7 Best Car Loans for Bad Credit in 2025: Complete Guide & Reviews

Detailed Reviews of Each Lender

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Prestige Financial: Best for Post-Bankruptcy Borrowers

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Key Features:

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• Accepts Chapter 7 and Chapter 13 bankruptcy cases

• Interest rate reduction program (up to 2% annually)

• Minimum income requirement: $2,250 individual/$2,750 joint

• Allows joint applications

• APR floor of 14%

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Autopay: Best for Multiple Refinance Options

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Key Features:

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• Loan amounts: $2,500 to $100,000

• Terms: 24-96 months

• Multiple refinancing options available

• Soft credit pull for prequalification

• Access to multiple lender offers

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Digital Federal Credit Union (DCU): Best for Rate Discounts

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Key Features:

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• 0.5% discount for eligible checking account members

• 0.25% discount for energy-efficient vehicles

• Same rates for new and used cars

• Financing up to 130% of vehicle value

• Terms up to 84 months available

• Membership required ($10 nonprofit donation qualifies)

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Carvana: Best for One-Stop Shopping

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Key Features:

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• Minimum annual income requirement: $5,100

• 30-day prequalification offers

• Integrated car shopping platform

• No active bankruptcies allowed

• Co-signers accepted in select states

• Soft credit pull for initial approval

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Capital One Auto Finance: Best for Prequalification

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Key Features:

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• Minimum monthly income: $1,500

• Minimum loan amount: $4,000

• Access to 12,000+ participating dealerships

• Auto Navigator tool for car shopping

• Available in 48 contiguous states

• New and used car loans available

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Credit Acceptance Corp.: Best for Unemployed Borrowers

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Key Features:

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• Accepts unemployment income

• Available in all 50 states

• Considers open bankruptcies

• Works with buy-here, pay-here dealers

• New and used vehicle financing

• Indirect lending through dealerships

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MyAutoLoan: Best for Rate Shopping

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Key Features:

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• Up to 4 loan offers within minutes

• Minimum FICO score: 600

• Minimum annual income: $21,600

• Multiple loan types available

• Interest rate calculator tool

• Considers discharged bankruptcies

How to Improve Your Chances of Approval

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1. Save for a Larger Down Payment

• Reduces the loan-to-value ratio

• Shows commitment to lenders

• Typically leads to better interest rates

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2. Consider a Co-signer

• Can significantly improve approval odds

• May help secure lower interest rates

• Must be someone with good credit

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3. Check and Improve Your Credit

• Review your credit reports for errors

• Make all current payments on time

• Reduce existing debt if possible

Smart Shopping Tips for Bad Credit Car Loans

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1. Get Prequalified First

• Understand your budget

• Compare multiple offers

• Avoid hard credit pulls until necessary

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2. Watch for Red Flags

• Extremely high APRs (above market averages)

• Pressure to decide quickly

• Hidden fees or unclear terms

• Required add-on products

Making the Most of Kudos for Car-Related Purchases

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When making car-related purchases, using the right credit card can help you earn valuable rewards and save money. Kudos is a free AI-powered browser extension that automatically recommends the best credit card to use for each purchase, helping you maximize rewards on:

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• Car insurance payments

• Gas purchases

• Maintenance and repairs

• Auto parts and accessories

• Car washes and detailing

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If you're looking to get more out of your credit cards while managing your car expenses, Kudos is the best free shopping app to use when you shop online. They're currently offering $20 back after your first eligible purchase — just sign-up for free with code "GET20" and make a purchase at a Boost merchant.

Frequently Asked Questions

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What credit score is needed for a car loan?

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While some lenders require scores of 600 or higher, others specialize in bad credit loans and may approve scores as low as 500, though rates will be higher.

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Can I get a car loan while in bankruptcy?

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Yes, some lenders like Prestige Financial and Credit Acceptance Corp. specifically work with borrowers in bankruptcy, though terms may be less favorable.

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How much should I put down on a car with bad credit?

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Most experts recommend at least 20% down with bad credit, though some lenders may accept as little as 10%.

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What's the highest interest rate I should accept?

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While rates for bad credit can exceed 20%, try to stay under 18% APR by shopping around and improving your application with a larger down payment or co-signer.

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Can I refinance a bad credit car loan?

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Yes, many borrowers refinance after 6-12 months of on-time payments and credit improvement. Services like Autopay can help you compare refinancing options.