Frequently Asked Questions about Bad Credit Car Loans

Here are the answers to the most commonly asked questions about bad credit car loans.

What are bad credit car loans?

Bad credit car loans are auto financing loans for subprime borrowers, or customers whose credit scores disqualify them for traditional loans. Bad credit car loans can help customers with credit challenges buy a new car. Many lenders now offer bad credit car loans with reasonable interest rates and terms.

How do I apply for bad credit car loans?

Applying for bad credit car loans is easy. Simply click "start now" wherever you see it on our website to fill out our free application. The application will take you only a few minutes, and we will then provide you with several different quotes on bad credit car loans from major national, regional, and local lenders.

Will I even qualify for bad credit car loans?

Even if you didn't qualify for traditional loans through the dealership or the bank, it doesn't mean you won't qualify for bad credit car loans. Bad credit car loans are designed specifically for customers with credit challenges, so the qualification standards are less stringent. Many lenders even offer bad credit car loans for customers with histories of bankruptcy, charge-offs, or other serious credit problems. The best way to find out if you qualify is to apply for free on our site.

Do bad credit car loans have higher interest rates?

Because the lender is taking an additional risk in lending to a customer with credit problems, bad credit car loans do tend to have higher interest rates than those of traditional prime loans. However, the online marketplace for bad credit car loans has become highly competitive, which has driven down the cost and improved the quality of the loans. Credit-challenged customers can now easily find bad credit car loans with affordable interest rates.

Should I apply for bad credit car loans through the dealership?

The dealership is probably the worst place to secure financing for your new car. This is because dealerships inflate the rates and costs of bad credit car loans to pad their profit on the financing deal. If you cut out the middle man by applying for financing directly with a third-party lender, you will save a great deal of money. Comparison shopping for bad credit car loans with third-party lenders is the best bet for a low-cost, high-value loan. Speaking of dealers, learn five things never to say to a dealer on our next page.

How do I know if I fall into the subprime borrower category?

Bad credit car loans are ideal for borrowers who fall into the subprime category. Typically, this means that you have a credit score below 620, though lenders define it different ways. Subprime refers to borrowers who pose an additional risk because of a poor credit history. If you fall into the subprime category, you might not qualify for loans from traditional sources.