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Can you get a second car loan with bad credit?

I have a Toyota Corolla that I take to work every day. However, I like to go on outdoor sporting trips on the weekends, and I don’t have the towing and power I need. I’m thinking of buying a truck, but I already have a loan on the Corolla. Plus, my credit isn’t exactly stellar. Will I qualify for a second car loan if I have bad credit?

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Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I can imagine that trying to tow something with a Corolla isn’t ideal! Fortunately, you might still be able to get a second
car loan
with bad credit, as credit is only one part of your loan application.
When you apply for a car loan, the lender will certainly analyze your credit, but they will also look at:
  • Your debt-to-income ratio
  • Your income overall
  • How much you’re looking to borrow
If you have a debt-to-income ratio of 43% or less, this is a positive for your loan application. Enough income to comfortably pay for both loans is also essential, so make sure that the truck you purchase fits within your budget.
If you get approved, a low credit score may result in a higher interest rate on the loan. However, it may not disqualify you from approval. Before you finance the truck, try everything you can to improve your credit score, including:
  • Paying off high-interest debt
  • Trying to get your credit utilization ratio below 30%
  • Paying off any charge-offs and addressing any derogatory marks or delinquencies
  • Limiting hard inquiries on your credit
Once you get approved, remember that you will need full coverage car insurance for your new truck per the stipulations of the loan. That’s when
Jerry
can help.
Jerry
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