Adam was written, edited, and managed content for news outlets and digital publications for nearly 20 years. Since specializing in finance in late 2016, his editorial focus has been on consumer financial literacy. Adam is most knowledgeable in the areas of credit scores, financial products and services, and the banking industry.
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Subprime auto lenders help those with a poor credit score secure financing to purchase new or used vehicles, including cars, trucks, SUVs, motorcycles, and RVs. The bad credit auto loans we feature offer online approval, reasonable down payments, and the opportunity to build credit your history. Here are 2025's best auto loans for bad credit, according to our experts:
Disclosure: When you apply through links on our site, we often earn referral fees from partners. For more info, see our ad disclosure and review policy.
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
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Review Breakdown: Bad Credit Auto Loans
Need a car or truck loan but lack the credit history most lenders prefer? Below is a summary of the top auto loan providers for people with a poor credit score. To apply for auto financing online, simply click on the name of the service provider to visit its easy online application. These loan services provide quick approval and specialize in helping those with poor credit.
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
“The ratings for the auto loan providers we recommend are calculated by financial experts using data points that include:
Interest Rates
Fees
Approval Rates
Credit Bureau Reporting
Lender Reputation
And other key considerations important to borrowers with poor credit. Our ratings are not influenced by lenders and are updated as changes occur. The rating scale ranges from 1.0 to 5.0, where 5.0 represents the highest possible score and our expert’s top recommendation.”
Whether it’s a new car or just new to you, buying a car can sometimes be a major hassle. That hassle level ratchets up a few more notches when you have a poor credit score.
Reduce the hassle with a little expert insight into how borrowers with bad credit can still qualify for auto financing.
1. Can I Get an Auto Loan With Bad Credit?
Yes. Many lenders are willing to extend auto loan offers to borrowers who have bad credit scores.
This is partly because, unlike most personal loans, an auto loan is secured. This means that the vehicle you purchase is also used as collateral to secure your loan. If you stop making payments or default on the loan altogether, the lender can repossess the vehicle and sell it to recoup some of its losses.
Because lenders can offset some risk, they may be more willing to consider applications from borrowers with credit issues.
But keep in mind that there are different levels of bad credit. Your FICO credit score can range between 300 and 850. Any FICO score below 580 is generally considered a bad credit score (FICO calls it poor credit). Here is a look at FICO’s credit score tiers:
Lenders who specialize in auto loans for bad credit borrowers, often called subprime auto lenders, may consider your application if you have a credit score in the 500s. At 500 or below, your options may dwindle.
2. Can I Get Approved for a Car Loan With a 500 Credit Score?
If your credit score falls at or below 500, you may struggle to find any lender willing to work with you. And if a lender does approve financing, your interest rates will likely be sky-high. But you can improve your odds, and possibly improve your rates and terms, by:
Adding a trade-in vehicle: The inclusion of a trade-in can lower the loan amount and increase your stake in the purchase. That means you’ll have to borrow less and have more invested in the loan.
Making a down payment: Auto lenders don’t like to be the only ones taking on risk. When you include a down payment, you show that you have skin in the game and are serious about handling your debt.
Enlisting the help of a cosigner: A cosigner is someone who is willing to sign for your loan to guarantee that you will repay the debt — typically someone with much better credit. Just be sure to stay on top of your loan payments because a late payment or default will hurt your and the cosigner’s credit scores, which could also fracture friendships and family ties.
You may also find yourself struggling to find a loan if you have no credit history — which means you haven’t had enough information reported to the credit bureaus to generate a credit rating or score. You may not have financial mistakes on your credit reports, but you don’t have a past that a lender can view.
Most banks, credit unions, and independent lenders will view loans to those with no credit history as high-risk. After all, you can’t know what you can’t see. As a result, those who have no credit are often offered the same terms as applicants who have poor credit.
You may need as many as six months with a positive payment history to generate a credit score, but it could be worth the wait as you could see much better terms over the life of an auto loan.
3. Which Banks Offer Auto Loans For Bad Credit?
Most traditional banks will not consider car loan applications from consumers who have bad credit.
The largest banks in America are all publicly traded companies that have boards of directors that expect to earn profits every quarter. To make sure that each bank remains profitable, the financial institution will limit its exposure to risk.
That means denying loan applications from bad credit applicants.
A credit union, on the other hand, is a member-owned institution that returns all of its profits back to its members. While this means more affordable financial products and more lenient loan approvals, it doesn’t mean someone who has bad credit is guaranteed a loan.
Here are some of the primary differences between banks and credit unions:
Banks
Credit Unions
For-profit institutions owned by shareholders
Not-for-profit institutions owned by members
Anyone can open an account
Only members can open an account
Typically higher fees and interest rates
Typically lower fees and interest rates
May be located nationwide, with branches in most cities
Often local with branches in certain communities or regions
Deposit insurance provided by the FDIC (Up to $250,000)
Deposit insurance provided by the NCUA (Up to $250,000)
Expect a modern website and responsive mobile app
Technology may be available but not as advanced
Most credit unions limit their loans to members who have fair credit or better. That means a FICO score of 580 or higher. But that doesn’t mean you’re out of luck — many independent lenders consider financing applicants who have bad credit.
4. What Interest Rate Will I Pay for a Bad Credit Auto Loan?
Bad credit borrowers will pay the highest interest rates for auto loans, but the actual rate depends on market conditions and other economic factors.
Your credit score plays a significant role when auto lenders set out to determine your interest rate because it clearly highlights your risk as a borrower. Finance options for poor-credit consumers can climb to higher than 21% for used car loans.
That’s nearly four times greater than the lowest average interest rates offered to borrowers purchasing new cars with excellent (or superprime) credit. Here is a look at the average auto loan interest rates by credit score:
Over the course of an auto loan, these interest rates can mean paying thousands of extra dollars because you have bad credit. How much you ultimately pay also depends on your loan term — or the length of the loan.
Because bad credit borrowers pay such high interest rates, many choose longer loan terms to keep their monthly payments affordable. But this also costs much more money in the long run — as we will discuss later.
5. Can I Buy a New Car With Bad Credit?
You may still qualify for a loan to purchase a new car if you have bad credit, but it could hinge on other factors, including down payment, trade-in value, your income, and whether you have a cosigner.
If you have a very low credit score, such as below 500, you will have trouble finding a loan without a large down payment or a cosigner. A score above 550 could give you a better chance of qualifying for a new car loan, but new car loans for bad credit borrowers have plenty of hurdles.
In either scenario, you will still likely need to include a substantial down payment or a trade-in to lower your overall loan amount. Few lenders, if any, will lend 100% of a new vehicle’s price to someone who has bad credit.
Let’s take a look at those Experian numbers again, but this time we’ll focus on just new car loans. We’ll also add in averages for the loan amount, loan term, and monthly payment:
Category
Credit Score Range
Loan Amount
Loan Term
APR
Monthly Payment
Superprime
781 – 850
$39,172
64 months
5.25%
$717
Prime
661 – 780
$42,993
71 months
6.87%
$742
Near prime
601 – 660
$42,467
74 months
9.83%
$765
Subprime
501 – 600
$38,045
73 months
13.18%
$749
Deep subprime
300 – 500
$33,917
72 months
15.77%
$719
As you can see, the average new car loan amount for a bad-credit borrower is around $34,000. When financed at the average 15.77% APR on a 72-month loan term, it results in a monthly payment of $719. The average borrower with superprime credit receives about $39,000 at a 5.35% APR on a 64-month loan term and pays $2 less per month.
In addition to a lower loan amount, bad credit borrowers who purchase new cars pay a premium in interest for the risk they pose to lenders and often need a longer loan term to make their monthly payment work.
These numbers add up to the average new car loan ($33,917) costing a bad credit borrower $51,768 over six years — assuming no additional fees for missed or late payments.
Compare that to the average new car loan for a superprime borrower ($39,172), which would cost $45,888 during a term that is just over five years. That means a new car auto loan costs a bad credit borrower $17,851 in total interest, while a superprime borrower would only pay $6,716.
6. Is it Better to Finance a Car With a Dealer?
Dealer financing can be convenient for borrowers with bad credit, but that convenience can come at a cost. Dealers typically work with a handful of lenders that may not specialize in subprime offerings, meaning you will likely pay a much higher interest rate.
Dealers could also add points to your APR as compensation for their role in connecting you with financing. Loan offers from dealerships will likely only apply to that dealership or a chain of dealerships.
Dealerships can be appealing to bad credit borrowers because of their convenience, but you may pay for that convenience in the form of higher interest rates and longer loan terms.
Some dealerships also offer in-house financing, meaning they approve your loan and accept your payments directly. These are known as buy here, pay here (BHPH) dealerships, and they specialize in auto loans for people who have bad credit.
BHPH loans have high interest rates and are usually much more aggressive in repossessing vehicles if you miss payments.
7. Can I Refinance My Car Loan If I Have Bad Credit?
Yes. You can refinance an existing auto loan even if you have a bad credit score. Most of the online lending networks above consider applications for new and used car purchases, lease buyouts, and refinance loans.
An ideal auto refinance loan would include a lower interest rate and the same (or even a shorter) term. Those types of loans are often reserved for borrowers who have better credit — or who have improved their credit while paying off the loan.
Borrowers who have bad credit may not qualify for loans like this, but could still refinance to get a little breathing room each month. You could qualify for a refinancing offer that lowers your monthly payment in exchange for adding time to the loan.
Here are some scenarios when refinancing might help, and others when refinancing probably isn’t the best option:
Refinancing May Be Beneficial If …
Refinancing May Not Be Ideal If …
You have improved your credit score
You owe more than your car is worth
You are having trouble making monthly payments
Your current loan has a prepayment penalty
Auto loan interest rates have dropped
Your credit score hasn’t improved
You have issues with your current lender
Your car is older
Adding time to the loan could also qualify you for a lower interest rate, but that reduction could be minimal or non-existent if you have bad credit. While a longer term may help you out with your monthly budget, it will cost you more over the life of the loan. That means you actually lose money by refinancing your loan in the long run.
You can consider this tactic if you simply cannot afford your monthly payment. While you may end up paying more in the end, it would be better than missing payments or defaulting on the loan altogether.
If you still have bad credit, but your score has improved since your original financing, you should also try to secure a lower interest rate. If your credit score has dropped, the new rate could be higher, costing you even more over the new term.
About The Author
Adam WestContributing Editor
Adam West is a finance editor for BadCredit.org, where he has interviewed over 500 financial experts and industry movers and shakers to report the latest information, news, and advice on topics related to helping subprime borrowers achieve greater financial literacy and improved credit scores. Adam has more than a dozen years of editing, writing, and graphic design experience for award-winning print and online publications, and specializes in the areas of credit scores, subprime financial products and services, and financial education.
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* FICO scores/credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.