4 Best Bad Credit Car Loans in 2021

In 2021 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

The biggest advantage of myAutoloan is the fact that it can get you several quotes in a record amount of time. For those who are uncertain and want to weigh in all their options, this could provide the variety they need. Full Review

  • Minimum Credit Score: 575
  • Funding time: Immediately after approval
  • BBB accreditation: A+

The biggest advantage of myAutoloan is the fact that it can get you several quotes in a record amount of time. For those who are uncertain and want to weigh in all their options, this could provide the variety they need. Full Review

2. Auto Credit Express

One thing that singles out Auto Credit Express is the fact that it provides poor credit auto loans to those who would be outright rejected on other platforms. Even if you have no credit or a bankruptcy in the past, you still have a high approval chance with the lenders from the Auto Credit Express network. Full Review

  • BBB accreditation: A+
  • Minimum Credit Score: 300
  • Loan Length: 36-72 months

One thing that singles out Auto Credit Express is the fact that it provides poor credit auto loans to those who would be outright rejected on other platforms. Even if you have no credit or a bankruptcy in the past, you still have a high approval chance with the lenders from the Auto Credit Express network. Full Review

3. Car.Loan.com

This platform is providing you with probably the shortest path from looking for a car (despite your credit score or credit history) to actually owning a car. It provides both loans and vehicles for sales for you to choose from. Full Review

  • Minimum Credit Score: 300
  • Funding Time: Approval within 24 hours
  • APR range: 0%-25%

This platform is providing you with probably the shortest path from looking for a car (despite your credit score or credit history) to actually owning a car. It provides both loans and vehicles for sales for you to choose from. Full Review

4. CarsDirect

Those looking for an end-to-end platform needn’t look further than CarsDirect. Here, you can do everything from borrowing money to researching the vehicle you intend to buy. Full Review

  • Loan Term: 24-84 months
  • Funding time: 24-48 hours
  • BBB accreditation: A+

Those looking for an end-to-end platform needn’t look further than CarsDirect. Here, you can do everything from borrowing money to researching the vehicle you intend to buy. 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

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  • Minimum Credit Score: 575
  • Loan Length: 24-72 months
  • Funding time: Immediately after approval
  • Minimum income requirement: $1,800 a month (gross)
  • APR range: Not disclosed
  • BBB accreditation: A+

The first thing worth mentioning is that myAutoloan is a loan marketplace and not a direct lender. This means that it is merely a tool designed to help you find the best bad credit car loans for your specific situation. For instance, some lenders may approve loans for mileage of vehicles or model requirements that others don’t.

Interest rate

Finding the best car loan rates is always a matter of specific loan terms, and myAutoloan is not an exception to this rule. Three main factors affect the APR rates:

  • Loan term duration
  • Type of auto purchase
  • Applicant’s credit score

Loan term duration

When it comes to loan term duration, you have three general categories:

  • 24-36 months
  • 37-60 months
  • 61-72 months

The loan length varies by lender and is generally determined by the vehicle age and mileage, along with your credit profile. Remember, the lower the loan term duration, the lower the APR.

Type of auto purchase

As one of the platforms where you can find the best car loans for bad credit, myAutoloan adjusts its APR according to the auto purchase type. These are:

These auto purchase types are listed in order from the one providing the lowest APR to the one with the average highest.

Credit score and additional variables

Naturally, your credit profile will affect your APR. Lenders offer the most favorable terms to applicants with excellent (720 and above) or good (690 to 719) credit scores. However, with myAutoloan you can get approved with a rating as low as 575.

Also, the interest rates themselves are prone to change. This means that the Interest Rate Chart that can be found on the platform serves only as a rough estimate.

Credibility and speed of response

People’s first question when it comes to bad credit auto loan lenders is their credibility and reliability. The platform is A+ BBB accredited, which provides borrowers with an additional layer of trustworthiness.

In terms of practicality, this is one of the quickest platforms on the market. While it is possible to take longer to create a buyer’s profile during the weekends or holidays, this is usually a matter of minutes.

Overall, the platform tries to provide you with at least several options in a matter of minutes. How long the lenders take to respond, on the other hand, is something that myAutoloan can’t affect.

Positive trade equity

One thing worth considering when comparing car loan companies is whether they have a trade-in option. This is a check that myAutoloan definitely passes.

In a scenario where the vehicle that you currently own has a higher worth than the remaining loan balance, you may be eligible for the positive trade equity. From this point on, you can use the equity as a part of the down payment, which will drastically lower the loan amount.

Key takeaways

Platforms like myAutoloan are the quickest way for you to shop around and get some decent bad credit auto loans.

Auto Credit Express
Auto Credit Express

BEST FOR

bad credit and bankruptcy auto loans

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  • Minimum Credit Score: 300
  • Loan Length: 36-72 months
  • Funding Time: Not disclosed
  • Minimum income requirement: $1,500-$2,000 a month (gross)
  • APR range: Not disclosed
  • BBB accreditation: A+

Regardless of your credit score, recent financial delinquency like bankruptcy may make it seem like you have no options whatsoever. With the Auto Credit Express platform, this will not be an obstacle to securing even low interest car loans for bad credit.

Versatile tools

The first thing that makes Auto Credit Express user-friendly is the variety of tools available on the platform. This provides a holistic approach and creates an end-to-end procedure for anyone willing to do their research in order to get the best deal possible.

Car loan estimator

If this is the first time you’re applying for this type of loan, the chances are that you won’t know what to expect loan-wise. Through the car loan estimator, you can get a rough calculation in three easy steps.

  • First, you start with your credit profile. This way, you will be able to get information about your options for low credit auto loans. As mentioned above, even having no credit or past bankruptcy won’t be enough to disqualify you. Thus, N/A (very bad credit) is among the options to pick at this stage of your application.
  • Second, you set your income (before tax deductions). Bear in mind that you should earn at least $1,500 a month to qualify for financing.
  • Third, you have several recurring monthly debt types (rent/mortgage, garnishments, minimum credit card payments, other loan payments) to tick off. The platform needs this information to evaluate your creditworthiness and present you with personalized offers.

Monthly payment calculator

Finding the lender is not your only challenge. Before you know whether or not their offer is even acceptable, you need to figure out whether your finances can handle the monthly payment in question. The installments of these bad credit car loans will depend on five factors:

  • Price of car
  • APR
  • Down payment
  • Loan term duration
  • Amount of loan

The fact that you have availability of this tool completely free of charge and that its use is quite simplistic will help you quickly evaluate any loan offer you receive.

Network of bad credit car dealers

Auto Loan Express offers access to one of the country’s largest networks of bad credit car dealers. At the moment, the number exceeds 1,000, and the coverage is nationwide. This means that the platform could save you a lot of time and effort browsing online auto loans in the hunt for the best deal.

Key takeaways

The most important thing worth knowing about Auto Loan Express is the fact that it offers car loan options even for those who have no place else to go. Nonetheless, the user-friendly tools ensure that it’s not necessarily seen as the last resort or a contingency plan.

Car.Loan.com
Car.Loan.com

BEST FOR

first-time and subprime car buyers

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  • Minimum Credit Score: 300
  • Loan Term: Not disclosed
  • Funding Time: Approval within 24 hours
  • Minimum income requirement: Not disclosed
  • APR range: 0%-25%
  • BBB accreditation: No

The facility of finding a car loan is important even for those with a bad credit score. In other words, it’s not just that they want a car loan with bad credit. Lenders with poor financial history would always prefer easy car loans with bad credit. Fortunately, it doesn’t get any simpler than the service provided by Car.Loan.com.

Quick and easy experience

Car.Loan.com promises that it takes only three minutes to complete the auto finance request. This is how simple the application process is.

The platform specializes in bad credit lenders, so it also has bankruptcy and no credit loans as options. However, you should not mistake this Car.Loan.com as a service exclusive to bad lenders. Those with good credit can use this marketplace to find some of the best low-interest auto loans on the market. This way, they get the most favorable terms and a quick form (which allows them to skip most of the paperwork they need with a traditional lender).

Loan estimator

The tool provided on the website gives users a chance to estimate the loan they can get in three simple steps. First, you pick the range of your credit profile:

  • Good credit (700)
  • Fair credit (625)
  • Situational bad credit (575)
  • Bad credit (525)
  • No credit (N/A)

During the next stage, you need to enter your total monthly income (average) before taxes. Even when it comes to used car loans for bad credit, the debt-to-income ratio is a pretty big deal. This is true even in the case of bad credit lenders.

Lastly, you get to list all your monthly recurring debt. Here, you count things like rent, mortgage, or credit card payments but you don’t include utility bills or car payments.

All in all, you can get an estimated amount in a matter of seconds (provided you don’t have to check all of these factors and know them by heart instead).

Not a direct lender

One important thing to keep in mind is that while this is a great place for you to find poor credit auto loans, there is no guaranteed approval anywhere. The APR can range from 0% to 25%, depending on your credit history, vehicle type, and geographic location. In the end, Car.Loans.com is not a direct lender but a platform matching you to suitable loan providers. This means that it all comes down to the lender’s decision.

Key takeaways

While the main traits of Car.Loans.com are the process simplicity and expediency, there are other reasons to pick this platform, as well. For those with good credit scores, interest rates can go pretty low.

CarsDirect
CarsDirect

BEST FOR

refinancing and bad credit loans

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  • Minimum Credit Score: 300
  • Loan Term: 24-84 months
  • Funding time: 24-48 hours
  • Minimum income requirement: $1,500-$2,000 a month
  • APR range: Not disclosed
  • BBB accreditation: A+

CarsDirect is a platform that specializes in used and new car loans for bad credit. When buying a vehicle, pricing information for specific brands and models can be hard to come by (at least from a reliable source and with enough detail). CarsDirect handles this for you. From the point you make up your mind, it helps you find the right loan for your car choice and credit situation.

Car loans for those experiencing financial challenges

Even people with bad credit, no credit, or recent bankruptcy need a car. From their perspective, the best place for an auto loan is definitely one that won’t disqualify them for their less-than-stellar credit history.

Submission in 60 seconds

Another considerable advantage of this platform is your ability to submit a request in about 60 seconds or less. If you know where you stand financially and what you need, you can submit a request form without any further obligation. In fact, the entire process is designed to create a scenario where you get from submitting the form to driving away happy in as little time as possible.

Loan calculator

Like the majority of its competitors, you have access to a car loan calculator. While finding the best auto loan rates will require a decent credit score, nuances regarding your current financial status will make a world of difference.

This is one of the rare loan calculators that allow you to use your desired monthly payment as the starting point. By adding several other parameters (down payment, credit rating, lease term, sales tax), you will get detailed information about your options.

Auto refinancing

Auto refinancing is definitely one of the most effective forms of approaching car purchase. This option allows you to lower the monthly payment of your existing car loan. In fact, some of the best bad credit car loans are only available through this particular option.

Customer support

In terms of customer support, this platform has a decent FAQ page that can answer most of the questions that you may have. If not, you can reach the company via a phone line.

Key takeaways

CarsDirect’s biggest appeal is that it allows the user to approach the situation as a buyer, not just a borrower. This familiar experience can help put their mind at ease.

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.