit can help business owners, including farmers, buy or lease heavy equipment they need for the day-to-day operation of their business. Even with bad credit, they can qualify for affordable personal loans that don’t require a credit check.

Compare the interest rates, fees, and loan terms so you can find the best loan that fits your budget. Your credit score should improve by paying this loan on time and in full. In time, that should allow you to get a loan without paying high rates that often come with bad credit loans.

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