How to Get a Car Loan With Bad Credit

Updated September 2026 · 5 min read

With bad credit you can usually still get a car loan, but you will pay a higher rate and the lender will want more down. The goal is not just approval - it is approval on terms that do not bury you.

Improve your odds first

• Check your credit report and dispute any errors before applying.
• Put as much down as you can - 20% or more lowers the rate and the risk.
• Buy a less expensive car, which shrinks the loan and the payment.
• Apply with a credit union, which often treats thin or damaged credit more fairly than a dealer's lenders.
• Add a creditworthy cosigner if you have one - see the cosigning guide.

Get preapproved

A preapproval tells you your real rate before you are at the dealership, so you are not negotiating blind. Compare at least three offers and look at the APR, not just the payment.

Avoid the traps

• Buy-here-pay-here lots: convenient, but usually the highest rates and the most add-ons.
• Weekly payment plans, GPS kill switches and mandatory add-ons.
• Loans that exceed the car's value by a wide margin, which leave you upside-down for years.

Use the loan to rebuild

Make every payment on time. After a year of clean payments your score improves, and you can refinance into a lower rate - see the refinance guide. Price the loan first with the auto loan calculator.

Frequently asked questions

Can I get a car loan with a 500 credit score?

Often yes, through subprime lenders, but expect a high rate. A larger down payment and a cheaper car improve the terms.

How much should I put down with bad credit?

As much as you can. Twenty percent or more meaningfully lowers the rate and the chance of negative equity.