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QUICK SUMMARY
Bad credit does not disqualify you from a car loan in 2025. Rates will be higher than for prime borrowers, but the right lender and the right strategy can get you into a vehicle — and on a path to refinancing at a better rate within 12–18 months. LendingTree Auto is our top pick: one soft-pull form, multiple competing offers, and lenders who specialize in 500–620 scores.
The 6 Best Auto Loans for Bad Credit in 2025
LendingTree Auto
Why it ranks first: LendingTree Auto is a marketplace — not a single lender — meaning you fill out one form and receive competing offers from multiple lenders at once. That competition keeps rates honest and ensures you see the best offer available for your credit profile, not just the first offer. Works for new car purchases, used vehicles, private-party sales, and refinancing existing loans. Pre-qualification uses a soft pull with zero score impact.
- Compare multiple auto loan offers simultaneously
- New, used, and refinance loans all supported
- Lenders in network accept scores as low as ~500
- Soft pull pre-qualification — no credit score impact
- Loan terms from 24 to 84 months
- Available nationwide
AutoPay
AutoPay specializes in auto loan refinancing and new purchase loans. If you already have a high-rate car loan from when your credit was worse, AutoPay can potentially cut your monthly payment significantly. Minimum 580 score for most offers, with APRs starting at 2.99% for well-qualified applicants. Average savings for refinancers is $100+/month.
RefiJet
RefiJet is a dedicated auto loan refinancing platform accepting borrowers starting at 550. If you financed a vehicle at 18%+ and have made 12+ on-time payments, RefiJet can often drop your rate dramatically. Their team also assists with GAP insurance and extended warranties, making them a full refinancing solution.
myAutoloan
Min credit: 575 | New + used | Up to 4 lender offers in 4 minutes. myAutoloan surfaces up to 4 competing lenders per application and is particularly strong for used car purchases under $60,000. Accepts borrowers rebuilding from credit events including bankruptcy (discharged).
All Lenders Compared — Side by Side
| Lender | Min Credit | Loan Type | APR Range | Terms | Soft Pull | Best For |
|---|---|---|---|---|---|---|
| LendingTree Auto ⭐ | ~500 | New, used, refi | Varies | 24–84 mo | ✅ | Comparing multiple offers |
| AutoPay | 580 | Refi + purchase | 2.99%+ | Varies | ✅ | Lowering existing rate |
| RefiJet | 550 | Refinancing | Varies | Varies | ✅ | Refinancing, 550+ score |
| myAutoloan | 575 | New + used | Varies | 24–72 mo | ✅ | Used car purchases |
| Capital One Auto | 500 | New + used | Varies | 24–72 mo | ✅ | Brand recognition, 500+ score |
| Carvana Financing | None stated | Used only | Varies | 24–72 mo | ✅ | All-online, no dealership |
What Interest Rate Should You Expect With Bad Credit?
Auto loan rates in 2025 vary dramatically by credit score. Here is a realistic breakdown of what borrowers in each tier typically see:
| Credit Score | Category | Avg Rate — New Car | Avg Rate — Used Car | Monthly Payment on $20K/60mo |
|---|---|---|---|---|
| 300–500 | Deep subprime | ~14–20% | ~18–25% | ~$450–$530 |
| 501–600 | Subprime | ~10–14% | ~12–18% | ~$390–$450 |
| 601–660 | Near prime | ~7–10% | ~9–12% | ~$365–$395 |
| 661–780 | Prime | ~5–7% | ~6–9% | ~$345–$370 |
| 781+ | Super prime | ~3–5% | ~4–6% | ~$330–$350 |
The difference between a 500-score loan at 18% and a 620-score loan at 10% on a $20,000 vehicle over 60 months is roughly $4,500 in total interest. That is why building your score — even by 60–80 points — before buying makes a significant financial difference.
How to Get the Best Rate With Bad Credit — 6 Proven Strategies
1. Get pre-approved before stepping on a lot
This is the single most important thing you can do. Dealer finance departments earn profit from your loan — their job is to sell you the highest rate you will accept. Walking in with a pre-approval from LendingTree Auto gives you a baseline rate to beat. Many borrowers save 2–4% APR this way. Pre-approval takes 3–5 minutes and uses a soft pull.
2. Increase your down payment
Every dollar you put down reduces the lender’s risk. A 20% down payment on a $15,000 vehicle means the lender is only financing $12,000 — making approval easier and your rate lower. If you cannot put 20% down, even $1,000–$2,000 helps. Some programs specifically require a minimum down payment for bad credit borrowers (typically 10%).
3. Choose a used vehicle under $20,000
Lower-priced vehicles are easier to finance with bad credit because the loan-to-value risk is lower. A $12,000 2019 sedan is a far easier loan for a bad-credit borrower than a $38,000 new truck. You can always upgrade in 2–3 years once your score improves.
4. Add a creditworthy co-signer
A co-signer with a 680+ credit score can cut your rate by 6–12 percentage points in many cases. The co-signer is equally responsible for the loan — their credit is on the line if you miss payments. This is a significant ask, but the right co-signer dramatically changes your financial picture.
5. Shop during a rate-matching window
When you apply to multiple lenders within a 14-day window, credit bureaus typically count all auto loan inquiries as a single inquiry for scoring purposes. This means you can shop aggressively without compounding score damage. LendingTree’s single-form multi-lender comparison is built around this concept.
6. Consider the “get in now, refinance later” strategy
Accept the rate you can get today, make 12–18 months of on-time payments to improve your score, then refinance through AutoPay or RefiJet at a significantly lower rate. This is a proven strategy — many subprime borrowers drop from 18% to 8–10% within 18 months using this approach.
New Car vs. Used Car With Bad Credit
Most bad credit auto loan experts recommend used vehicles. Here is why:
- Lower purchase price — Less total to finance means smaller monthly payments and less risk
- Less depreciation exposure — New cars lose 15–20% of value in the first year; a bad credit loan on a depreciating asset creates negative equity risk quickly
- Easier approval — Lenders are more comfortable with a $12,000 used car loan than a $38,000 new car loan for a 550-score borrower
- CPO vehicles offer middle ground — Certified pre-owned vehicles (1–3 years old, manufacturer warranty) offer reliability close to new with pricing close to used
What Happens if You Are Turned Down?
If your application is declined, do not apply to multiple additional lenders in rapid succession — each hard inquiry costs you points. Instead:
- Ask the lender for the specific reason for denial (they are required to tell you)
- Check your credit report for errors at AnnualCreditReport.com — dispute any inaccuracies
- Wait 60–90 days, make all payments on time, reduce existing balances, then reapply
- Consider a co-signer for your next application
- Look at BHPH (buy here, pay here) dealers as a last resort — rates are high but they have no minimum credit score
Ready to see your real auto loan options?
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Takes 3–5 minutes · Won’t affect your credit score · No obligation