![]() ![]() Compare different lenders’ credit requirements to find a suitable option for your situation. ![]() Credit requirements: With bad credit, your options may be more limited.In general, it’s best to avoid lenders that charge sky-high fees compared to competitors. Fees: You’ll also want to consider fees, including origination/application, registration, title, and prepayment fees.You can expect to receive a higher rate with bad credit than you would with good credit, but certain lenders offer higher rates than others. Interest rates: As you shop around for an auto loan, it’s essential to compare interest rates.*Source: myFICO How to Compare Bad Credit Car Loans There’s no specific minimum credit score that applies across all lenders. Negative items may include missed or late payments, maxed-out credit cards, past bankruptcies, or several credit inquiries in a short timeframe.īecause different auto lenders have different borrowing criteria, you could get approved for a car loan with limited or poor credit. You may have a poor credit score if you have no credit history or negative items on your credit reports. And a score in the 300–600 range is considered “very poor” or “poor” by VantageScore. With the FICO model, a credit score is considered “poor” if it falls into the 300–579 range. Both of these models segment credit scores into ranges from 300–850. Multiple credit scoring models exist, though lenders commonly use the FICO and VantageScore models in loan decisions. Guide to Choosing the Best Car Loans for Bad Credit What Counts as Bad Credit for an Auto Loan? CarMax and the other lenders above all accept people who don’t have the best credit, so you can still shop around and find a loan that fits your budget. Like AUTOPAY, it’s transparent about its loan terms and amounts. Those shopping for used cars may also want to consider CarMax. Its minimum credit score requirement is just 500, so it’s an option even if you have bad credit. Unlike some competitors, it provides clear details about its loan amounts, terms, and borrower and vehicle requirements. This lending platform offers new and used car loans, as well as refinancing. For most car buyers, AUTOPAY could be a good first choice. If you’re concerned your bad credit may be a barrier to getting an auto loan, you may be surprised to find out that financing options are available. ![]() Overall, although you may end up paying more than with some other lenders, OpenRoad is exceptionally flexible in its borrower and vehicle requirements. There are no prepayment penalties, though, and OpenRoad accepts an LTV of up to 180%, which is high compared to competitors. This lending platform also charges origination fees of up to $449 and late fees of up to 5% of the total unpaid balance. Borrowers will need to prequalify to determine what rates, terms, and loan amounts may be available to them. While its vehicle qualifications are relatively open, OpenRoad Lending doesn’t disclose its maximum APR-and you may get something on the high end of that range if you have bad credit. OpenRoad also doesn’t have a maximum age for vehicle financing, while many competitors won’t finance a vehicle over 10 model years old. For context, many lenders only allow financing for vehicles with up to 120,000 or 150,000 miles. This lending platform allows borrowers to finance cars with up to 160,000 miles. If you’re interested in refinancing a high-mileage vehicle, OpenRoad Lending may be a decent option. *Customer reviews were collected from an independent survey of 1,016 current, past, and prospective auto loan borrowers. … But that's the only thing I would do differently, is … go for something with a lower interest rate.” “If I was going to do something differently, I'd probably check and see if credit union had lower interest rates.But because I was in a different state, they didn't do that.” If I picked it online they would have driven it to me and had me fill the paperwork in my house. They would have even brought the car to me. But this time it was during COVID when I got the car and they were trying to do everything that they could online. “.Over the years I started buying from CarMax, maybe about 15 years ago, and had used the same salesman, usually.And I've been happy with the warranties on the repairs two cars ago.” I've bought, and my family has bought more than one car from them, and I've got friends who have, so I think it's pretty well-run. “I've been satisfied with the products that I've gotten there. ![]()
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