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If you need a new set of wheels but your credit isn’t great, you may be able to get auto financing from a lender that specifically markets to people with credit problems.But auto loans for bad credit often come with higher interest rates, so it’s especially important to shop around and compare loan offers. We’ve rounded up some options to consider.
Good for people who have filed for bankruptcy: Prestige FinancialWhy Prestige Financial stands out: Bankruptcies have a significant negative impact on your credit scores, which may affect your ability to qualify for an auto loan. But Prestige Financial considers applications from people who have filed for bankruptcy. Just keep in mind that if you filed for Chapter 7 bankruptcy, your bankruptcy documents must be available for review on the court website. And if you filed for Chapter 13 bankruptcy, your repayment plan must be approved for your application to be considered. Here are some more details on Prestige Financial auto loans.
Read our full Prestige Financial auto loans review. Good for a range of refinance options: AutopayWhy Autopay stands out: Autopay offers a wide range of auto loans, including loans for new and used cars purchased from a dealer, private party loans and multiple refinancing options, including traditional, cash back and lease buyout refinancing. Here’s some more info about Autopay auto loans.
Read our full Autopay auto loan review. Good for interest rate discounts: New RoadsWhy New Roads stands out: It can be tough to qualify for low rates when you have poor credit. New Roads, the direct lending division of Consumer Portfolio Services Inc., offers interest rate discounts on certain certified pre-owned and new-car models that can reduce interest charges. Here’s some more info about New Roads auto loans.
Read our full New Roads auto loan review. Why Carvana stands out: Known for its network of vending machines where car buyers can pick up their vehicles, Carvana offers the opportunity to shop for financing and a car in one place. Here are some more details about Carvana.
Read our full Carvana financing review. Good for prequalification: Capital One Auto FinanceWhy Capital One Auto Finance stands out: Some lenders don’t offer the ability to prequalify for an auto loan without generating a hard credit inquiry, which can affect your credit scores. But when you apply for prequalification with Capital One Auto Finance, you can check your estimated loan rate and term (assuming you get a prequalification offer) without affecting your scores. You’ll have to submit a full application to see if you’re approved and get your final loan terms. Here’s some more info about Capital One Auto Finance.
Read our full Capital One Auto Finance review. Good for people who are unemployed: Credit Acceptance Corp.Why Credit Acceptance Corp. stands out: Credit Acceptance Corp. specializes in providing auto loans to people who have experienced financial challenges, including those who are receiving unemployment income. Here are some additional details about Credit Acceptance Corp. loans.
Read our full Credit Acceptance Corp auto loans review. Why MyAutoLoan stands out: Comparing auto loan offers from multiple lenders helps ensure you get the lowest rate possible. MyAutoLoan is an online marketplace that matches people looking for auto financing with lenders in its network that meet their needs. You can receive up to four loan offers in just a few minutes. Here are a few more things to know about MyAutoLoan.
Read our MyAutoLoan car loan review. How we picked these lendersWe selected lenders for this roundup based on factors that could be helpful for people with bad credit. Here are some of the factors we considered.
What to consider with bad credit auto loansSince people with lower credit scores typically pay higher interest rates, shopping around to find the best deal before you get a new loan is especially important. If it’s possible to postpone your purchase while you build your credit, you may be able to qualify for a lower rate in the future. But if you really need to buy a car now, there are steps you can take to help increase your odds of approval and lower your cost of financing. If you’re approved for a loan, making your payments on time and reducing your debt can help you establish a positive payment history and improve your credit over time. As you build your credit, you may eventually be able to refinance your auto loan at a lower interest rate. About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more. |