Bad Credit Car Loans: Best Subprime Lenders (2022)

There is a time in everyone’s life when they may want to buy a car. Home ownership is not always possible when first starting out, so a car might be the next best thing. Cars are expensive, however, and not everyone has the money saved up to pay for one outright. Some people take out loans to pay for their car, but in order to do that lenders will check your credit history.

So, what happens when you have no credit whatsoever?

Do You Need a Credit Card to Buy a Car

If your line of credit is strong, you may be able to finance your loan with a credit card. However, credit cards often have high interest rates, so you could end up paying a third of the cost of the car in interest. Many people prefer to take out loans instead of using credit cards for this reason.

If you can find a personal lender who is willing to give you a car loan without looking at your credit history, then you technically don’t need a credit card. The credit card company won’t need your credit history in order to give you the loan.

6 Options to Explore Before Getting a Car Loan

If you want to increase your chances of qualifying for a car loan, there are a few things you can do. First, make sure you have a good credit score. Second, try to get a cosigner with good credit. Third, save up for a down payment. Well, here are some tips that you might want to follow:

  • Get a Co-signer
  • Tap Alternative Credit Data
  • Consider Dealer Financing
  • Consider Community Banks and Credit Unions
  • Use Marketplace Loans
  • Tap Your Retirement Account

The following options are discussed in more detail below.

Get A Co-signer

If you go to a bank or another lending institution by yourself, with no credit history and no one to guarantee that you will actually pay your debts, you are very likely to be rejected and the doors (figuratively) shut in front of you.

If you are accompanied by a co-signer when you approach a lender, you will be more likely to be approved for a loan and have more favorable terms. This is because the co-signer’s credit history will be taken into account, making you seem more reliable. Also, the lender will see the co-signer as someone to hold responsible in case you decide not to make loan payments.

You need to be careful if you decide to get a co-signer because your actions will affect them in the long run too. For example, if you default on your loan, they will have to make the payments for you. Plus, every time you make a late payment or miss one, it will go on their credit score – not just yours.

This means that if you are going to get a co-signer, you should make sure you have the money to pay for the car payments when they are due.

Tap Alternative Credit Data

All of these things can help you create a good credit history. If you don’t have a credit card or mortgage, you might not have anything to help you build your credit history. However, things like your checking account, utility bills, cell phone, and rent can all help you establish a good credit history.

If the usual proof of your ability to repay loans on time is not available, lenders can use other methods to show this. They can use credit scoring formulas like the FICO score XD.

The good news is that there are some lenders who will use an alternative credit score model. However, you might have to do some research to find the right one for you. In some cases, you might want to look into personal loans instead of car loans. These usually have more flexible terms and better interest rates.

Consider Dealer Financing

Car dealers that are willing to give loans to people with bad credit tend to work with special finance lenders. You’ve probably seen the ads everywhere: “No credit? No problem.” So, if you’re a buyer with bad or no credit, can you still get a loan from your average car dealer? That mostly depends on the dealer. Car dealers that are willing to give loans to people with bad credit usually work with special finance lenders.

If you’re interested in financing from a reputable dealership, it’s worth contacting the financing manager and asking for more information about the loan.

Can a person with no credit get a loan to buy a car? If so, what would they need from the person to give them the loan? It may be their job history, or maybe a co-signer. If they can give the dealer what they ask, they may be able to get a good deal. The right dealer might also hook them up with some good car insurance.

Consider Community Banks and Credit Unions

If you have trouble getting a loan from a large bank, you may have more luck with a credit union or small community bank. Some lenders have programs for first-time buyers that may be willing to give you a loan with little to no credit.

The company may be interested in other things besides your credit score when you apply for a loan. Things like job stability, your pay stubs, and monthly utility payments may be looked at. If they find these aspects of your life to be in good standing, you may be able to get a loan.

Marketplace Loans

Currently, there are markets for nearly everything, including loans. In this instance, you would be working with a broker. This individual would analyze your financial data and present your terms to potential sponsors. They would then decide whether to grant you the loan or not based on the data received from the broker.

Tapping Your Retirement Account

If you have saved money in a retirement account but have no credit, you may be able to borrow money from the account to buy a car. While it’s not ideal to dip into retirement savings, if you are able to pay the money back as you have promised yourself, it shouldn’t be a problem. Taking this route also means that you won’t have to answer questions about your credit history or employment.

While some retirement accounts may not have any fees for borrowing, others may have penalties and fees. Be sure to read the fine print before proceeding.

Depending on how much you have saved up, there may be a limit to how much you can borrow – just as with a 401(k) retirement plan. So you may want to make sure that the amount you get from the car loan can cover the amount you need.

No-Credit-Check Auto Loans for Bad Credit

These three lending services facilitate loans for people with bad credit. All three are reputable companies that will work with you to get you an auto loan even when you have bad credit or no credit at all. If your credit history includes collections, bankruptcy or repossessions, these companies can still make it possible for you to get an automobile loan.

  • Network of dealer partners has closed $1 billion in bad credit auto loans
  • Specializes in bad credit, no credit, bankruptcy and repossession
  • In business since 1999
  • Easy, 30-second pre-qualification form
  • Bad credit applicants must have $1500/month income to qualify

In order to pre-qualify for a no-credit-check loan from Auto Credit Express, you must enter your credit profile, monthly income, rent or mortgage payments, credit card and loan payments, and any garnishments into the system. This process should only take around 30 seconds.

After you input some basic information, you will receive an estimated approval amount for the loan. Bad-credit applicants must make at least $1,500 per month to qualify.

Auto Credit Express helps people with bad credit get auto loans by matching them with dealers and lenders who are willing to work with them. It is a part of the Internet Brands automotive group and has helped people get $1 billion in loans since it started in 1999.

  • Free, no-obligation application
  • Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
  • Affordable payments and no application fees
  • Same-day approval available
  • Connects 1000’s of car buyers a day with auto financing can help you get a loan for your car even if you have bad credit or no credit, and even if you have filed for bankruptcy. Just complete the no-obligation loan request form, which will only take you three minutes. allows you to find a no-credit-check auto loan by connecting you with lenders and dealers in its partner network. The service is free to use, and you can get approved for a loan the same day.

  • Loans for new, used, and refinancing
  • Queries a national network of lenders
  • Bad credit OK
  • Get up to 4 offers in minutes
  • Receive online loan certificate or check within 24 hours will match you with up to four loan offers from members of its extensive lender and dealer network. You can apply for a new or used car loan, refinancing, a lease buyout, or financing for a private-party purchase – all from the comfort of your own home.

This website is unique in that it displays the lowest current auto loan rates and provides an interest rate estimator and payment calculator. You can get an approval within minutes and an online loan certificate or check within 24 hours.

How to Qualify for a No-Credit-Check Auto Loan

To increase your chances of qualifying for a no-credit-check auto loan, you should have a high income, a cosigner, and a down payment.

  1. Show adequate monthly income: Typically, lenders have minimum requirements for monthly income. It can be any mix of wages, Social Security benefits, alimony or child support, disability payments, state assistance, and so forth. The lender may set a maximum debt-to-income (DTI) ratio (i.e., monthly debt payment divided by gross income). A lower DTI helps improve your creditworthiness and facilitates a loan, even a no-credit-check loan.
  2. Make a large down payment: The more money you put down, the less you need to borrow. Furthermore, you’ll have more equity invested in your automobile, meaning you have greater motivation to avoid repossession. Lenders take your down payment into consideration when underwriting your loan and assigning you an interest rate.
  3. Use a co-signer. A co-signer with strong credit will greatly facilitate loan approval. A co-signer is responsible for making the monthly loan repayments if you fail to do so. Keep in mind you will be putting your relationship with your co-signer on the line. Therefore, let the co-signer know as early as possible if you are having trouble making payments.
  4. Pledge additional collateral. While the car you buy serves as collateral for the loan, you can improve your loan approval chances if you can pledge additional collateral to the lender. Good candidates include your home equity, cash in a savings account or certificate of deposit, stocks, bonds, and other assets. Lenders view secured loans as much safer than loans that are unsecured, making it easier to gain approval and receive a lower interest rate. Bear in mind that you will be putting your assets at risk if you default on your loan payments.

You should be able to get your auto loan more easily by using some or all of these strategies.

What is the Best Auto Loan Company for Bad Credit?

A loan matching service is different from a direct lender in that the former does not have a say in whether any direct lending partners will offer you a loan, and if they do, what rates and terms will apply. The three reviewed loan matching services simply facilitate the connection between you and the lender.

When choosing a loan matching service, look for characteristics that indicate honesty and effectiveness, such as:

  • Length of time in business: A company that has been operating for many years has withstood the test of time. A shady or ineffective lending service would likely lose out to more reliable competitors. Even the youngest of the services we reviewed,, has been operating since 2003.
  • Volume of business: Look for how much loan money the lending service has facilitated over its lifetime. Both Auto Credit Express and report closing $1 billion in auto loan volume.
  • Ratings: Check the website for an A+ rating from the Better Business Bureau and/or an excellent rating from Trustpilot.

We evaluate these and other factors in our reviews.

The loan isn’t just an opportunity to get back on the road–it’s also a chance to raise your credit score. If you make your payments on time, you’ll improve your credit score. That will make it easier and cheaper to get credit when you’re ready to trade in your car.


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