An imperfect credit score can be a barrier to getting smart terms on auto loans. Fortunately, even if your credit history has some imperfections (think scores below 670), you still have plenty of auto loan features from credit unions and other monetary institutions. And comparing those characteristics is getting the most productive deal possible.
CNBC selects more than a dozen auto lenders based on the types of loans they offer, affordability, credit requirements, and the buying experience they offer. Here are our top picks for auto lenders that serve consumers with bad or fair credit. (Read more) about our method below. )
From 5. 49%
New vehicles, used vehicles, refinances, parties, and lease acquisitions.
From $8,000 (or $5,000 for refinancing)
24 to months
FICO of 575 or higher
None
Varies by lender
Conditions apply.
Who is it for? MyAutoloan is a great option if you have bad credit and need to shop around for the lowest rate imaginable. This online marketplace connects car buyers and lenders based on their desires and the information they provide.
Exceptional Benefits: MyAutoloan does the heavy lifting for you and will provide you with up to 4 pre-qualified loan offers when you fill out a short form. It uses a convenient credit check to connect you with lenders, so comparing offers may have no effect on your credit score—get a full application only if you ask for an offer.
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From 6. 85%
Used Vehicles
not specified
36 to months
not specified
None
$5 after a one-day grace period
Conditions apply.
Who is it for? Carvana can be a smart choice if you’re buying a used car and want your car-buying experience to happen entirely online.
Big perks: Carvana will allow you to get pre-qualified in two minutes without affecting your credit score, the cars come with a 7-day money-back guarantee, and the car is delivered right to your door.
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It depends on the profile
New vehicles, used vehicles, refinancing.
From $4,000
36 to months
Unspecified
None
It’s at the lender
Conditions apply.
For whom ? Capital One Auto Finance is an option if you have bad credit and prefer to get an auto loan from a national bank to take advantage of competitive rates.
Big Benefits: Capital One’s Auto Navigator tool lets you pre-qualify for offers without impacting your credit score and adjust terms to your needs.
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Not disclosed
Used Vehicles
From $500
36 months
Unspecified
None
Varies by state and contract.
Conditions apply.
For whom ? CarMax Auto Finance is worth considering if you’re buying a used car and need a large inventory.
Great Benefits: CarMax allows you to adjust your desired monthly payment and APR to get custom terms for your pre-qualified offers in minutes. It also allows you to upgrade your financing at no cost if you find a higher APR within 3 business days of your purchase.
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From 4. 67%
New and used vehicles, loan refinancing, acquisitions.
$2,500 to $100,000
24 to months
Unspecified
None
Varies by lender
Conditions apply.
Who is it for? Autopay can be a great option for car owners with imperfect credits who want to refinance their vehicle.
Notable Benefits: While you can still finance a new or used vehicle through Autopay, it stands out for its abundance of refinancing options, including classic and cash-back financing, as well as lease financing.
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MyAutoloan works with a few lenders that specialize in working with consumers experiencing credit problems. It offers other types of loans, including new and used auto loans, refinancing, and lease buybacks. MyAutoloan will also settle with co-signers.
The procedure is quick and convenient, just fill out a quick and confidential form. You will then receive up to four pre-qualified offers so you can decide. Prequalification doesn’t affect your credit score, but the lender you decide to approve with will conduct a thorough credit investigation once you apply.
Purpose of the loan
New vehicles, used vehicles, refinances, parties, and lease acquisitions.
Are co-borrowers allowed?
yesterday
Credit Score Requirements
575
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Known for its vehicle vending machines, Carvana makes auto loans on its inventory and works with consumers of all types of credit and accepts collateral. As with the other lenders on this list, you can prequalify for a thorough credit check to get estimated financing terms.
Once you’re pre-qualified, you’ll see traditional situations under the symbol of every car you see on the Carvana website. After you purchase a vehicle and schedule pickup or delivery, Carvana will perform a thorough credit check and provide you with the finalized form. terms of your loan.
Purpose of the loan
Only used cars
Are co-borrowers allowed?
Yes
Credit Score Requirements
Carvana requires a minimum credit score, but some of its lenders may
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With Capital One Auto Finance, you can search for a new or used car with the bank’s online Auto Navigator tool. While you can only choose from one of the attractive car dealerships, according to Capital One, it currently works with more than 12,000 dealerships.
Capital One allows you to prequalify without a strict credit check, so you may not receive a thorough investigation until you’ve fully submitted your application. You can also add a co-applicant to help you get approved and get more favorable terms. Once pre-qualified, you’ll be able to see expected rates and monthly bills for available cars.
Purpose of the loan
New vehicles, used vehicles, refinancing.
Are co-borrowers allowed?
Yes
Credit Score Requirements
No ads
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As the largest used car store in the United States, CarMax Auto Finance also provides financing for the cars it sells. There is no minimum score requirement because CarMax’s wide diversity of financial resources allows them to work with consumers with other credit profiles.
You can use the retailer’s prequalification tool to get custom terms, such as APRs and monthly payments, without affecting your credit. CarMax will offer a 3-day repayment schedule if you find a larger loan, it will offer it within 3 days of the completion of your CarMax loan.
Purpose of the loan
Only used cars
Are co-borrowers allowed?
yesterday
Credit Score Requirements
Unannounced, even so the concessionaire affirms that its financing resources are for maximum credit profiles.
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Autopay is an online platform in partnership with monetary institutions that provide auto loans, allowing the company to interact with consumers in a variety of credit situations. In addition to new and used car loans, Autopay offers a variety of refinancing products, adding classic and cash-back refinances. and refinancing with lease buyback.
All you need is a convenient credit application to prequalify and you can add a co-applicant. Once pre-qualified, you can compare offers from various banks and credit unions to determine the most productive offer. If you want to move forward, the lender will perform a thorough check on your credit and review your documents for final approval, which can take up to two days.
Purpose of the loan
New and used vehicles, loan refinancing, lease purchase.
Are co-borrowers allowed?
yesterday
Credit Score Requirements
Unannounced, the dealership says it has worked with borrowers of all credit profiles.
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A car loan with bad credit is a car loan with a lower credit score. Although there is no precise figure, those with a score below 580 would likely have a harder time obtaining financing through classic loans from banks or credit unions.
In fact, it’s imaginable to get a car loan with a score of 500 credits, even though it’s considered a bad score. Your best bet would be to work with a lender known for making loans to others with poor credit histories. Since having a 500 credit score poses a significant threat to the lender, the lender will most likely give you a higher interest rate for the loan than if you had a higher score. If possible, improve your credits before applying for a loan to get better terms.
Typically, the number one scoring models used for auto loan approval are Vantage Scores 3. 0 and 4. 0, FICO® Auto Score, and FICO® Scores 8 and 9.
Although individual interest rates for auto loans vary depending on several factors, according to Experian’s Q4 2023 State of the Auto Finance Market data, the average new auto loan rate for the highest-risk borrowers (scores from three hundred to 500) is 14. 78%. and 12. 28% for subprime auto loans. borrowers (501 to 600). Interest rates are even less favorable for used vehicles, reaching 21. 55% for the most threatened borrowers.
Related: Tips to Quickly Boost Your Credit Score
There are several tactics to increase your chances of getting approved for a car loan. Here are some of the keys:
Before applying for an auto loan, it’s essential to estimate your monthly payments. CNBC Make It offers a convenient loan calculator that can help you see how much you pay per month, how long it will take to pay off the debt, and how much you pay in interest.
If your credit is poor, getting approved for a car loan without a collateral may be more difficult, but it’s still possible. Some lenders work with consumers of all credit profiles. That said, you’re more likely to qualify for a loan. with a high interest rate, making it expensive to buy your car. Be sure to shop around and get loan offers so you can compare terms and choose the option that best fits your budget.
An express minimum credit score is not required to finance a vehicle. Credit needs vary by lender, as the lender has its own policies on how it evaluates loan applications.
In addition, while your credits may be important, lenders also look at other monetary factors, such as your source of income and other debts. The more signs they find that you’re more likely to repay the loan on time and in full, the better your chances of being approved.
Financing a car through a bank or credit union can help you get a lower interest rate, especially if you already have a positive relationship with the institution; For example, you have a credit car that you pay on time.
On the other hand, it would possibly be more complicated to obtain bank financing if your credit is imperfect. In addition, distributors can offer a more convenient experience. Although it may take some time for the bank to review your application, you can stop at a dealership and get your new car out of the dealership the same day.
October through December are generally the most productive months to buy a car, as you’re most likely to find discounted deals at the end of the year. Plus, the December Christmas sales will offer the opportunity to save even more.
While it is possible to get an auto loan with a credit score of 500, it will be more difficult to find a lender and the loan terms will likely be less favorable.
Although it depends on the individual, myAutoloan works with lenders who specialize in working with consumers facing credit problems.
It’s possible to get a car loan with a credit score of six hundred, but you may have stricter loan terms than with a higher score.
At CNBC Select, our goal is to provide our readers with high-quality journalism and comprehensive customer recommendations so they can make informed decisions with their money. Each auto loan listing is based on rigorous reports written by our team of trained and highly experienced writers. Loan product wisdom. While CNBC Select obtains a commitment from our partner partners on many offers and links, we create all of our content without the involvement of our sales team or external third parties, and we are proud of our journalistic standards and Ethics. Check out our method to learn more about how we select the most productive car loans for bad credit.
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To learn which auto loans are most productive for consumers with bad credit, CNBC Select analyzed more than a dozen auto loan providers, adding banks, dealerships, and online marketplaces.
When limiting and qualifying auto loans, we focus on the following characteristics:
Advertised rates and payment structures for auto loans are subject to change based on the Federal Reserve rate. However, once you accept your loan agreement, a constant APR will ensure that your interest rate and monthly payment remain constant for the life of the loan. Your APR, your monthly payment and the amount of your loan depend on your credit history and your solvency. To get a loan, many lenders will run a thorough credit check and ask for a full application, which may require only evidence of income, identity verification, evidence of driving, and more.
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