Best Way For You To Get Approved For Bad Credit Car Loans

an image of a paper that says "bad credit loan agreement" and a toy car next to it for bad credit car loans

Are you struggling to get approved for a car loan due to bad credit? 
You’re not alone. 
Lucky for you, there are steps you can take to improve your chances of approval and get the car you need. 
In this article, we will discuss how to get approved for bad credit car loans, including tips for improving your chances of approval and finding the right auto financing lender.

Bad Credit Car Loans
– Table of Contents –

Bad Credit Car Loans

Understanding Bad Credit Car Loans

Improving Your Chances of Getting Approved for a Bad Credit Car Loan

Finding the Right Bad Credit Car Loan

Applying for a Bad Credit Car Loan

Alternatives to Bad Credit Car Loans

Dealing with Car Dealerships

Final Thoughts on Getting Approved for Bad Credit Car Loans


Bad Credit Car Loans

an image of words that say "credit scores" and a list of numbers where the lowest is circled in red and a red stamp says "bad credit" for bad credit car loans

Securing a bad credit car loan can be difficult. You first need to understand what they are in order to find the best way to get a car loan with bad credit.

Definition of Bad Credit Car Loans

Bad credit car loans are loans specifically designed for people with bad credit who need to buy a car. 

These loans typically have higher interest rates than traditional car loans and may require a larger down payment. 

Since they are high-risk auto loans for the lender, they may also require a higher interest rate or shorter term. 

Importance of Car Loans for People with Bad Credit

Having a car is essential for many people, especially here in the Fresno CA area. 

Whether it’s for commuting to work or running errands, surviving without a car has become nearly impossible.

To top this off, if you are unable to have a dependable used car to get you to work, you will undoubtedly fall into a cycle of being unable to earn enough to buy a used car. This may also lead to you being unable to pay bills, which will continue decreasing your credit score.

Bad credit or repossession can make getting approved for car loans nearly impossible. 

Why Getting Approved for a Bad Credit Car Loan Can Be Challenging

Lenders are hesitant to approve car loans for people with bad credit because they consider them to be high-risk borrowers. 

Bad credit typically means a history of non-payment or late payments. Since no one can read the future, they can only base their decisions on your past.

They worry that borrowers with bad credit may default on the auto loans, leaving the auto lender with a huge financial loss.

Understanding Bad Credit Car Loans

a photo of a couple confused by bad credit car loans

Factors That Contribute to Bad Credit

Several factors can contribute to bad credit. These include:

  • Missed payments or payment defaults
  • High credit card balances
  • Late payments
  • Not enough credit history
  • Repossession
  • Bankruptcy
  • High credit utilization or your debt to income being too high

Types of Bad Credit Car Loans

There are several types of bad credit car loans and financing options available. These include:

  • Secured loans – A type of loan that is backed by a form of collateral. This is typically the used car that you purchased, however, there are instances that an auto lender may require additional collateral to guarantee the car loans.
  • Unsecured loans – This is extremely rare but there are instances that no collateral would be required. Instead, the bad credit car lender may require a very large down payment to where you are left with almost no balance. Interest rates for the auto loans may also be substantially higher.
  • Buy here pay here – Type of guaranteed car loans for bad credit that is provided directly by the car dealerships you are purchasing from. These are a niche version of subprime auto loans as they tend to have much more flexible terms that work specifically for each individual customer. Our own dealership specializes in buy here pay here. This is the best solution for used cars and bad credit auto financing.

Pros and Cons of Bad Credit Car Loans

While bad credit car loans can provide a way for people with bad credit to purchase a car, they come with some pros and cons. 


  • Easy car financing with poor credit
  • Fast car loan approval
  • Access to reliable used cars
  • Less or no focus on credit score
  • Potential to improve your credit score
  • Tend to be more personable as the lender or buy here pay here dealership is directly involved with your account
  • More flexibility with car loans for poor credit


  • Higher interest rates 
  • May require a larger down payment
  • Limited options on vehicles and negotiating power

Improving Your Chances of Getting Approved for a Bad Credit Car Loan

an image with words that say "bad credit? we can help!" to get bad credit car loans

Understanding Your Credit Score

Understanding your credit score is essential when applying for a bad credit car loan

Reading up about how credit works is crucial for you to create a game plan on how you can improve it. 

You can check applications like Credit Karma or Experian to keep track of your score, but keep in mind that these are not always extremely accurate. Instead, you can have your credit run for free on websites like

A higher credit score can improve your chances of approval and result in a lower interest rate.

Ways to Improve Your Credit Score

There are several ways to improve your credit score. These include:

  • Paying off debts
  • Making payments on time
  • Keeping your balances low
  • Not having too much revolving credit
  • Contacting collectors, charge-offs, or previous repossession companies and settling an old balance
  • Disputing errors on your credit report

You can read through our in-depth guide on how to improve your credit score.

Providing a Down Payment

Providing a larger down payment can improve your chances of approval for a bad credit car loan.

Since the down payment is reduced directly from the overall loan amount, it means there is less money on the line. This reduces the high risk of a bad credit auto loan.

It also shows the lender that you are able to save and have more skin in the game. The more committed you are, the less risk they are taking.

Getting a Co-Signer

A co-signer with good credit can help improve your chances of getting approved for a bad credit car loan.

By co-signing, they are guaranteeing that if you don’t pay, they will step in and pay for you. Since they have a history of paying well, auto lenders can feel at ease that they will be responsible and hold true to their word.

Finding the Right Bad Credit Car Loan

a picture of a dollar bill hiding the words bad credit underneath where you find bad credit car loans

Researching Lenders

When looking for a bad credit car loan, it’s important to research all of the different financing options available to you.

This includes bad credit auto lenders

Look for lenders that specialize in bad credit car loans and have a good reputation. Also, look at buy here pay here dealerships or in house financing dealers

Avoiding Scams and Predatory Lending Practices

Be wary of auto lenders who offer car loans that seem too good to be true. 

Many may ask for upfront payments, holding payments, or anything not directly attached to the used car.

These may be signs of a scam or predatory lending practices.

Evaluating Loan Terms and Interest Rates

Make sure to read through the car loan terms.

Evaluate the terms and interest rates of any car financing offers you receive. 

Look for used car loans with a reasonable interest rate and terms that you can afford. However, also understand that interest rates are not the most important part.

Many bad credit auto lenders or bad credit car dealers can get you quick car financing for poor credit with a low rate but will do nothing to help you improve your score. This guarantees that you are trapped coming back to them forever.

We suggest you look at buy here pay here dealers that specialize in improving your credit score. They may charge a higher rate, but long term, you’ll save hundreds of thousands. 

Applying for a Bad Credit Car Loan

an image of a stamper tilted to the side with the stamp "approved" above "credit application" for bad credit car loans

Preparing the Necessary Documents

Before applying for a bad credit car loan, make sure you have all the necessary documents. These will typically include:

  • Proof of income
  • Proof of residence
  • Valid driver’s license or ID

Some car dealerships may be unwilling to provide a bad credit car loan without a license. Find out how you can finance a car without a license in California.

Providing Proof of Income

Lenders will typically require proof of income to ensure that you can repay the loan. 

This may include pay stubs, tax returns, or bank statements.

If you do not have these, there are still some buy here pay here dealerships that can work with that. Just know that you will likely be required to put the majority of the vehicle’s price as a down payment and have very unfavorable repayment terms. 

Meeting Other Requirements

Lenders may have other requirements, such as a minimum credit score or a maximum debt-to-income ratio. 

Make sure you meet these requirements before applying for an auto loan. You don’t want it affecting your credit score further for no reason.

Also, there may be additional documentation they may need from you. Try to analyze your specific situation and gather up any additional documents they could potentially ask for. 

Alternatives to Bad Credit Car Loans

Subprime Auto Loans

Subprime auto loans are another option for people with bad credit.

These loans typically have moderately high-interest rates but may be more accessible than traditional car loans.

They are typically only available to people with somewhat bad credit. If your credit score is below their threshold, you will need to look elsewhere. 

Second Chance Car Loans

Second-chance car loans are designed for people with bad credit who have been turned down for other car loans. 

These loans come with higher interest rates and fees but can provide a way to purchase a car.

These are typically provided by banks or financial institutions. 

In House Financing

In House financing is another option for people with bad credit who need a car. 

With this type of financing, you purchase the vehicle directly from the in house dealer and they also provide you bad credit auto financing on it.

You make your payments directly to them and build a long-lasting relationship with them one-on-one.

Dealing with Car Dealerships

a photo of a couple shaking the hand of a car dealer

Negotiating For A Used Car

When purchasing a car with a bad credit car loan, it’s important to negotiate.

While buy here pay here dealers or in house financing lots will be firm with their prices, subprime auto loans are not attached to any one dealership.

Don’t get overly fixated on just getting approved for the used car loans, ask for a discount where you can.

The worst they can say is…no.

Avoiding Repossession

If you default on your bad credit car loan, the lender may repossess the car. 

Car loans for poor credit are typically less forgiving and they take action very quickly. 

To avoid repossession, make sure to make your payments on time and communicate with the lender if you’re having trouble making payments.

If you’ve experienced a repossession, you can check out our guide that answers all the top questions regarding getting a car after a repossession.

Communication goes a long way with subprime auto loans and buy here pay here dealerships.

Final Thoughts on Getting Approved for Bad Credit Car Loans

a photo of a woman in a green sweatshirt having final thoughts on bad credit car loans

You Have Financing Options Available To You

Getting approved for a bad credit car loan can be challenging, but it’s not impossible. 

By understanding your credit score, researching lenders, and preparing the necessary documents, you can improve your chances of approval. 

Consider alternatives to bad credit car loans and make sure to always attempt to negotiate the price of the car to get the best car financing deals possible.

If you’re looking for in-house financing, use our guide to find the best in house financing dealership for auto loans.

Just because you have bad credit doesn’t mean you’re out of luck. You have financing options available to you.

Bad Credit Car Loans
– FAQ –

Can I get a bad credit car loan with low money down?

There are some buy here pay here dealers that offer low money down options, including our own. Our down payments start at $500 and can be very easy to qualify as long as you provide all the necessary documentation and meet the requirements. If you are within our area, we highly recommend you fill out our online application. If not, a quick Google search for “buy here pay here dealerships near me” will help you find some good options. Remember, do your research!

What is the minimum credit score required for a bad credit car loan?

Most subprime auto loans require a minimum credit score of 580. This is substantially lower than a traditional car loan. Many other second-chance car loans will require a credit score of 500 or higher. Buy here pay here dealerships like ours have no minimum credit score required and instead can base much of your approval on your income, stability, and a customized underwriting procedure to help you succeed. 

How long does it take to get approved for a bad credit car loan?

The time it takes to get approved for a bad credit car loan can vary depending on the car lender and your individual situation. Some lenders offer fast approval times, while others may take longer to review your application and make a decision. Our own in house car loans for poor credit are typically approved within 5 minutes and the entire process can take from as low as 1 hour. 

Can I refinance my bad credit car loan?

Yes, it is possible to refinance a bad credit car loan. Refinancing can be a helpful tool for reducing your monthly payments or lowering your interest rate. However, it’s important to make sure that refinancing makes sense for your individual situation. If you are extending the life of the loan too much you’ll end up paying way more for the vehicle than you should. 

What should I do if I can’t make my bad credit car loan payments?

If you’re having trouble making your bad credit car loan payments, it’s important to communicate with your auto lender as soon as possible. Some auto lenders may be willing to work with you to adjust your payment plan or offer other solutions. This is especially so for buy here pay here dealers like ours. Avoiding making payments or defaulting on the loan can result in repossession of the car and further damage to your credit score.

Shameless Plug –
Contact Us Today to Get Approved For Your Pre Owned Vehicle

If you’re in the market for a used car, truck, SUV, or van, and you’re worried about your credit score, we are here to help

Our buy here pay here financing is designed to help you get the pre owned vehicle you need and improve your credit in the process. 

Contact us today to learn more about our selection of pre owned vehicles and bad credit car financing options.

Additional Resources To Help On Your Journey

We love to share the wealth! Here are some resources and trusted vendors that we personally use. They can help you take care of your vehicle as well as keep your credit and finances in tip-top shape:

Car Parts

High Quality and Affordable Car Parts: Advance Auto Parts

High Quality Dash Cams and Car Accessories: Rexing USA or VanTrue or Nextbase

Car Audio & Sound Systems: Eonon 

Premium Wiper Blades & Accessories: Clix Auto

Easy Key Replacement & Programming DIY: Car Keys Express

High-Quality Orignal and Custom Car Lighting: LASFIT

Quality Car Parts/Accessories (mats, covers, assemblies): Oedro

Premium Car Detailing Supplies: Chemical Guys

High-Performance Car Parts & Air Filters: KN Filters 

High-Performance Parts: Max Speeding Rods

Speed and Performance Parts: Spectre Performance

Air Intakes: Airaid

Original & Aftermarket Wheels: OE Wheels LLC

Battery Tenders: Deltran Battery

High-Quality Tires Of All Types: Priority Tire or Discount Tire

DIY Car Extras

In the event your dealer doesn’t provide you a history report: VinAudit

To learn to recondition your old car battery: EZ Battery Reconditioning

For DIY Ford vehicle repair: Ford Shop

To learn to take some knicks out of your car’s paint: High Quality Car Spray

If you find yourself in need of a car rental: Discover Cars or Airport Rental Cars or Holiday Autos

If you’d like to see what public car auctions are like: Gov Auctions or Gov Seized Auction

Personal Finance & Credit

To help you improve your credit: Axion Credit Repair or Coast Tradelines

For a DIY credit repair course: DIY Credit Repair

To help you get free of debt and increase your credit: What Lies In Your Debt?

If you’re in a bind and need cash quickly: Bad Credit Loans or Cash Advance

For personal loans of higher quantities: Fortuna Credit or Personal Loans

For a high cash-back credit card (make sure you only use it as if it’s a debit card!): Laurelroad 

We will keep sharing all of our vendors that we have a great experience with. Only the ones we see align with our values as time goes on, both locally and nationwide.