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How can I get a car loan with bad credit?

I want to get a car loan, but I’m a bit strapped for cash. I also want a reliable vehicle with a warranty, so a used car just won’t cut it. Unfortunately, I have bad credit and I’m worried about loan approval. How can I get a car loan with poor credit?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Bad credit can hinder your search for a
car loan
, but don’t let it deter you from applying! Many companies work specifically with people who have bad credit, so you can almost always find a willing lender. To increase your chances of getting a car loan, shop around and be patient.
As with any loan, shopping around is essential, especially if you have bad credit. Some places to start your search include:
  • Credit unions
  • Banks
  • Dealerships
  • Online lenders
If you strike out on the lenders above, a
buy here pay here
establishment may also be an option. Keep in mind that regardless of which lender you pick, your high risk and poor credit will be reflected in your interest rates.
However, you also have a few ways to reduce your interest rate and increase your chances of approval:
  • Get a
    cosigner
    with great credit to sign for the loan.
  • Make a large
    down payment
    to put the lender’s mind at ease.
  • Select a shorter loan term.
If you want to save more money to pay your car loan off quickly, especially if you have a high interest rate, turn to your car insurance policy. While your lender will require full coverage, that doesn’t mean you have to pay top dollar for it. Instead, compare quotes using the Jerry app.
As a licensed broker,
Jerry
helps you find and compare quotes from dozens of providers. When you find a great rate for your new car insurance policy, Jerry helps you transfer or switch the policy. Average customers save nearly $900 per year!
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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