How do I get a car loan with bad credit?

I’m in the market for a new car, but I need to get a loan. The only problem is that I have poor credit and I’m not sure if I can get approved for a loan. How do I get a car loan if I have bad credit?

Answer
Although bad credit can make finding a car loan or a decent interest rate more difficult, it won’t disqualify you entirely. Many companies are still willing to work with you, although you almost certainly will have to pay a higher interest rate. To improve your chances of getting a car loan with bad credit, be patient, shop around, and use a few of the tips listed below.
Patience and shopping around are both essential to get a car loan with bad credit. To begin your search, start with a few of these lenders
While you may not get approved by some of these lenders, others will work with you at a high interest rate. Just keep making your payments on time, and hopefully, you can refinance the car after a year or two.
Here are some other ways you can improve your chances of approval and reduce your interest rate:
  • Select a shorter loan term.
  • Get a cosigner with great credit to sign for the loan.
  • Make a large down payment to put the lender’s mind at ease.
And if you want to save some money to offset the higher interest rate or pay your loan down more quickly, take a glance at your car insurance policy. The lender will require full coverage car insurance, but don’t take that as a sign that you need to overpay. Instead, shop around 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!
Eric Schad
Answered on Dec 14, 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.
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