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Last updated: January 9, 2026The Best Auto Loans for Bad Credit in 2026
Learn our top choices for the most affordable rates, even without perfect credit.
Best for Used Car Loan
Best from a Bank
Best from a Credit Union
Even with interest rates and inflation beginning to stabilize, the pandemic has left its mark on several industries with price increases, including the cost of cars. In May 2025, the average overall transaction price of vehicles rose by $10,600 since the start of the pandemic.1
Many families across the country can’t afford to buy cars outright, so many turn to auto loans to finance their vehicles. The same price increase pattern is true for house mortgages, student loans, and personal loans, which means people are taking out more loans and larger loans to finance larger purchases.
Excessive borrowing naturally leads to more debt and an average drop in credit score, which can hurt your chances of getting approved for an auto loan or finding an auto loan with reasonable terms. That’s why we’ve compiled this list, which surveys some of our top picks for institutions, loan terms, and APRs if you’re seeking an auto loan with bad credit.
In most states, low credit will also increase your auto insurance rates. We’ve assembled a guide to finding cheap auto insurance.
Best Auto Loans for Bad Credit
- Carvana – Best Used Auto Loan With Bad Credit
If you’re seeking a loan because you want a used car, Carvana is a great option. They have no minimum credit score, offer thousands of used cars to choose from, and have fair starting loan rates. - Ally – Best Bad Credit Auto Loans From a Bank
With several payment options and flexible refinancing options, Ally is our top pick for bad credit auto loans from a bank. - Digital Federal Credit Union (DCU) – Best Bad Credit Auto Loans From a Credit Union
DCU members enjoy affordable rates, membership discounts and benefits, and higher mileage/vehicle age thresholds, making our first recommendation for bad credit loans from a credit union.
The Best Auto Loans for Bad Credit
- Best Used Auto Loan With Bad Credit: Carvana
- Best Bad Credit Loans From a Bank: Ally
- Best Bad Credit Loans From a Credit Union: Digital Federal Credit Union
- Best Online Bad Credit Loans: LendingTree
- Best Bad Credit Loans for Used Cars: myAutoloan
Comparison of the Best Auto Loans for Bad Credit of 2026
| Feature | Carvana | Ally | DCU | LendingTree | myAutoloan |
|---|---|---|---|---|---|
| Minimum credit score | None | 520 | None | Varies | None |
| Best for | Someone looking to buy a used car | Young drivers | DCU members | Drivers who want multiple options | Drivers who want flexible loan lengths |
| Trustpilot rating (out of 5) | 4.4 | 1.4 | 1.7 | 4.4 | 3.6 |
| Better Business Bureau rating | B+ | A+ | A+ | A+ | A+ |
Detailed List of the Best Auto Loans for Bad Credit
1. Best Used Auto Loan With Bad Credit - Carvana
What We Like Most:
- Over 25,000 used vehicles to choose from
- Open to borrowers with bad credit
- Fully online application process
Carvana is designed for drivers seeking to buy a used car with a loan. It offers over 2,500 used vehicle options, flexible payment options, and the option to apply with a co-signer, making it easier for you to qualify for a loan with bad credit.
Who It's Best For- Someone seeking a used car
- People who want a co-signer
- Someone who prefers a fully online application process
- Someone with no active bankruptcies
Who It's Not Best For
Drivers in Hawaii and Alaska (Carvana is unavailable in those states)- Someone who doesn’t want to buy a used car
Easy Qualification Process
If you’re having a hard time qualifying for an auto loan, Carvana might be a good option for you. Carvana does not have a credit score minimum for its applicants and only runs a soft credit check, which means its qualification process will not affect your credit score in any way. Additionally, you can include a co-signer to your policy to you get better rates and higher chances of approval.
Large Selection of Vehicles
With over 25,000 used vehicles, you’ll have a large selection of options to choose from. Carvana allows you to filter your car types with the following options:
- Vehicle cost
- Make & model
- Body type (SUV, sedan, truck, etc.)
- Years and mileage
- Fuel type (gas, hybrid, electric, etc.)
- Miles per gallon
And more!
Seamless Digital Experience
Carvana’s digital interface is intuitive and easy to use. In minutes, you can customize your loans and vehicle options by vehicle type, loan terms, costs, and APR. If you’re having any issues searching for a loan or vehicle, Carvana’s customer service representatives are available Monday through Saturday, 8 a.m. to 10 p.m. ET and Sunday, 7 a.m. to 10 p.m. ET, to guide you through the process.
2. Best Bad Credit Loans From a Bank - Ally
What We Like Most:
- Great add-ons
- Loans for commercial vehicles
- Can buy out your lease
Ally, a subsidiary of Ally Financial Inc., offers two types of auto loans to support drivers with diverse circumstances: refinancing and lease buyouts. Its auto refinancing option may be suitable if you are unhappy with your current loan amount, term, monthly payment or interest rate. If you lease your car currently and wish to buy it, we suggest you look into Ally’s lease buyout loans.
Who It's Best For- Those who make at least $2,000 a month
- Those who don’t mind a prequalification process
- People over the age of 18 (or 19 in Alabama) and living in the covered states in the United States
- People who appreciate a variety of payment options
Who It's Not Best For- Those who want to buy their leased vehicles that are financed in Indiana, Nevada, Vermont, Wisconsin, and Washington, D.C., or those who want to refinance their loans and live in Nevada, Vermont, and Washington, D.C.
- Drivers of vehicles with branded titles, such as salvage, flood, and fire
- Drivers of vehicles with unrepaired collision or comprehensive damage
- Drivers of vehicles with more than one lien
Loan Options
Customers who borrow and refinance with Ally Auto save an average of $166 a month and make up a total interest savings amount of $1,992.2 Ally offers both auto refinancing and lease buyout loan options, which allow you to prequalify in a matter of minutes. The financial process for both refinancing and lease buyout loans can take as little as a few days up to a few weeks. Here’s some other information about both loan types:
- Loan terms of 36 to 75 months
- Loan amounts from $5,000 to $99,000
- No Social Security number required for initial application
- Soft credit pull only for prequalification, which won’t affect your credit score
- Allows co-applicants
NOTE:
Ally does not list its average annual percentage rates (APRs) for either type of loan, but you’ll receive your estimated interest rates and loan amounts once you fill out the prequalification form online.
Advantageous Add-Ons
In addition to Ally’s vehicle financing services, you can opt for additional coverages to protect your pocketbook. Explore a few of these coverages below:
- Guaranteed asset protection (GAP) insurance: Ally’s GAP insurance is available for both used and new cars and protects you if an accident totals your car. Specifically, Ally’s gap insurance benefits cover the remaining net outstanding balance on your financial agreement when the value of your car is less than what you owe.
- Extended vehicle coverage: Ally offers three options for extended vehicle coverage, varying by level of coverage. Major Guard is the most comprehensive package for gasoline, diesel, or fuel-efficient hybrid vehicles. Essential Guard is the fundamental package that covers essential features like transmission and braking. The third option is Major Guard EV, which covers electric propulsion vehicles and plug-in hybrids.
- SmartLease Protect: Ally offers a coverage plan for those who lease vehicles to pay for excess mileage and wear-and-tear expenses. This protection plan covers exterior surface damage, tires, wheels, and glass, among other vehicle parts. With SmartLease Protect, Ally waives excess mileage charges of up to $400 and excess wear charges from $3,750 to $7,500, depending on your annual mileage.
Business Loans
Not only does Ally offer personal loans, but it also offers a variety of business loan plans to fit your needs.3 Here’s a brief explanation of each plan:
- Specialty vehicle: Modify or up-lift trucks, vans, and other commercial vehicles by adding a crane, mobility lift device, or towing equipment.
- Line of credit: Purchase or lease commercial vehicles, including both passenger cars and light to medium-duty trucks.
- Municipal vehicles: Finance your municipality-owned vehicle monthly or annually without paying disposal fees or security deposits.
3. Best Bad Credit Loans From a Credit Union - Digital Federal Credit Union
What We Like Most:
- Loans available for several vehicle types
- Membership perks
- Discounts for energy-efficient vehicles
Based in Massachusetts, the Digital Federal Credit Union (DCU) provides both consumer and business banking and lending services. With DCU, you can choose a plan from its long list of loan options depending on your situation and vehicle.
Who It's Best For- Current DCU members or relatives of DCU members
- Those employed by or members of eligible participating employers or organizations
- Residents of participating condominium communities
- Drivers of both new and used cars, including antique and classic cars, trucks, or vans
Who It's Not Best For- Non-DCU members
- Those without relatives who are DCU members
Available Loans
Digital Federal Credit Union offers both refinancing loans and purchase loans for different kinds of vehicles, including loans for RVs and motorcycles. Learn more about each type below:
| Loan type | Refinancing | Antique | Motorcycle | Boat | Mobility | Large RVs | Small RVs |
|---|---|---|---|---|---|---|---|
| Minimum APR | 4.99% | 9.24% | 7.25% | 9.99% | 9.24% | 9.99% | 10.85% |
| Payment terms in months | 36-84 | 36-84 | 36-60 | 60-180 | 36-120 | 60-180 | 36-60 |
Membership Benefits
To purchase an auto loan from DCU, you must be a basic member. However, there are two higher levels of membership that come with more perks:
| Membership level | Basic | Plus | Relationship |
|---|---|---|---|
| Free use of DCU branches in Massachusetts and New Hampshire | Yes | Yes | Yes |
| Free use of DCU digital banking | Yes | Yes | Yes |
| Free e-statements | Yes | Yes | Yes |
| No monthly maintenance fees or minimum balance | Yes | Yes | Yes |
| Access to early payments through direct deposits | No | Yes | Yes |
| Reimbursements for ATM fees of up to $10 a month | No | Yes | Yes |
| .5% discount on electronically-paid consumer loans | No | Yes | Yes |
| ATM reimbursements of up to $25 a month | No | No | Yes |
| Free DCU-customized checks | No | No | Yes |
FYI:
All DCU members who drive energy-efficient vehicles receive discounts of .25 percent off.
Calculator Tool
DCU’s website has a helpful calculator tool that uses your financing information ― your vehicle’s purchase price, down payment, and more ― to predict the following:
- Your loan payment
- How much you can afford to borrow
- Whether you should take a rebate or low-cost financing
- Whether you should pay off your vehicle loan early
- Whether you should accelerate your auto payments
- Whether you should refinance your vehicle loan
4. Best Online Bad Credit Loans - LendingTree
What We Like Most:
- Lowest APR options available
- Several lenders to choose from
- Highest loan amounts
As a loan aggregator, we found that LendingTree offers the lowest interest rates for auto loans, especially when it comes to those with poor credit. With LendingTree, you’ll be able to compare a variety of loan options from over 300 lenders, with interest rates as low as 5.49 percent for those with bad credit (scores of 580 and lower).4
Who It's Best For- Those with vehicles eight years old or newer, with 100,000 miles or fewer
- Those who wish to refinance their vehicles or buy their leased vehicles
- People who make at least $2,000 a month
- Those who want to compare multiple loan offers
Who It's Not Best For- Those with used vehicles over eight model years old or with over 100,000 miles
- Those who value 24-hour call support
Easy Online Loan Application
We love how fast customers receive loan offers from LendingTree by filling out one form, rather than multiple forms from different lenders. The form takes about five minutes to complete. First, you’ll identify your preferred loan term. Then, you’ll provide basic information about your vehicle and current loan, such as your:
- Vehicle make and model
- Mileage
- Current payoff amount
- Estimated credit score
Once you fill out this form, LendingTree will match you with up to five auto lenders with real quotes for you to compare.
Affordable Loans
Shop LendingTree’s extensive collection of low-cost purchase loans and refinancing loans. We’ve included the essential details about each type of loan below:
| Loan type | Refinance | Purchase |
|---|---|---|
| Minimum APR | 3.50% | 5.59% |
| Loan amount | $250 and above | $250 and above |
| Term length in months | 12-96 | 24-84 |
TIP:
LendingTree mentions that many of its providers provide discounted rates if you use a car-buying service or autopay. We suggest you look for various lenders’ discounts to compare what you’d pay each month.
High Loan Amounts
LendingTree’s abundance of auto lenders provides a number of options for the amount you can borrow. Depending on your circumstances, you may be able to borrow up to a maximum loan-to-value (LTV) ratio of 130 percent. LTV refers to your loan’s total dollar value divided by the cash value of your car.5 So, a maximum LTV of 130 percent would give you up to 25 percent more than your car’s value if you total it and need to buy a new vehicle.
LendingTree’s high LTV ratios are helpful since the value of your car depreciates over time. And, since there are often borrowing limits for those without strong credit histories, we value LendingTree’s range of amounts.
5. Best Bad Credit Loans for Used Cars - myAutoloan
What We Like Most:
- Low minimum credit score
- Loans for commercial vehicles
- Can buy out your lease
Typically, interest rates for used cars are higher than those for new cars, which means if you have substandard credit, you are at risk of paying exorbitant rates for your auto loan. MyAutoloan strives to match customers with affordable loans, regardless of their credit histories. Catering to customers with vehicles up to 10 years old and with credit scores as low as 575, myAutoloan uses your information to identify four loan offers for you to compare.
Who It's Best For- Those with FICO scores of at least 6005
- Drivers of vehicles up to 10 years old
- Those who make at least $2,000 per month
- Those who can afford minimum loan amounts of $8,000 for personal loans and lease buyouts and $5,000 for refinancing loans
Who It's Not Best For- Drivers of vehicles with over 125,000 miles
- Drivers of vehicles more than 10 years old
- Those with open bankruptcies
- Residents of Alaska and Hawaii
Diverse Loan Options
Like many other lenders and aggregators, myAutoloan offers a variety of auto loan types to fit the different needs of customers. Your exact loan amount and term will vary depending on your provider, along with your credit score and income. Here’s a breakdown of the starting interest rates and typical borrowing amounts for each loan type:
| Loan type | New | Used | Refinance | Private party | Lease buyout |
|---|---|---|---|---|---|
| Less than 36 months (minimum APR) | 6.49% | 6.74% | 5.49% | 6.49% | 6.24% |
| Up to 84 months (max APR) | 7.49% | 7.74% | 5.69% | 7.49% | 5.99% |
Use our auto loan calculator to estimate your monthly payments based on your loan term and interest rate.
Flexible Terms and Amounts
MyAutoloan has lenders that offer many different payment term lengths ranging from 24 to 84 months, so you can choose the amount of time that works best for you. A credit score is a factor that can increase your loan’s interest rate, and APRs for used cars are already higher than those for new cars.7 So, we appreciate myAutoloan’s range of lenders that offer extended terms for customers to pay back their loans.
Additionally, it’s important to note that myAutoloan requires you to borrow at least $8,000 for lease buyouts and purchase and private party loans. However, there is no set amount of money for a maximum borrowing amount. Take advantage of myAutoloan’s interest rate estimator tool and payment calculator to get the most realistic idea of how much you could save.
High Customer Satisfaction
As of May 2025, myAutoloan has 960 customer reviews on Trustpilot, many of which applaud the ease of the loan search and application with myAutoloan. The company has 3.6 out of five stars, which is strong compared to competitors. Many five- and four-star reviews note that myAutoloan representatives are readily available to answer questions and review loan options with customers. Customers also report satisfaction surrounding the quick online exchange of documents, plus fast approval times.
On top of that, myAutoloan holds a long-standing BBB accreditation since 2003, with an A+ rating. We also value its customer complaint response rate of 100 percent and its overall responsiveness to customer reviews.
Methodology
We identify the top five auto loans for those with bad credit by collecting and comparing essential information from an array of auto loan lenders and aggregators. We gather the following data points:
- Age of company
- Available discounts
- Average APR
- Credit score minimums
- Late payment charges and application fees
- Length of financial process
- Loan amounts
- Loan payment term lengths
- Maximum LTV ratio
- Maximum vehicle mileages
- Minimum applicant age
- Optional add-ons like gap insurance
- Services offered, such as personal loans, lease buyouts and refinancing
- State availability
- Vehicle availability and make/model restrictions
We also refer to trusted third-party reviewers, such as Trustpilot and the Better Business Bureau, to determine each company’s level of customer satisfaction.
Frequently Asked Questions
Yes, getting a car loan with very poor credit is possible. Many companies, including Ally, Digital Federal Credit Union, Oportun, and LendingTree, do not have a minimum credit score requirement and consider other elements like length of employment, amount of debt, and proof of stable income.
Yes, many auto lenders, like Carvana and LendingTree, approve people with poor credit scores of 500. Some companies, such as Oportun, do not require customers to provide credit histories for approval when applying for auto loans. However, if you want to avoid a higher interest rate when applying for a loan, improving your credit can help. That being said, many providers, including online lenders, offer auto loans for bad credit.
- Shop around for the right lender. If you have bad credit, consider companies like Ally, AUTOPAY, Carvana, and Oportun, which all offer loans to people with poor credit and do not require you to submit your credit history for approval.
- Fill out an online pre-approval form with basic personal, financial, and vehicle information. You’ll need to have certain information on hand, such as proof of income and, possibly, your Social Security number.
- Review and compare quotes to find the one that fits your budget.
- Complete a formal application for your loan and wait for approval.
- Receive approval and funds; the length of the financial process depends on your provider.
Citations
When Will New Car Prices Drop? Kelley Blue Book. (2025, May 16).
https://www.kbb.com/car-advice/when-will-car-prices-drop/Auto Refinance. Ally. (2025).
https://www.ally.com/auto/auto-refinance/Business Vehicle Financing. Ally. (2025).
https://www.ally.com/auto/business/Best auto loans for bad credit in 2025. LendingTree. (2025, Jun 2).
https://www.lendingtree.com/auto/bad-credit/What is a loan-to-value ratio in an auto loan? Consumer Financial Protection Bureau. (2024, Mar 7).
https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-in-an-auto-loan-en-769/How To Get An Offer. myAutoLoan. (2023).
https://www.myautoloan.com/general-guidelines.htmlHow Your Credit Score Affects Your Auto Loan Interest Rate. Arbor Financial Credit Union. (2022, Mar 14).
https://www.arborfcu.org/blog/how-your-credit-score-affects-your-auto-loan-inter
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