Looking for a bad credit car loan? Getting approved for a conventional auto loan can be tough if you have bad credit. You’ve probably applied to dozens of auto financing lenders and still get denied. It downright stinks when you need reliable transportation, yet you keep being disapproved. If only you could find a bad credit lender that would approve you for that new set of wheels. We did the research and found a list of bad credit auto lenders that have a good chance of approving you for that car loan. Keep this in mind, however: you may not get the best rates, compared to a traditional auto loan. Meaning, you’ll likely pay higher interest fees over a longer period of time.
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That said, you should compare the rates of bad credit car lenders below to get the best rates and terms. Remember, just because you may have a poor credit score does not mean you can’t find a lender. It’s simply a matter of:
- Finding a lender that works with borrowers that have credit issues
- Comparing rates and terms from different lenders to find the lowest cost
- Finding a vehicle within your price range and budget
- Negotiating rates and terms with your chosen lender
Tip: Make sure the vehicle you choose is reliable and not a “lemon”. Bad credit car dealerships often find cheap cars from auctions and do the bare minimum car repair to sell them fast. Bring someone knowledgable about car repair with you to inspect the vehicle before committing to a purchase. From there, you’re just one step closer to driving off the lot with your new vehicle.
Before you start comparing rates and terms for your new ride, you’ll need to make sure you have a few things ready for the pre-approval process:
- Valid Driver’s License
- Verification of Employment
- Last 4 Paycheck Stubs (it’s typically 2, but if you can provide 4, that’s even better)
- Proof of Car Insurance
- A Minimum 20% Down Payment (in most cases)
Pros of a Bad Credit Car Loan
- Good option for borrowers that have poor credit
- Helps you rebuild credit, provided you make on-time payments
- Fast lender approval
- Helps you get a vehicle when traditional financing fails
Cons of a Bad Credit Car Loan
- Typically has high interest rates compared to traditional financing
- Risk of vehicle repossession if you fail to keep up with payments
- Can further hurt your credit history if you fail to keep up with payments
- Has a longer financing period, sometimes up to 72 months
