4 Best Bad Credit Car Loans in 2021

In 2020 owning a car is not a luxury but a necessity. A personal vehicle is used for grocery runs, work commute, and other forms of personal travel. Financing the purchase of a car is not a simple thing. After all, it’s a major purchase whose value goes in the range of thousands of dollars.

Car loans are usually the best option for funding a car purchase but for those with bad credit scores, things are a bit more difficult. In this case, we’re talking about the best bad credit car loans.

Here’s what you should know about them.

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Top 4 Bad Credit Car Loans in 2021

1. myAutoloan

Platforms like myAutoloan are a textbook example of an auto loan for bad credit with instant approval. Generally speaking, it’s ideal for those looking for an industry-standard to figure out reference values. Full Review

  • APR: 1.79%-27%
  • Loan Amount: $8,000-$100,000
  • Loan Term: 2-7 years

Platforms like myAutoloan are a textbook example of an auto loan for bad credit with instant approval. Generally speaking, it’s ideal for those looking for an industry-standard to figure out reference values. Full Review

2. Auto Credit Express

People turn to Auto Credit Express because they’re looking for decent terms for poor credit auto loans. This incredible online lending platform provides a quick application form that can take as little as three minutes to complete. Full Review

  • APR: 3.99%-29.99%
  • Loan Amount: from $5,000
  • Loan Term: 3-6 years

People turn to Auto Credit Express because they’re looking for decent terms for poor credit auto loans. This incredible online lending platform provides a quick application form that can take as little as three minutes to complete. Full Review

3. Car.Loan.com

When looking for low interest car loans for bad credit, there’s really no better place to go than Car.Loan.com. Sure, having a score of over 620 can greatly help one’s case, but Car.Loan.com can match borrowers with a score that is even below 500 with a suitable lender. Full Review

  • APR: 0%-25%
  • Loan Amount: $7,500-$45,000
  • Loan Term: 3-6 years

When looking for low interest car loans for bad credit, there’s really no better place to go than Car.Loan.com. Sure, having a score of over 620 can greatly help one’s case, but Car.Loan.com can match borrowers with a score that is even below 500 with a suitable lender. Full Review

4. CarsDirect

CarsDirect is a platform that allows its users an unprecedented level of information regarding both the cars and the loans. Its new car loans for bad credit are great and its used car loans are not that far behind. Full Review

  • APR: 3%-12.90%
  • Loan Amount: $5,000 - not disclosed
  • Loan Term: 2-6 years

CarsDirect is a platform that allows its users an unprecedented level of information regarding both the cars and the loans. Its new car loans for bad credit are great and its used car loans are not that far behind. Full Review

The Best Bad Credit Auto Loans in 2021

myAutoloan Best for refinancing an auto loan
Auto Credit Express Best for bad credit and bankruptcy auto loans
Car.Loan.com Best for first-time and subprime car buyers
CarsDirect Best for refinancing and bad credit loans

 

Detailed Reviews

myAutoloan
myAutoloan

BEST FOR

refinancing an auto loan

Visit Website
  • APR: 1.79%-27%
  • Loan Amount: $8,000-$100,000
  • Minimum Credit Score: 575
  • Loan Term: 2-7 years
  • Origination Fee: Varies by lender
  • Funding time: 24 hours after acceptance
  • Credit Check: Soft credit pull for pre-qualification

Platforms like myAutoloan are works of art, technological, and financial services designed with customer friendliness in mind. This lending platform is considered the flagship of the best bad credit auto loans and the industry reference point. This means that myAutoloan usually serves as the first stop for anyone looking for a car loan online. This is where they start their journey and they use the loan terms they encounter here in order to compare and assess other lenders.

The main reason for this is myAutoloan’s dominance amongst auto loans for bad credit. When it comes to loan applications, new and used car purchases are the most popular choices; however, they’re just the tip of the iceberg. It’s also possible to refinance an existing car loan. On some occasions, there are also private parties and lease buyouts to take into consideration.

Loan requirements

The minimum credit score requirement for myAutoloan is at a low 575, making this company your go-to place if you are looking for the best auto loan for bad credit.

The process itself is fairly simple. It starts with an online application and the request for some basic personal information. Like with any other loan, we’re talking about the applicant’s social security number and their source of income. From this point on, the platform matches the applicant with a potential lender that meets the borrower’s profile. The reliability of this platform when it comes to the matchmaking process is what helps users access some of the best auto loans out there.

Loan Terms

APR: The APR can be as low as 1.79% or as high as 27%, which means that the potential borrower has a chance to return very little over the borrowed amount. This is, however, contingent on their profile falling within the average to the favorable range. Still, even the bad credit auto loans on this platform aren’t that bad.

Loan Amount: The loan amount ranges from $8,000 to $100,000. This covers a lot of vehicle types. With such a maximum amount, one could even afford to purchase a truly outstanding vehicle for business purposes.

Loan Term Length: The loan term is between two and seven years. Since this is one of the largest personal investments that most people are likely to make, longer terms are generally better.

Origination Fee: The lenders charge between 1% and 5%. For some people, avoiding the origination fee altogether is imperative, but as far as these rates go, anything under 5% is fairly reasonable. Considering how favorable other bad credit auto loan terms are, it’s a decent deal on the whole.

Funding Time: The vetting process may take a while, even if the application process is quite fast and simple. Still, from the moment that an applicant gets approved, the money will be deposited in a matter of one business day. This is great for time-sensitive car deals.

Credit Check: The credit check here follows the standard bad credit loans formula. First, you have the tool with a soft credit pull in order to see where you stand. Later, the platform uses a hard credit inquiry in order to assess the borrower’s profile adequately.

Repayment: While there is an origination fee and there are some active late payment fees, there’s no such thing as the early repayment fee. This is a huge factor for those who hope to pay the loan back before the end of the term.

What We Liked and Didn’t Like About myAutoloan

Calling myAutoloan the best bad credit car loans platform may be an overstatement, but it’s not far from the truth. The APR is quite competitive and, for those with average credit, the terms can be favorable.

Second, the loan application process is convenient and simple to follow. For those looking for lending platforms that will match them with an ideal lender for their profile, there’s really no simpler way.

Most importantly, there are multiple loan options, which greatly increases the versatility of this lending option. While many people are looking for the best auto loan, the vast majority of these lenders have a reason to doubt their own credit score. Therefore, more options give them more maneuvering space.

As for the downsides of this method, there are several things worth keeping in mind, as well. First of all, the minimum lendable amount is $8,000. Some people willing to buy a used car are looking for much cheaper vehicles. Having to borrow so much might not be worth it, even if the terms are highly favorable.

There are also some restrictions on vehicle type, vehicle mileage, and so on. While this is nothing unusual for poor credit car loans, it is restrictive, and not everyone is comfortable with that.

Auto Credit Express
Auto Credit Express

BEST FOR

bad credit and bankruptcy auto loans

Visit Website
  • APR: 3.99%-29.99%
  • Loan Amount: $5,000 - Maximum not disclosed
  • Minimum Credit Score: Not disclosed
  • Loan Term: 3-6 years
  • Origination Fee: Varies by lender
  • Funding Time: A few days
  • Credit Check: Soft credit check for re-qualification

Auto Credit Express doesn’t insist on the credit score, making it quite versatile and useful for people in a dire financial situation. All things considered, even the worst of its APR is quite reasonable when compared to some other loans. Its minimum lending amount is substantially lower than the industry average, which makes it quite suitable for people looking for budget vehicles. While Auto Credit Express doesn’t charge any origination fee, actual lenders might, especially to borrowers with poor credit. It’s still a pretty good deal as it’s practically impossible to get car loans with bad credit and no money down.

Other than being ideal for those in financial trouble, Auto Credit Express offers some great terms for military financing. Due to the fact that the US has a lot of active duty or former military personnel looking to acquire a vehicle and build up their credit score, this lender may prove to be indispensable.

Loan requirements

One thing that separates Auto Credit Express from all the other major contenders for the best bad credit car loans is the fact that there’s no explicit credit score requirement.

Instead, the borrower needs to prove that they can make at very least $1,500 per month. Other than this, they need to be able to have at least three years of work experience. While this may restrict some of the youngest potential borrowers, the restriction is still less severe than asking for three years of credit history. As far as best car loans for bad credit go, this one gives quite lenient requirements. Other than this, the applicant needs to be a resident of Canada or the US, and they have to be at least 18 years old.

Loan terms

APR: Even though the platform doesn’t insist on the minimum credit score, the terms may differ greatly based on it. There’s the fact that the average APR for this lending platform is between 3.99% and 29.99%. While it may seem high, even the top margin is decent for no credit history or bad credit car loans.

Loan Amount: The minimum loan amount is $5,000, while the maximum generally varies by lender. The fact that the minimum amount is somewhat lower can be a huge advantage for those who plan to buy a frugal, used car for their personal use.

Loan Term Length: While the terms may vary, the average Auto Express Car loan term is between three and six years. Nonetheless, if the conditions are non-traditional, like with rent-to-own terms, we could be looking at the term between one and three years.

Origination Fee: The origination fee depends on the credit score of the borrower and the lender they choose to do business with. Auto Credit Express doesn’t disclose it on their site, but they usually range from 0.5% to 5%. Fortunately, even with a bad credit rating, the fee won’t be too bad if you’re buying a cheaper car, which makes it one of the best bad credit car loans.

Funding Time: After the application is approved, the money will be deposited in a few business days. The application itself lasts about three minutes, and you won’t have to wait too long for the whole process to be completed.

Credit Check: There is a soft credit inquiry during the pre-qualification process, and a hard credit pull during the assessment of the application. While the platform doesn’t insist on the credit score, it needs this information in order to pair the borrower with a suitable lender.

Repayment: A decent customer service and the fact that there’s an option to use autopay can make this option into the best auto loan for bad credit.

What We Liked and Didn’t Like About Auto Credit Express

The first, most obvious advantage of this lending platform is that it has no minimum credit requirement. This is unique even amongst online auto loans options. As long as the applicant is a resident of the US or Canada, over 18, and can prove that they have an income of over $1,500 per month, the application shouldn’t face any problems.

Bankruptcy is something that has befallen even some of the world’s greatest businessmen in the past. This particular platform wouldn’t lock you out of a potential loan even if you declared bankruptcy yourself.

The application process is incredibly simple, and it may take about three minutes to complete, which may be important to first-time borrowers who aren’t sure how the whole process works.

As far as the problems go, while it is true that Auto Credit Express offers low credit auto loans, it might not always be worth one’s time to go with this particular lending platform. Poor credit will always ensure poor APR, which will result in the borrower paying back a lot of interest money.

Lastly, the employment requirement can be quite an inconvenience. Sure, the income requirement of $1,500 per month is not that big of a problem. However, three years of employment history might turn out to be quite an obstacle for some of the youngest lenders.

Car.Loan.com
Car.Loan.com

BEST FOR

first-time and subprime car buyers

Visit Website
  • APR: 0%-25%
  • Loan Amount: $7,500-$45,000
  • Minimum Credit Score: Not disclosed
  • Loan Term: 3-6 years
  • Origination Fee: Varies by lender
  • Funding Time: Approval in 30 minutes
  • Credit Check: Soft credit check for the application

Car.Loan.com provides its buyers with easy car loans with bad credit. The application process lasts several minutes; the tools that allow one’s pre-qualification are all there, and the repayment calculator makes any future financial projection a lot easier. With that in mind, the strongest selling point of this platform is the fact that it accepts borrowers with poor credit scores or with no credit history.

This means that Car.Loan.com might be ideal for first-time car buyers. They are usually people new to the job market and who have just recently received their driver’s license. Now, they might be looking for low interest auto loans but their bad credit or lack of credit history is holding them back. Car.Loan.com is there to provide this service.

Loan requirements

There’s no minimum credit score listed but having at least 620 can definitely help a borrower get better loan terms.

As far as the requirements go, the applicant needs to be over 18 years old; the same goes for co-applicants. They might need the necessary documentation to prove that they are US citizens. The income requirement is not necessary, which is great for younger borrowers looking to buy their first car. Still, having at least $1,000 of regular monthly income definitely helps. However, the vehicle that the applicant intends to purchase mustn’t be older than eight years. This still puts it into a great spot from the perspective of used car loans for bad credit.

Loan terms

APR: Depending on one’s credit score, the APR can go anywhere from 0 to 25%. The factors affecting this are vehicle type, geographical location, and credit score of the lender. In other words, while it is possible to get approved with a bad loan, it’s worth your while looking to improve it beforehand.

Loan Amount: The loan amount on this platform is between $7,500 and $45,000, which covers the majority of the needs of an average borrower. Still, a bit higher minimum and a relatively low maximum can become a problem.

Loan Term Length: The loan term varies from one lender to another, with the standard ranging between 36 and 72 months. As far as bad credit car loans with guaranteed approval go, this is really not that bad.

Origination Fee: As this is a lending platform, Car.loan.com doesn’t charge any fees. The lenders themselves, however, probably do. Especially for borrowers with poor creditworthiness. Sure, some lenders may offer the origination fee of 0% but this is usually their lower margin, with the higher margin being around 5%.

Funding Time: When talking about the funding time, this is one of the reasons why Car.Loan.com is considered one of the best auto loan companies out there. The approval can take as little as 30 minutes and the borrower can get their money soon afterward.

Credit Check: The site itself has a tool that allows the potential borrower to check their own credit, using the soft credit pull. Later on, the platform will perform the hard credit inquiry to ensure that the lender’s investment is safe enough.

Repayment: One thing that sets apart this poor credit auto loans platform is the availability of the repayment calculator. This is an instrumental factor for all those lenders who are concerned about their future finances.

What We Liked and Didn’t Like About Car.Loan.com

The first major advantage of Car.Loan.com is that it allows cosigners. So, even if the applicant has no credit history or has a poor credit score, they can still hope to get more favorable terms.

Applicants who have recently filed for bankruptcy are not locked out of this option. Needless to say, in this day and age, bankruptcy is something that can happen to anyone. The availability of online car loans for bad credit just takes some edge off this unpleasant notion.

Everything on the platform was built for the convenience of the user. For instance, the application process lasts about 3 minutes and it may take less than 30 minutes for the applicant to be approved. Car.Loan.com also offers some useful tools like the repayment calculator and loan estimator that can further help the potential borrower figure out their own situation.

When talking about downsides, it’s worth mentioning that these loans aren’t available across the entirety of the US. For instance, they’re unavailable in states like Hawaii, Massachusetts, Mississippi, Nevada, North Dakota, or Oregon. This alone would be a major obstacle.

Lastly, the minimum and maximum lendable amounts are all but ideal. While its averages don’t deviate from the majority of best bad credit car loans, the $7,500 minimum can put some people in a tough spot. Moreover, the maximum amount of $45,000 can be quite restricting as well.

CarsDirect
CarsDirect

BEST FOR

refinancing and bad credit loans

Visit Website
  • APR: 3%-12.90%
  • Loan Amount: $5,000 - not disclosed
  • Minimum Credit Score: Not disclosed
  • Loan Term: 2-6 years
  • Origination Fee: Varies by lender
  • Funding time: As little as 48 hours
  • Credit Check: Hard credit check after the inquiry

CarsDirect will find its place on every list of platforms specializing in the best bad credit car loan in 2020. So, what makes it earn spots on all these bad credit car loans reviews? First of all, it doesn’t insist on the minimum credit score. Second, it accepts even applicants with a $500 monthly income. The majority of its competitors go for at least $1,000 or $1,500. This is quite favorable for young borrowers.

While this particular lender offers great terms even to bad credit lenders, the truth is that the terms get very favorable with a better borrower profile. A borrower with a decent credit score, buying a new car can look forward to some of the best auto loan rates and terms available.

Loan requirements

The credit rating is not an obstacle when it comes to applying for a CarsDirect loan. Still, being over 640 can provide the borrower with far more favorable terms.

Other than this, the applicant has to be 18 years of age or older, a legal citizen of the US, and employed. The last part can be mandatory, provided that the applicant can prove that they are receiving a guaranteed income every month. It is, therefore, easy to understand why some see CarsDirect as the best place for an auto loan.

Loan terms

APR: Due to the fact that CarsDirect works with a network of lenders, the APR varies by network lender. Still, the platform average goes between 3% and 12.90%, which is an amount that is amongst the lowest in the industry.

Loan Amount: When talking about the loan amount, the minimum lendable amount is about $5,000. While the maximum amount is not disclosed, it’s worth mentioning the fact that a trade-in is a possibility with this platform.

Loan Term Length: The loan term on CarsDirect loan is between two and six years. This makes it suitable even for car refinancing.

Origination Fee: Unlike most other lenders, CarsDirect generally doesn’t enforce a hard set of rules on the lender-borrower interaction. This means that while it’s possible for a borrower to find zero down bad credit car loans, the origination fee can sometimes go as high as 10%.

Funding Time: One thing setting apart CarsDirect from the rest of the competition is the fact that it can complete the entire process in as little as 48 hours. This is just two business days, which is quite superb compared to other lending platforms.

Credit Check: Since this platform specializes in cheap car loans for bad credit, there’s no minimum credit requirement. However, in order to set the APR, the platform is conducting both soft and hard credit pull.

Repayment: The repayment is made a lot easier with the availability of the repayment calculator tool. There is also no early repayment fee, which is a huge issue for a lot of lenders.

What We Liked and Didn’t Like About CarsDirect

The first advantage of CarsDirect is that the majority of service is completely fee-free. This allows an average lender a chance to apply with several lenders at once, without much financial repercussion.

Second, one thing that sets CarsDirect amongst the top of the industry is the fact that it has some of the best car loan rates out there. This alone makes the repayment easier and increases the odds of borrowers finding the loan favorable.

This platform is convenient because it assists in both financing and car research. In other words, not only will it help you finance the car but it will also allow you to find the right car to buy.

While it is possible to use the CarsDirect platform to find car loans with bad credit and no money down, it is quite likely that, with bad credit, you will have to face a steep origination fee.

Another major problem is the general lack of transparency. The amount of information available to potential lenders is really not that great, especially compared to what some of their competitors provide.

How to Pick the Right Car Loan for You?

When talking about choosing amongst various car loans for bad credit, things tend to be fairly complex. First, it all comes down to one’s own financial history and credit score. Even though these car loans approve of bad credit borrowers, the terms that they offer often aren’t favorable. Still, various platforms are willing to deviate quite heavily from the industry average, which is why it’s definitely worth shopping around.

Second, the APR is not just determined by one’s credit score. Whether the vehicle is new or used is another factor worth taking into consideration. So, sometimes in order to get the best car loans for bad credit terms, you might have to go for a new car. Sure, the cost of the new vehicle may be quite steep but the APR difference may make this purchase worth it. Stretched over the course of many months (up to seven years), the difference in monthly payment may be barely noticeable.

Lastly, the minimum and maximum borrowable amounts may make a substantial difference. Provided that you’re buying a used car whose value is far below the minimal lendable amount of the platform in question, this decision will definitely be worth reconsidering. Then again, when buying a luxury vehicle or a large vehicle that you intend to use for business needs, you might have to take a closer look at the maximum amount available.

Wrap Up

The importance of car loans for bad credit in today’s society is greater than ever. This is especially true because some people rely on their cars to pursue gainful employment or get to work. Some even use their vehicle to make money. Without the means to buy the vehicle, they would be left stranded in an even worse financial situation. Fortunately, with the right lender, they might just have the tools to turn this around. Still, the loan terms are what can make this loan opportunity truly worth one’s while.

FAQ

How to get a car loan with bad credit?

There are several options that people with bad credit have when looking for a car loan. One of them is to get a co-signer. Another one is to go to a buy-here-pay-here type of dealership, which might be a bit harder to find. Some credit unions are also more than willing to approve of such loans. Finally, there are some lenders and lending platforms out there specializing in the best bad credit auto loans. The latter option might just be one’s best bet of getting the car loan at favorable terms.

What is a good APR for a car loan?

There are two major factors that determine the APR for a car loan. The first one is the actual credit score and the latter one is whether the car in question is new or used. With a high score and new car purchase, the APR is generally lower. For instance, the average APR for those with a credit score above 781 APR is 3.65% when buying a new car and 4.29% when buying a used car. On the other hand, for those whose credit score is below 601, the industry averages go between 11.92% for a new car and 17.74% for a used car. In other words, car loans for people with bad credit are its own category.

Can you be denied a car loan after pre-approval?

One of the things that a lot of applicants get wrong is placing too much importance on the pre-approval. The real application inspection process begins after that. There’s also a chance that your financial situation will change between the pre-approval and the actual approval. In that case, being denied even after being pre-approved shouldn’t come as a surprise.

Why am I getting denied for bad credit auto loans?

Even amongst lenders and platforms specializing in bad credit loans, there’s a certain limit under which no reputable lender will go. You see, minimum credit score requirements are usually in the 550-600 range but the FICO score goes all the way down to 350. Having no credit history (due to your age) may also be a problem. This can usually be solved with a co-signer. A high debt-to-income ratio is another common reason. Even lenders offering the best bad credit loans can balk at this, as they believe there’s a low chance of full repayment. The type of vehicle, its mileage, and even the model/make may be reasons enough for the loan to be denied.