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Last updated: June 26, 2023The Best Auto Loans for Bad Credit
Learn where to get the most affordable rates, even without perfect credit.
Best Overall
Oportun promotes financial health by giving customers a choice between loan types (secure vs. unsecured personal loans), loan terms and amounts.
Best Bad Credit Car Loan From a Bank
With a wide range of payment term options for buying and leasing vehicles, you’ll find affordable rates and savings of about $129 a month if you enroll with Ally.
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People with bad credit have more difficulty getting approved and finding reasonable interest rates for auto financing. However, many companies believe your credit score shouldn’t stand in the way of your ability to borrow money for your car. We’ve picked the top five auto lenders available for drivers, regardless of their bad credit history.
The Best Auto Loans
- 1.
Best Overall: Oportun
- 2.
Best Bad Credit Loans From a Bank: Ally
- 3.
Best Bad Credit Loans From a Credit Union: Digital Federal Credit Union
- 4.
Best Online Bad Credit Loans: LendingTree
- 5.
Best Bad Credit Loans for Used Cars: myAutoloan
Comparison of the Best Auto Loans for Bad Credit of 2023
| Auto loan provider | Category | Minimum credit score | Trustpilot rating (out of 5) | Better Business Bureau accreditation? | Better Business Bureau rating |
|---|---|---|---|---|---|
| Oportun | Overall | None | 4.8 | Yes | A+ |
| Ally | Bank | None | 1.2 | No | Not rated |
| Digital Federal Credit Union | Credit union | None | 1.9 | No | A+ |
| LendingTree | Online | None | 4.5 | Yes | A+ |
| myAutoloan | Used cars | 575 | 4.1 | Yes | A+ |
Detailed List of the Best Auto Loans for Bad Credit
1. Best Overall - Oportun
What We Like Most:
- Available for a variety of vehicle makes, from Acura to Volvo
- Covers vehicles of up to 25 years old with a maximum of 250,000 miles
- No minimum credit score
If you’re looking for an easy and affordable way to finance your vehicle, you may find the best loans from Oportun. With flexible term lengths from 12 to 48 months and loan amounts up to $10,000, Oportun customers can apply online and receive funds on the same day.
Who It's Best For- Those with used cars up to 25 years old
- Those with cars with less than 250,000 miles
- Residents of Arizona, California, Florida, New Jersey and Texas (eligible for both personal and secured personal loans)
- Those who have filed for bankruptcy
Who It's Not Best For
People who do not own their cars (no lease buyouts)- Those with vehicles more than 25 years old or with mileages over 250,000
- Drivers of classic, exotic and electric vehicles
- Those who drive commercial or for-hire vehicles
No Credit Score Requirement
Oportun does not require you to provide your credit history for approval, which is why we’ve chosen it as the overall best auto lender for people with bad credit. When you formally apply for a personal loan, Oportun will collect the following information:
- Government-issued ID
- Proof of address, such as gas and electricity bills
- Proof of income, such as pay stubs or W-2s
- Employer’s contact information
- List of your recurring monthly debt payments
Strong Third-Party Ratings
With over 6,000 customer reviews and a score of 4.8 out of five stars on Trustpilot, Oportun is well-regarded among customers around the world.1 Many five-star reviews note quality, consistent communication from customer service representatives and a speedy financial process.
Oportun also holds BBB accreditation since 2016 and maintains an A+ rating as of January 2023. Oportun’s 2.35 rating out of five stars may seem concerning, but most complaints surround payment system errors and late fees, to which Oportun representatives meet with responsiveness.2
Digit App
Oportun acquired the Digit mobile app in December 2021, enabling its customers to use the digital banking platform to save, invest and manage their loans quickly. The app is rated highly among users and has, as of January 2023, 4.7 out of five stars on the App Store and 4.5 out of five stars on the Google Play store.
The Digit app offers a free 30-day trial and charges $5 a month after that. However, if you buy a personal loan from Oportun, you’ll get a free one-year subscription. If you haven’t yet borrowed from Oportun, you’ll get six months free by simply visiting its website.
Digit links with your bank account to help customers:
- Set up specific savings goals
- Assist with budgeting and investing
- Reduce overdraft fees
- Withdraw money
- Save an average of $3,000 per year
NAME CHANGE:
The mobile app’s name will soon change from Digit to its acquirer’s name, Oportun.3
2. Best Bad Credit Loans From a Bank - Ally
What We Like Most:
- More than 100 years in business
- Average monthly savings is $119
- No down payment required
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 Nevada, Vermont and Washington, D.C., or those who want to refinance their loans and live in Alaska, Florida, Iowa, Indiana, Kansas, Massachusetts, Maine, Minnesota, Nevada, South Dakota, Vermont, Wisconsin 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 $129 a month and make up a total interest savings amount of $2,526. 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 $1,000 to $300,000
- 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.4 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.
- Heavy duty truck: Finance a new or used Class 8 truck up to six years old with 700,000 miles or fewer.
- 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:
- 3.24 percent minimum APR
- Discounts for electronic payments and energy-efficient vehicles
- No down payment and no payments required for the first 60 days
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 | 5.24% | 7.74% | 6.75% | 9.49% | 7.74% | 9.49% | 10.35% |
| 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 minimum APR of 0.99 percent
- Loan amounts of up to $4 million, depending on provider
- Refinancing available
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 2.70 percent for those with bad credit (scores of 619 and lower).5
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 loans 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 | 1% | 4.75% |
| Loan amount | $5,000-$150,000 | $500 and above |
| Term length in months | 12-96 | 12-96 |
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 $4 million or a maximum loan-to-value (LTV) ratio of 125 percent. LTV refers to your loan’s total dollar value divided by the cash value of your car.6 So, a maximum LTV of 125 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:
- APRs as low as 1.90 percent
- Not all lenders require down payments
- No minimum credit score
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 5757
- 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 |
|---|---|---|---|---|---|
| Minimum APR | 2.69% | 2.94% | 2.49% | 3.99% | 2.49% |
| Loan amount | $5,000-$100,000 | $5,000-$100,000 | $5,000-$100,000 | $5,000-$100,000 | $8,000-$100,000 |
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.8 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 January 2023, myAutoloan has over 840 customer reviews on Trustpilot, many of which applaud the ease of the loan search and application with myAutoloan. The company has 4.1 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
Can I get a car loan with very poor credit?
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.
Can I get a car loan with a credit score of 500?
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.
How can I get a personal loan with bad credit as soon as possible?
- 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
Oportun. Trustpilot. (2023).
https://www.trustpilot.com/review/oportun.comOportun, Inc. Better Business Bureau. (2023).
https://www.bbb.org/us/ca/san-carlos/profile/loans/oportun-inc-1116-384053/customer-reviewsA new chapter with Oportun. Digit Blog. (2022, Oct 27).
https://blog.digit.co/2022/10/27/a-new-chapter-with-oportun.htmlBusiness Vehicle Financing. Ally. (2023).
https://www.ally.com/auto/business/Best auto loans for bad credit in 2023. LendingTree. (2023, Jan 30).
https://www.lendingtree.com/auto/bad-credit/What is a loan-to-value ratio in an auto loan? Consumer Financial Protection Bureau. (2020, Sep 9).
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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