Best Subprime Auto Lenders

In this article, we will highlight our top picks for the best subprime auto lenders. We will also define what a subprime auto loan is, the rates you can expect as a bad credit borrower, and places you can find financing. Some methods to increase your chances of getting approved and finding lower rates will be provided as well. As with all companies that offer vehicle financing, we recommend comparing multiple loan offers before making a decision.

Best Subprime Auto Loans

In our review of auto loan lenders, we found subprime auto loan lenders that set low minimum credit scores and income requirements. These bad credit auto loan providers also have received standout customer reviews and have a variety of convenient services for your needs. Below we highlight some important information about our top four picks for the best subprime car loans:

Subprime Car Loan Company	Best For	Minimum Credit Score	Minimum Annual Income
1. Auto Credit Express	Best for Bad Credit	No minimum	$18,000
2. myAutoloan	Best Auto Loan Marketplace	575	$21,600 (purchase) $18,000 (refinance)
3. Auto Approve	Best for Refinancing	600	$18,000
4. Capital One	Best Prequalification Process	No minimum	$18,000

Best Subprime Lenders for Auto Loans

In the following sections, we detail our picks for the best subprime auto lenders, their requirements for financing, and what sets them apart from other bad credit car loan providers.

#1 Auto Credit Express: Best For Bad Credit

Type of Company: Online Auto Loan Broker

Required Credit Score: No Minimum

Prequalification: Not Offered

Preapproval: Not Offered

Like most of the lenders on our list, Auto Credit Express connects drivers with auto loan companies online instead of offering its own vehicle financing. Once you put in an application, soon after you will be contacted by different dealerships that work with poor credit borrowers. Then you are able to compare options and see which offers the best deal for your situation.

People with bad credit can find auto loans for new or used cars through Auto Credit Express, as well as options for refinancing or leasing. Many of these auto loans will often have low down payment requirements which can make it easier to get approved if you have poor credit. Because of its broad availability and relatively low standards for approval, we named Auto Credit Express Best for Bad Credit.

Auto Credit Express Reviews

Auto Credit Express shows that it has a superior customer experience through its glowing reviews. On Trustpilot, the subprime lending company has a rating of 4.5  out of 5.0 stars from over 3,300 customers. Most people that used their bad credit loan service talk about how easy and fast the process was for matching them with a lender. Reviews also often spoke about how helpful representatives were at finding affordable options for their clients.

Auto Credit Express Pros and Cons

Auto Credit Express Pros	Auto Credit Express Cons
Easy to compare providers’ rates	Not an actual auto lender
No minimum FICO® credit score
Offers financing during bankruptcy

#2 myAutoloan: Best Auto Loan Marketplace

Type of Company: Online Auto Loan Broker

Required Credit Score: 575

Prequalification: Offered

Preapproval: Offered

Those seeking an exceptional vehicle financing marketplace should consider myAutoloan. As we mentioned, the company connects car buyers with lenders instead of offering its own loans. The company also offers prequalification services so you can see offers without having a hard pull that can lower your credit score.

Compared to our other picks for the top bad credit car loan providers, myAutoloan has slightly higher minimum requirements. However, the online loan service sports some of the lowest rates on the market and offers a wide variety of car financing services. You can also compare up to four lenders at a time per application which makes it easier to weigh your options and get the best deal.

myAutoloan Reviews

myAutoloan has a stellar customer rating of 4.3 out of 5.0 stars from over 750 reviews on Trustpilot. They are also accredited by the BBB and overall have a great service record with all of their clients regardless of credit ratings. 

myAutoloan Pros and Cons

myAutoloan Pros	myAutoloan Cons
Outstanding customer service scores	Higher credit and income requirements than some providers
Easy to compare loan offers
Plenty of financing options

#3 Auto Approve: Best For Refinancing

Type of Company: Online Auto Loan Broker

Required Credit Score: 600

Prequalification: Offered

Preapproval: Offered

Auto Approve is well worth a look for those hoping to refinance a car loan with bad credit. You’ll likely get a steep rate when you finance a car with bad credit, but it’s easier to get competitive interest rates by refinancing once you’ve paid off some of the balance of your original auto loan.

This online lender also has some of the lowest rates compared to the market average and is also one of our picks for the best auto refinance companies. The provder also gives you the perk of being paired with a personal consultant that will help you along your application journey. When you apply for a loan, your credit also will not be affected and you can compare multiple offers without worry.

Auto Approve Reviews

Borrowers appreciate Auto Approve for its great customer service. The auto refinancing marketplace earns 4.7 out of 5.0 stars from over 6,000 customers on Trustpilot, making it one of the industry’s top performers. The company is also accredited by the Better Business Bureau and has an A+  rating from the organization.

Auto Approve Pros and Cons

Auto Approve Pros	Auto Approve Cons
High customer satisfaction	Only offers vehicle refinancing
Partners with a network of lenders
Works with borrowers who have bad credit

#4 Capital One: Best Bank For Bad Credit

Type of Company: Traditional Bank

Required Credit Score: No Minimum

Prequalification: Offered

Preapproval: Not Offered

While you may not expect large companies such as Capital One to offer auto loans for bad credit, the provider is worth consideration. Capital One doesn’t have a minimum credit score requirement, so even drivers with relatively poor credit history may prequalify for a loan.

Borrowers can finance new or used cars or refinance their existing auto loans through Capital One. Keep in mind that Capital One car loans are only available if you purchase a vehicle from a qualifying dealership, and the company doesn’t offer loan preapproval.

Capital One Reviews

Capital One reviews overall are negative, but most of these are related to their general banking services and not financing-related services so it is hard to pin down. For the most part, it seems like there is mixed reception for their customer service and loan options overall. However, their app is highly rated with 4.8  on Google Play and 4.7 out of  5.0 stars for their easy banking and financial management services.

Capital One Pros and Cons

Capital One Pros	Capital One Cons
No minimum FICO credit score	No preapproval process
Plenty of car financing options	Only works with certain dealerships
Backed by a large provider	Mixed customer service experiences

What to Know About Subprime Auto Loans and Lenders

There is a lot to take in when it comes to subprime car financing. To help make it digestible, we’ve broken down what a subprime auto loan is, how to get one, what types of lenders are available, and some methods to increase your chances of approval. We’ll also provide interest rates for bad credit car loans so you can know what APRs to expect when financing.

What Is a Subprime Auto Loan?

Subprime auto loans are car loans that are offered to those with bad credit scores, usually under 600, and people with limited or no credit histories. These vehicle loans typically come with the highest interest rates due to the risk a subprime borrower poses to the lender. They also can come with various fees and prepayment penalties.

Where To Get Subprime Auto Loans

Even if you have bad credit it is still possible to get a car loan.  While it’s possible to get an offer when financing a car with credit scores this low, loan applicants in this range are more likely to be rejected. Borrowers sometimes have difficulty finding subprime car loans because many leading car finance companies avoid those with below-average credit. 

However, due to this, a space in the market has developed for bad credit auto loan providers allowing those with poor credit the ability to finance a vehicle. There has been an increase in mostly online vehicle lenders that specialize in helping those with low credit scores. Some auto loan providers even have specific departments to help with bad credit car financing.

Below are your main options when looking for a subprime auto loan:

• Banks: Traditional banks can offer some good services for those with bad credit, but typically they have higher credit and income requirements compared to most lenders. While it may not be the best option, it is best to search around since some have few to no minimums and are willing to work with you.
• Credit Unions: Compared to banks, credit unions are much more able to get you approved for bad credit car loans. These types of financial institutions tend to come with competitive rates as well as fewer fees for financing ventures, but you must be a member.
• Online Providers: Getting an auto loan with bad credit through an online loan provider can be a convenient and easy option to apply for and get a great loan deal. Also, some of these lender marketplaces specialize in helping those with low credit scores and offer tailored services for low-credit borrowers.
• Dealers: You may be able to find luck with a dealer through their lender network if you are considering buying a new or used car with bad credit. However, out of all of the options they are the most limited in terms of services.
• Guaranteed Approval Dealerships: Through this type of lender it is possible to get approved and drive off with the car you want within the same day. While this kind of option sounds enticing, these dealers offer loans with the highest rates on the market and offer unfavorable terms along with high fees. They are also called buy here pay here dealerships, so if you hear of this type of dealer, stay away.

How To Get The Best Subprime Auto Loans

Below are our recommended best steps you should take for getting approved for an auto loan with bad credit:

1. Check Your Credit Score

Before you begin comparing your options for bad credit car loans, you should check your credit score. Typically, credit scores used by lenders include the FICO and VantageScore models which range from 300-850. This will allow you to set expectations when searching for an auto loan with bad credit and help you determine whether you are getting a good deal when comparing providers.

You should also review your credit report to check for any inaccuracies that may be lowering your score. Companies such as Experian and Equifax can provide you with a free credit report so you can make sure your credit information is correct. You can also request one credit report yearly from all credit bureaus from annualcreditreport.com.

2. Know Your Income and Outstanding Debts

Even with low credit scores lending companies will take into account your monthly income and debts to see if you can make auto loan payments. This information will be used to help determine the rates you receive, any fees associated with the loan, and the down payment they will require. Knowing both your income and your debt against each other can help gauge what you can afford and see how likely you will be to get approved for a loan.

3. Save up for a Down Payment

If you have a low credit score, a larger down payment can increase your chances of getting a car loan with bad credit. The more money you put down before beginning a bad credit car loan, the less risk the lender faces. You’ll be much more likely to be approved if you cover a significant down payment for your new vehicle, whether with money or a trade-in vehicle.

It’s recommended by financial experts that you put down a minimum of 20% of the car’s value.  However, if you can’t afford this, some auto financing lenders will accept down payments as low as $1,000.

4. Determine What You Can Afford

You should consider whether you want a new or used car, and determine whether you can afford a sizable down payment and monthly payments with a bad credit score. Getting a used car is typically cheaper and can help you keep more money in your pocket. It should be noted getting a bad credit car loan for that older vehicles to tend to come with the highest interest rates, but you’ll most likely end up paying less overall.

In addition, your vehicle loan term should be considered when searching for a car loan with bad credit. Even though a longer loan term can secure lower monthly payments, you may end up paying more in interest over time. We suggest using an auto loan calculator to help you compare different loan terms and see what rates you might receive from lenders.

You should also consider more than just auto loan terms when purchasing a vehicle with bad credit. There are other costs that come with car ownership like fuel expenses, car insurance, vehicle maintenance, and taxes to take into account.

5. Apply for Loan Prequalification and Preapproval

To give you the best chance to get approved for an auto loan with bad credit, you should consider applying for prequalification and preapproval. Each method allows you to get loan offers on the spot, allowing you to compare lenders. The terms are often used interchangeably, but there are key differences. Below we will lay out what it means to prequalify and get preapproval for an auto loan:

• Prequalification: When you prequalify for vehicle financing, a lender gives you an estimate of what your interest rate could be. This method involves a soft credit check which does not include a full appraisal of your credit report. Due to this, any offers given are provisional and are not completely guaranteed.
• Preapproval: Preapproval is typically more useful since it nearly guarantees financing from a car loan company and requires a hard credit check. However, preapproval can hurt your credit score so it is best to consider this before getting an auto loan offer with this method.

6. Compare Auto Loan Providers

Comparing providers can help you find the best deals for auto loans for bad credit. Applying for any vehicle loan can be done through various banks, credit unions, online lenders, and dealerships. You have a better chance of getting approved if you focus your search on auto financing companies that specialize in bad credit car loans. Also, look for companies with low income and credit minimums to increase your chances.

Regardless of which bad credit loan provider you pick, expect to pay a relatively high annual percentage rate (APR), which is the combination of the interest rate and any added fees. However, offers will vary from many of these lenders, so make sure to apply for as many as possible so you can compare in order and get the best possible terms for your situation.

How to Get Approved for Subprime Auto Loans

Below are four tips to help you get the cheapest auto loans with bad credit:

• Look for cars you can afford: Only look for vehicles you’ll be able to pay off, as this could make you appear less risky in the eyes of auto lenders. However, while used vehicles tend to be cheaper, they typically come with higher APRs.
• Get a Loan Co-signer: Adding a co-signer to a bad credit car loan means another person promises to pay the lender if you default. Since this reduces the risk to vehicle financing providers, it makes you much more likely to find loan approval and get lower rates.
• Improve Your Credit Score: You can increase your credit score over time by reducing your debt and building a solid payment history on your credit report. The higher your credit score gets, the lower your interest rates will be for a vehicle loan.
• Consider Credit Unions: Some borrowers with bad credit find luck getting car financing through credit unions such as PenFed. This is because credit unions often have less strict credit requirements than banks.

Subprime Auto Loan Rates

Currently, average auto loan interest rates for those with subprime or deep subprime credit scores range from 11.53% to 14.08% for new cars and 18.55% to 21.32% for used vehicles.  Your credit score is a major determining factor in what rates you get, and those with bad credit get the highest rates.  The interest rates you get with bad credit depend mainly on how low of a score you have and whether you are financing a new or used vehicle. 

Average Auto Loan Rates by Credit Score

Below is data on the average interest rates for borrowers from super prime to bad credit score ranges from Experian’s Q1 2023 State of the Automotive Finance Market report:

Credit Score	Average Interest Rate for New Cars	Average Interest Rate for Used Cars
781–850	5.18%	6.79%
661–780	6.40%	8.75%
601–660	8.86%	13.28%
501–600	11.53%	18.55%
300–500	14.08%	21.32%

Top Subprime Auto Lenders: Conclusion

Though it can be hard to get approved, there are a variety of lenders willing to work with you to get subprime car loans. We have provided you with our picks for the top subprime auto lenders on the market to help you make a decision:

• Best For Bad Credit: Auto Credit Express
• Best Auto Loan Marketplace: myAutoloan
• Best For Refinancing: Auto Approve
• Best Bank for Bad Credit: Capital One

Even though we have given you some subprime lenders where you can get auto financing, we encourage you to look around and compare options for the best deal for you.

Best Subprime Auto Lender: FAQ

Below are some frequently asked questions about the best subprime auto lenders:

How We Rate Loan Providers

Our review process aims to deliver consistent and unbiased assessments of auto loan providers. While there are multiple qualities that make a loan company successful, our review team focuses on those we believe are the most important for consumers:

• Rates: Auto loan companies with high loan amounts and low APRs are more likely to meet customer needs.
• Reputation: Our review team explored ratings from experts and each lender’s number of years in business when giving this score.
• Availability: Companies that cover a variety of circumstances scored best in this category.
• Customer Experience: This rating is based on transparency and consumer satisfaction ratings. We also took into account the helpfulness of each loan provider’s team based on our shopper analysis.

*Data accurate at time of publication.