Auto loan with bad credit is a car loan based on your credit scores. You may get the higher auto loan interest rate, but some companies offer the best rates.
What Is A Bad Credit Car Loan?
Bad credit score for an auto loan is generally defined as mid-600s or below. VantageScore and FICO are the two most commonly used credit scoring models, and their score levels differ. Also, some auto lenders use a slightly different FICO model specific to the auto industry.
When deciding whether to approve a car loan, lenders consider factors such as payment history, regular income, length of employment, amount of debt, and loan amount in addition to creditworthiness.
So if your score is bad or lower, it’s still possible to approve a loan if other factors are in your favor. However, you may find other limitations such as: A lender may require a shorter loan term.
About one in six auto borrowers had a score of less than 601 as of 2021, according to credit bureau Experian.
