What is the Best Car Loan Company For Bad Credit?

What is the Best Car Loan Company For Bad Credit?
Photo : What is the Best Car Loan Company For Bad Credit?

If you have a bad credit score, applying for a car loan may seem out of your reach. Although your credit score is one of the main factors that lenders consider when looking at your loan application, a bad credit score shouldn't discourage you from applying. It's still possible to find an auto loan. However, purchasing a vehicle with bad credit means you'll pay higher APRs and have tighter restrictions. To help you in your search, we've come up with a list of lenders who will offer you a decent car loan even if you have bad credit.

Best Car Loan Companies for Bad Credit Borrowers

  • Lending Arch

Lending Arch helps people with bad credit get a car loan by letting them search for the right loan provider. All you have to do is enter your basic information into one application, and the site will match you to the loans you'll be most likely accepted for. As a result, this reduces your risk of being rejected and having multiple hits on your credit report. 

Lending Arch does not perform credit checks. Instead, after you've given Lending Arch information about your situation, they look at your complete financial picture, considering your employment, income, and where you live. You will then get a pre-approval, and the Lending Arch matching engine will provide you with a list of lenders who will give you a loan.

  • Prestige Financial

Prestige Finacial considers applications from people who have filed for bankruptcy. They have an interest rate reduction program that rewards qualified borrowers who make their payments on time with a reduced interest rate every three months. They also allow joint applications. Therefore, if you co-sign the car loan with someone who has good credit, you'll have a better chance at qualifying for a low-interest rate. To be eligible for a car loan from Prestige Financial, you need to have a minimum income of $2250. However, they won't consider you if you only have self-employment income.

  • Autopay

Autopay provides a wide variety of car loans, including loans for new and used cars, private party loans, and multiple refinancing options, including traditional, cashback, and lease buyout refinancing. They work by connecting you with a variety of auto lenders so that you can get loan offers from more than one lender. You also have the option of applying for prequalification. When you prequalify, you're able to check your estimated rates and loan terms without affecting your credit scores. Additionally, Autopay lets you apply with a co-applicant to improve your loan options.

  • New Roads

What sets New Roads apart from other lenders is that they offer interest rate discounts on specific pre-owned and new car models. They offer new and used car loans, lease buyout loans, and refinance loans.

New Roads consider applications from people who have a repossession or bankruptcy on their record. They also allow co-applicants, and they don't require a down payment.

  • Carvana

With Carvana, you can shop for both a vehicle and a vehicle loan in the same place. However, Carvana only offers loans to finance its in-stock inventory of used cars. Therefore, if you don't want one of their cars or if you want a different type of auto loan, you'll need to work with a different lender. 

Carvana provides a prequalification process that lets you view the estimated rates and terms you could qualify for without affecting your credit scores. This prequalification is good for 45 days.

To qualify for a loan from Carvana, borrowers need to have a minimum income of $4000 a year with no active bankruptcies. Additionally, Carvana doesn't accept co-signers.

  • Capital Auto One Finance

Offering loans for new and used cars, Capital One also provides prequalification so you can view your estimated loan rate and term without affecting your credit score.

The minimum loan amount that Capital One offers is $4000, and the maximum loan amount is decided based on your credit history, income, and several other factors. Additionally, you can only use a Capital One loan at one of their 12,000 participating car dealerships.

Conclusion

You can get a car loan even if you have bad credit. However, you can expect to pay higher interest rates. Additionally, there may be further stipulations like a minimum income amount.

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