Auto Loans for Bad Credit Consumers
Apply for a Loan
Secured with SHA-256 Encryption
UPDATED: Sep 12, 2011
Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.
Each year, over 20 million car financing arrangements are made and signed – and not all buyers go through the process with excellent credit. Securing a car loan with bad credit, no credit or after a bankruptcy may be more challenging than doing so with a high credit rating. As a result, certain advertised incentives such as low interest rates during special sales may be unattainable. A less than perfect score, however, doesn’t eliminate the opportunity for auto financing.
A credit report is one of the key components of an auto loan interest rate, though other factors such as where the vehicle is purchased, whether the vehicle is used or new and overall market rates also influence a final financing offer. Consumers with bad credit may wish to use these factors to their advantage to offset the higher interest rates associated with poor credit.
The source of financing is also important for car buyers with bad credit hoping to secure reasonable interest rates. Car dealerships often work with a number of local lenders and financial institutions, and may offer a few different loan possibilities during purchase. Such offers are typically marked up by the dealership, however, and may not be able to compete with rates available from local credit unions or online financing services.
In fact, buyers may be able to obtain small interest discounts when taking out an auto loan from a bank or other institution where they already have membership. Bad credit auto loans may carry higher interest rates as a general rule, but buyers are increasingly accepting poor rates upon initial purchase and choosing to refinance when circumstances have improved.