Can I get a car loan with a credit score below 600?

Yes, many lenders specialize in subprime auto loans for borrowers with credit scores below 600. However, you may face higher APRs and may need a larger down payment or a co-signer to qualify. Shopping around is essential.

How does a down payment affect my car loan with bad credit?

A larger down payment reduces the loan amount and lowers the lender's risk. This can help you qualify for a loan with a lower APR and reduce your monthly payment. A down payment of at least 20% is generally recommended for borrowers with bad credit.

How to Get a Car Loan with Bad Credit

Q: Is it better to finance through a dealer or a direct lender?

Direct lending often gives you more control over the loan terms and allows you to compare offers before visiting a dealer. Dealer financing can be convenient, but the dealer may add a markup to the APR. It is generally advisable to get pre-approved by a direct lender first and then compare the dealer's offer.

Reviewed by the LoanPolicies Editorial Team · Updated 2026-09-05

Struggling with bad credit? Get a car loan with bad credit by understanding key factors like APR, down payment, and loan term. Honest guide to help you compare.

Getting a car loan with bad credit is possible by focusing on your down payment, loan term, and lender options. While your credit score affects the APR you'll be offered, many lenders specialize in auto loans for borrowers with less-than-perfect credit. This guide explains the practical steps you can take to secure financing and manage your monthly payment effectively.

Understanding Your Credit Score and Auto Loan Options

Your credit score is a key factor lenders use to determine your creditworthiness. Generally, a lower credit score means higher risk for the lender, which often results in a higher APR on your auto loan. However, many lenders offer specialized programs for borrowers with bad credit. These loans may require a larger down payment or a shorter loan term to offset the risk. It's important to compare offers from multiple lenders to find the best terms for your situation.

Steps to Improve Your Approval Odds

Save for a larger down payment: A down payment of 20% or more can reduce the loan amount and show lenders you are committed.
Choose a shorter loan term: A 36- or 48-month term typically comes with a lower APR than longer terms, though the monthly payment may be higher.
Consider a co-signer: A co-signer with good credit can strengthen your application and help you qualify for better rates.
Get pre-approved: Pre-approval from multiple lenders gives you leverage when negotiating with a dealer and helps you focus on vehicles within your budget.
Shop around: Compare offers from different lenders—credit unions, online lenders, and banks—to find the most favorable APR and loan terms.

Key Factors That Affect Your Monthly Payment

Factor	Impact on Monthly Payment	Tips
Down payment	A larger down payment lowers the loan principal, reducing your monthly payment.	Save as much as possible before applying.
APR	A higher APR increases the cost of borrowing, raising your monthly payment.	Improve your credit score or find lenders that specialize in bad credit.
Loan term	Longer terms lower the monthly payment but increase total interest paid.	Choose the shortest term you can afford.
Credit score	Lower scores generally lead to higher APRs, increasing monthly payments.	Review your credit report for errors before applying.

When to Consider Refinancing Your Auto Loan

If you already have a car loan with bad credit, refinancing may become an option after you have made consistent payments and improved your credit score. Refinancing can lower your APR and reduce your monthly payment. Generally, it is best to wait at least six months to a year before seeking a refinance, and to compare offers from multiple lenders to ensure you get a better deal.

Dealer Financing vs. Direct Lending

When buying a car, you can finance through the dealer or obtain a loan directly from a lender. Dealer financing can be convenient, but the dealer may mark up the APR for profit. Direct lending—getting pre-approved by a lender before visiting the dealer—often gives you more control over the loan terms and can lead to a lower rate. Always compare the total cost of the loan, including fees and APR, before making a decision.

Securing a car loan with bad credit requires preparation and research. By understanding the factors that influence your loan, improving your down payment and credit profile, and comparing multiple offers, you can find financing that fits your budget. Use our comparison tool to explore licensed loan partners and start your journey toward vehicle ownership.

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