Where Do I Get a Bad Credit Car Loan?

Get Car Financing
Even with poor credit.

By

Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - March 23, 2020

When you have bad credit, finding a lender to work with you can be disheartening after a few loan rejections in a row. However, subprime auto financing, or bad credit car loans, could be the answer – you just have to know where to look.

What Is Bad Credit Auto Financing?

Bad credit auto financing is just what it seems – car loans for borrowers with less than perfect credit.

Subprime lenders work with dealerships that have special finance departments. These lenders use your income, debt to income (DTI) ratio, a down payment, and other factors to make loan decisions. If you’re approved, the lender sends what is termed a payment call, which lets a dealer know your maximum monthly payment based on your information. You then choose a vehicle from the dealership’s stock that fits within that monthly budget.

For you to be considered for approval by a bad credit lender, or subprime lender, more than your credit score is used to gauge your ability, stability, and willingness to successfully complete a loan.

How Do I Apply for a Bad Credit Auto Loan?

Before you can be approved for a bad credit car loan, you need to find a dealership with a special finance department. Once you do, you need these documents to verify your personal information as part of the approval process:

  • Check stubs – Computer generated, with a minimum monthly income of $1,500 to $2,000 (gross) from a single job, and your current year-to-date income.
  • Valid driver’s license – Cannot be expired, revoked, or suspended. Must have your current address.
  • Proof of residency – Proven with a utility bill or bank statement in your name, with address.
  • Proof of a working phone – Proven with a recent bill. Can be a contract cell phone or landline in your name, but prepaid phones aren't accepted.
  • Five to eight personal references – Can be family, friends, or coworkers, and must include their complete contact information. Can’t be anyone that shares your address.
  • Down payment – A down payment of at least 10% of the vehicle’s selling price or $1,000, whichever is less. A trade-in is acceptable toward the down payment requirement, and could cover the entire amount, depending on how much it’s worth or how much equity you have.

All subprime lenders are different, and some may have more requirements. Additional documents may be needed if your bankruptcy was recently discharged, you’re using a co-borrower or cosigner, or you have an acceptable secondary income.

Ready for Your Next Car Loan?

When you know what to expect before you start looking for a bad credit auto loan, the less hassle you have to deal with when the time comes to sign up for that next car.

When you’re ready to finance, we want to help make the car buying process easier. If you have bad credit, finding a lender that can work with your unique credit situation can be stressful.

Let us ease some of that stress – at CarsDirect, we look for dealerships with bad credit lending options in your area. To get started, simply fill out this fast and free auto loan request form, and we’ll get to work!

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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