Car Loans for Bad Credit

Is bad credit holding you back from applying for a loan to finance your vehicle purchase? Do you fear loan rejections? Or have you had more rejections than you can keep count of? iPaydayLoans is here to help. We can connect you with lenders who consider bad credit and have high approval rates.

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Driving for a car-hailing service like Uber and Lyft can be highly rewarding for someone out of job or looking for a side hustle. But without a car, this dream is all building castles in the air. An auto loan can help you with enough cash to get a car. But your chances of getting one with bad credit from traditional lenders are quite frankly, very slim.

There are however lenders setup to finance people with bad credit. From these lenders, you can get car loans for bad credit. Alternatively, you can apply for a personal loan on iPaydayLoans to finance your car purchase and we can connect you with some reliable lenders in our network, with high approval rates.

What Is a Bad Credit Car Loan?

Bad credit car loans, also known as second-chance or subprime car loans, are just typical auto loans, but with higher interest rates. They are so-called because they are taken out by people with bad credit. You have bad credits if you have a FICO score of 579 and lower.

What Are the Benefits of Bad Credit Car Loans?

There are many benefits of taking out a bad credit car loan, some more obvious than others. One of its many benefits is that it is a good opportunity to improve your credit score and slowly acquire an asset while at it.

A bad credit auto loan gives you the opportunity to make consistent large payments over a long period. Each on-time payment made increases your credit ratings by a few points. Another is that they are typically approved quickly. You do not have to wait for days for an approval decision only to get rejected later.

Finally, the acceptance rate is quite high. Bad credit auto loans lenders have a high approval rate in general.

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I Have Bad Credit, Can I Apply for Auto Loans?

Yes, you can. But let’s revisit the basics first. Unless you have a FICO score less than 579, you are not considered bad credit. But what are your chances like when you have a bad credit score? Here’s it.

In addition to your credit score, lenders look at some parameters like income, payment history, length of employment, loan amount and amount owed up till that point. So, you still have a good chance of getting an auto loan if these other elements are in your favor and the only thing lacking is your credit score. However, bad credit can still handicap you in some way. For example, a lender may require a shorter loan term than you would have otherwise wanted.

Where Can I Get an Auto Loan With Bad Credit?

Banks and credit unions

Banks and credit unions are a good place to start. However, some banks may only provide auto loans through dealer-arranged financing. Some credit unions too might need you to be a member to qualify for its offerings. Financing from credit unions comes with lower interest rates.

Auto dealerships

Some car dealerships provide some form of financing option for car buyers. They may be either via partner banks and credit unions or in-house financing. In in-house financing, borrowers make direct payments to the dealer.

Online car retailers

Some online car retailers also offer financing for bad-credit borrowers. A major perk with online car retailers is that you can get used cars at a good price. Most of them have return policies and can take trade-ins. They may also provide doorstep shipping services.

Online loan marketplaces

Quick approval decisions is one of the biggest perks of taking advantage of online lenders or online marketplaces like iPaydayLoans, PersonalLoans, and BadCreditLoans. Marketplaces like iPaydayLoans in particular connect you with lenders within their network who can provide you with personal loans with comparatively low-cost rates to finance your auto purchase.

default imgWhy Us
How much can I borrow?$50-$35,000No hidden fees or charges
I have bad credit. Can I apply?YesBad credit is considered
Over how long can I spread the repayments?1-36 monthsFast decisions
Are credit checks involved?YesSoft credit checks only
Chances of getting approvalsGood256-bit encryption protocol
How to apply?Apply onlineEasy application
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How to Pick the Right Lenders

In trying to increase your odds of approval, and lower your cost of financing, it’s possible to sacrifice many other elements you should be looking at. Here are some of the most important things you should consider when picking a lender:

Rate discounts

Some lenders offer interest rate reduction programs for qualified borrowers, and you qualify for such programs by making payments on time. You can reduce your interest rate with a lender by up to 0.5% every quarter. That’s a reasonable saving you should consider.


Does the lender allow you to apply with a cosigner? Bringing on a cosigner to close a loan deal can help you renegotiate the interest rates on your loan. In other words, you attract lower interest rates when you apply with a cosigner. Your chances of approval are also higher.

Range of loan options

The wider the range of loan options the lender offers, the better. Some lenders offer new and used-car loans from participating dealerships. Some may even help with refinancing an auto loan you already got from a different lender entirely.

How Can I Increase My Chances of Getting Approved for Bad Credit Car Loans?

Look up your score

How can you improve a score you know nothing about in the first place? You can look up your score yourself to know your credit standing. Then, try to see if there are any errors in the calculations leading up to your credit score.

Settling repayments and everything loans are reported by your lender to the credit bureau and the latter have no way of verifying. Look carefully, and you may just find some error lurking somewhere.

Find a cosigner

Applying for a loan with a cosigner increases your credibility and makes you a lesser lending risk than someone without one. The cosigner will usually be held responsible if you fail to pay back. They will be required to pay back the loan too or take a big hit to their credit score if they don’t. Typically, a cosigner should be someone you trust, and who has good credit.

Use a personal loan

Another trick people try is getting a personal loan to buy a car. This car doesn’t have to be a fancy car or a lifeflong dream one. The target is getting a car you are the outright owner of. You don’t risk repossession when you are the outright owner of a vehicle. Also, since you own it, it’s counted as an asset rather than a liability. Owning this asset can help improve your standing for future car shopping.

Auto Loan Rates and Loan Terms Explained

Both APRs and loan terms are important elements to factor in when calculating the total cost of a loan. What are they and how do they affect the cost of the auto loan?


APRs, an acronym for annual percentage rates, are usually used by lenders to tell how much interest will be charged on the principal loan amount. It also includes other fees like processing and origination fees.

The APRs affect the size of monthly payments you make and how much you pay back over the life of the loan. Although APRs are clearly written on different lenders’ websites, they are not fixed. They may depend on the competition, market conditions, current interest rates, and the borrower’s credit history.

Loan Terms

The longer the loan term, the more time it takes to pay back the loan, and by extension, the smaller the monthly payments you have to make. If short, you make higher monthly payments.

Also, for the same APR, the longer the loan term, the higher the total cost of the loan. That is, you may end up paying more for a car over the life of the loan, with a particular APR than you would have to pay for the same APR if the loan term was shorter.


Can I get bad-credit car loans if I have a 500 credit score?

Yes, you can. However, searching out a lender is quite a job and you should be prepared to pay higher interest rates than usual. You can attract lower interest rates by choosing a shorter repayment period or making a bigger down payment. If you’re struggling to find a suitable lender, apply for the loan on iPaydayLoans. We have a handful of lenders who can help you in our network.

What Information is required to apply for auto loans for bad credit?

During the application process, you may need to supply the following - your full name, contact address, phone number, credit score, gross annual income information, social security number, and more.

How to compare the loan offers?

The key is to find a reliable lender with the least interest rate possible, a convenient payment method, relaxed loan conditions, and reports early payments to the major credit bureaus.

Will I pay more if I have bad credits?

Yes, you may. Since borrowers with bad credit are considered a lending risk, lenders tend to compensate for this risk by charging higher interest rates, and sometimes, more fees. Bad credit auto loans are usually more expensive than regular auto and car loans.

How can I improve my credit score?

Bad credit isn’t all doom and gloom. You can still boost your credit ratings by opening a credit card, monitoring your credit, checking your report, consolidating debts, increasing your credit limits, and paying off existing debts. However, you must note that getting back into the good or excellent credit category cannot be achieved overnight. It needs time and consistency with early payments.

Will a bad credit auto loan impact my credit score?

Yes, it can. Both in positive and negative ways. Paying early can improve your credit ratings by a few points while your credit score may take a hit if you miss a payment deadline. Payment history can take up as much as 35% of your credit score. Also, multiple hard credit inquiries during application can hurt your credit score.

What happens if I can't keep up my repayments?

A number of things can result from missing payment deadlines. To begin with, your credit score can take a hit. You may also be charged default payment fees or see an increase in the interest rate. If all efforts to get the cash proves unfruitful, the lender can repossess the vehicle. Therefore, if you foresee defaulting on payment, it’s best to contact the lender and inform them ahead of time.

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iPaydayLoans Can Help You Secure A Loan Without Fuss

Do not get too comfortable with loan rejections or take them as normal. Yes, you may have bad credit. but you shouldn’t face that many rejections. iPaydayLoans can help you secure a loan right away by connecting you with the right people. The application process is completely straightforward and simple to get through.

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iPaydayLoans is a company committed to connecting borrowers to hundreds of reputable online lenders to apply and get small-dollar payday loans quickly, easily, and securely, helping cope with life emergencies like paying medical bills, home, or car repairs, and so on.

Customer Note: A payday loan is traditionally used to help people borrow a small sum of money until the next upcoming payday. It's a short-term solution to cover unexpected expenses when people have no savings or deep pockets. Those who find themselves in a bind with their budget and want to refill it with credits should seek the advice of a professional financial assistant. A borrower also has to peruse local regulations related to a payday loan.

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NOT A LENDER Disclosure: iPaydayLoans is not a lender but a broker and does not charge you any fees for our broker services. The lenders or other broker services we introduce to our customers through this website may pay us commissions if customers enter into a credit agreement with them.

Disclaimer: iPaydayLoans is not a lender, does not take applications or make loans or credit decisions. We are not an agent, representative or broker of any lender. We provide a service to connect you to a lender from our network. We do not control and are not responsible for any lender's actions or decisions.