How to get a car loan with bad credit

Less than 16% of borrowers have scores of 600 or less, and the average interest rates for this group are 22%, according to Experian data.

Shop around to find the best deal on an auto loan for your budget and credit profile, but be prepared for limited loan options and high costs.

If approved, an auto loan can help improve your credit — provided you keep up with the loan and make on-time payments.

A car loan for bad credit is a risky and challenging endeavor. It's hard to get approved if you have a low credit score. Less than 16% of borrowers with a car loan had have a score of 600 or lower at the beginning of 2026, according to Experian data . Further, you'll likely face prohibitively high interest rates. To compare, the average used car loan rate for someone with a score of 781 or higher is a little over 6%, while a borrower with a score of under 500 gets a rate of almost 22% on average.

For that reason, it's best to work on your credit before you buy a car. But if the purchase can't wait, make sure to look for a competitive auto loan rather than settling for a high-cost offer from a buy-here, pay-here dealer. With a little legwork, you can find the best bad credit car loans for your financial situation.

Yes, it's tougher than with better credit. But the good news is that research, saving for a down payment and getting preapproved may help you qualify for a competitive auto loan.

Before you shop for financing, check your credit score. According to the FICO automotive credit scoring system, which ranges from 250 to 900, scores below 600 are considered subprime. If you fall into this category, it can be challenging to secure an auto loan with competitive terms, and you could be denied if your score is too low.

Because auto loans lenders use your credit score as a primary way to judge eligibility, the rate you qualify for will depend on where you fall — a near prime borrower will see much lower rates (and a higher chance of approval) than a borrower in the deep subprime range.

Check your credit score three to six months ahead of applying to give yourself time to shop around for lenders. That way, you can start searching for lenders that offer the best rates for people in your credit range. Repairing your credit score before you apply will also put you in a more favorable position with lenders.