Can I get approved for a car loan with a 500 credit score and a 25% down payment?
I want to finance a used car. I currently make about $3,000 a month and I can put down about 25% ($2,500) toward a down payment. The only problem is that my credit score is 500. Can I still get approved for a car loan?
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Answered on Apr 27, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“With a credit score of 500, it’s highly unlikely that any bank or credit union will approve you for a loan. You’re considered too high-risk.
A smarter play would be to take that $2,500 and buy a car that’s $2,500. By doing so, you won’t have to worry about approval, your car is already paid for, and you can focus your efforts on paying off other debt and repairing your credit score.
Until you hit about 600 on your credit score, either approval for anything will be nonexistent or you’ll pay an exorbitantly high interest rate. Don’t take out more debt when you have better options to repair your credit.”
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