Bad Credit Auto Loans

Bad Credit Auto Loans |‌ Payday Champion

You may be eligible for auto loans from a lender who focuses on people with bad credit.

Auto loans for people with bad credit are often subject to higher interest rates. It’s important to compare loan offers and shop around. We have compiled a list of options for you to consider.

  • For people who have been declared bankrupt: Prestige Financial
  • Great for a variety of refinance options. Autopay
  • Useful for discounting interest rates: New Roads
  • Great for one-stop shopping: Carvana
  • Prequalification: Capital One Auto Finance
  • For people who are not employed: Credit Acceptance Corp.
  • Great for shopping around: MyAutoLoan
  • We chose these lenders
  • What to do with bad credit auto loans

Good for people who have filed for bankruptcy: Prestige Financial

Why Prestige Financial stands apart: Bankruptcies can have a significant adverse impact on your credit score, which could affect your ability to get an auto loan. Prestige Financial accepts applications from bankruptcy filers. Remember that Chapter 7 bankruptcy filings must be available on the court’s website. Your Chapter 13 bankruptcy application must be approved before your application can be considered.

Here are more details about Prestige Financial auto loans.

  • Prestige Financial offers a program to reduce interest rates

    for qualified borrowers who pay their bills on time. Your rate could be reduced by as much as 0.5% every three-months — or 2% annually. It’s important to note that your annual percentage rates or APR will fall to 14%, which is still very high.

  • Joint applications are allowed 

     Prestige Financial will accept both individual and joint applications. A co-borrower with good credit may increase your chances of getting approved or lower your interest rate. The co-borrower is responsible for the monthly payments. Not allowing co-signers is not something Prestige Financial allows. They only have responsibility for your loan if you default.

  • Income requirements —

     If you are applying individually, you must make at least $2250 and $2750 if you use them together. Prestige Financial will not consider income from self-employment when determining your ability and capacity to repay your loan.

Read the Prestige Financial auto loan review.

Great for a variety of refinance options. Autopay

Why Autopay stands apart: Autopay offers many auto financing options. These include loans for new and used vehicles purchased from dealers, private loans, and multiple refinancing options, including traditional, cashback, and lease buyout refinancing.

More information about Autopay auto loans is available here.

  • Multiple offers

    Autopay are not lenders. It is an online marketplace that allows you to connect with auto lenders. This enables you to get loan offers from various lenders.

  • You can apply for prequalification.

    If you prequalify for an auto loan, you can view your estimated rates and loan terms without affecting credit scores. Prequalification does not guarantee approval nor specific terms. If you are approved, this information will be provided to you.

  • Loan amounts from $2,500 to $100,000 are available through Autopay.

    The loan terms can be as short as 24 months or as long as 84 months. Payday Champion may offer Autopay terms that are different. Remember that even though a longer-term loan can lower your monthly payment, it will likely result in higher interest payments.

  • Additional products

    Autopay offers vehicle service contracts and guaranteed assets protection insurance for an additional fee. Gap insurance will cover the difference between your vehicle’s worth and the amount you owe on an auto loan.

  • Apply with co-applicants

    Autopay lets you apply with a fellow applicant.

Read the Autopay loan review.

Useful for discounting interest rates: New Roads

Why New Roads stands apart: 

It can be challenging to qualify for low rates if you have bad credit. Consumer Portfolio Services Inc.’s direct lending division, New Roads, offers interest rate discounts for specific pre-owned models and new-car models. This can help reduce interest costs.

Here are some additional details about the New Roads auto loan.

    • Loan types – New Roads offers new and used car loans, lease buyout loans, and refinance loans.
    • Availability – New Roads auto loans are only available in 30 states.
    • There is no down payment –New Roads does not require one. Without one, you will need to finance a more significant amount and pay more interest over the loan’s life.
    • Bankruptcy or repossession –New Roads will consider applications from people with a bankruptcy or repossession (even if still open) on credit reports.
  • New Roads allows you and a co-buyer to apply for a property.

Great for one-stop shopping: Carvana

Carvana stands apart: Carvana is known for its network of vending machines that allow car buyers to pick up their cars. It also offers financing and car ownership in one location.

These are more details about Carvana.

  • Carvana offers only one type of loan

    Carvana loans are for financing its in-stock inventory of used cars. You will need to find a lender that provides a different kind of loan to finance your vehicle.

  • You can apply for prequalification.

    Carvana provides a prequalification process that allows you to see the estimated rates and terms you may be eligible for without affecting your credit scores. While prequalification from auto lenders is available for 30 days, Carvana’s prequalification offers last for 45 days.

  • Eligibility requirements

    – Carvana requires that applicants have a minimum annual income of $4,000 and no active bankruptcy.

  • Do vehicle’s not accepted using cosigners.

    Carvana does not allow cosigners. You will need to apply with another lender if you wish to do so.

Read our Carvana Financing Review.

Prequalification: Capital One Auto Finance

Why Capital One Auto Finance stands apart: Some lenders won’t allow you to prequalify with an auto loan without creating a hard credit inquiry. This can impact your credit scores. 

Capital One Auto Finance will enable you to check your loan rate and term, assuming you are offered a prequalification. This will not affect your credit scores. To determine if your application is approved and to receive your final loan terms, you will need to complete a full one.

Here are some additional details about Capital One Auto Finance.

  • Loan types – Capital One Auto Finance offers loans to buy new or used cars or refinance an existing auto loan with a different lender.
  • Loan amounts– The minimum loan amount Capital One Auto Finance offers you is $4,000. Your credit history, income, and other factors will determine your maximum loan amount.
  • Dealership restrictions — Capital One Auto Finance loans cannot be used at any of the 12,000 participating dealerships.
  • Eligibility requirements- To apply for a loan from Capital One Auto Finance, you must be 18 and live in the United States.
  • Online car-buying — Search for the right car for you while shopping for financing using Capital One Auto Finance’s Auto Navigator.

Check out our Capital One Auto Finance review.

For people who are not employed: Credit Acceptance Corp.

Why Credit Acceptance Corp. is different: Credit Acceptance Corp. provides auto loans to individuals who have had financial difficulties, as well as those receiving unemployment income.

These are additional details regarding Credit Acceptance Corp. loans.

  • Loan types – Credit Acceptance Corp. provides financing for new or used vehicles purchased from a participating dealer.
  • Availability – Credit Acceptance Corp., an indirect lender, offers financing through participating dealers. These dealerships can be found in all 50 states, but there is no guarantee they will be close to your home. Be aware that these dealerships maybe buy here, pay here dealers. These dealers may charge high-interest rates. The average speed was 20% in 2018, according to the 2019 Used Car Industry Report of the National Independent Automobile Dealers Association.
  • Bankruptcy – Credit Acceptance Corp. will consider applications from individuals who have an open bankruptcy.

Great for shopping around: MyAutoLoan

Why MyAutoLoan is different: Comparing auto loan offers from multiple lenders will help you get the best rate. MyAutoLoan connects people seeking auto financing with lenders within its network. In just minutes, you can get up to four loan proposals.

These are just a few of the things you need to know about MyAutoLoan.

  • Loan types – MyAutoLoan offers many auto loans, including new cars, private parties, lease buyout, and refinance loans.
  • Bankruptcy – Lenders within the MyAutoLoan network might consider individuals who have filed bankruptcy as long as they have been discharged.
  • Eligibility criteria — Eligibility rules vary from lender to lender. To be eligible for a loan, you must be 18 years of age, have a minimum of $21,000 income, and have a FICO(r) score of at least 575.
  • Interest Rate Calculator — MyAutoLoan offers an interest rate calculator that allows you to see the estimated rate based upon loan type, loan amount, and credit score.

Read our MyAutoLoan car loan review.

How did we choose these lenders?

This roundup was based on factors that might be beneficial to people with poor credit. These are just a few of the factors that we took into consideration.

  • A wide range of auto loans is available.
  • You can apply for prequalification to see the estimated rates and terms
  • Co-applicants may be allowed. This could help applicants obtain better terms and rates.
  • Additional perks include rate discounts.

What are the factors to consider when applying for bad credit auto loans

People with lower credit scores tend to pay higher interest rates. This is why it’s essential to shop around before applying for a loan. You may be eligible for a lower rate if you delay your purchase while you improve your credit.

If you need to purchase a car right away, you have steps you can take that will increase your chances of approval and decrease your financing costs.

You can improve your credit score by making timely payments and decreasing your debt if approved for a loan. You may be able to refinance an auto loan at lower interest rates as you build credit.

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Author: Jay Batson

My Name is Jay has and I have a passion for financial writing. I am the chief writer on this blog. I do my best to verify all the information but if there is anything amiss please let me know and I will do my best to correct it.

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