Can I Get a $500 Down Car Loan with a 550 Credit Score?

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Even with poor credit.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - June 27, 2019

While it’s not guaranteed, it’s possible to get a $500 down car loan with a credit score hovering around 550. There are many special finance dealerships that know how to handle credit-challenged car buyers, but finding them isn’t always easy.

Where to Get a $500 Down Car Loan

The type of dealer you typically need to work with is a special finance dealership. These dealers work with subprime lenders, and subprime lenders know how to handle bad credit. Subprime lenders check your credit, but look at additional factors to determine approval (we’ll discuss this later on), one of which is usually a down payment.

Subprime lenders generally don't require a large down payment, which is good if you're on a tight budget. Typically, these lenders ask that you make a down payment of at least $1,000 or 10% of the vehicle’s selling price, whichever is less. This means if you choose to finance a car worth $5,000, you could be okay with a down payment as slow as $500.

Ideally, you should make as large as a down payment as possible if you have bad credit. The reason why is because making a larger down payment helps you lower your monthly payment and the overall cost of the loan. This is especially important if you have bad credit, since you’re likely to have a higher than average interest rate. With a large enough down payment, you could save yourself a thousand dollars or more in interest charges in some cases.

Additional Bad Credit Auto Loan Requirements

A down payment is just one requirement subprime lenders ask for in order to approve you. When you’re getting ready to visit the dealership, make sure you bring these documents with you:

  • Proof of income – Subprime lenders want to make sure you can afford the vehicle, and ask to see proof of income. Many have a minimum income requirement of $1,500 to $2,000 a month before taxes from a single source. To prove it, bring in a copy of a computer-generated pay stub showing year-to-date earnings.
  • Proof of identity – Lenders want to make sure you are who you say you are. Bring in a valid driver’s license or state I.D to do so.
  • Proof of residency – Lenders need to verify that your address matches the one listed on the application. Bring in a recent utility bill in your name at that address.
  • Proof of a phone – Lenders want to make sure they can contact you. Bring in a recent phone bill in your name at the same address. It can be a landline or contract cell phone.
  • List of personal references – Lenders are going to ask you to provide a list of personal references (usually five to eight) complete with full names, addresses, and phone numbers.

Depending on the lender and their requirements, they may ask for a cosigner. A cosigner lets you “borrow” their good credit, and can help you get approved for an auto loan if you couldn’t qualify on your own. Your potential cosigner needs to meet the lender’s requirements individually as well.

Ready to Find Financing?

Now that you know where to go to get the financing you need, how do you find the right dealer? With CarsDirect, of course!

We can help you get connected to a dealership near you that knows how to assist people in all kinds of unique credit situations. Thanks to our nationwide network of partner dealers, we take the hassle out of finding auto financing.

Don't hesitate any longer if you need another vehicle. Get the process started today by filling out our free and secure car loan request form!

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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