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Perfect credit isn’t necessary to secure an auto loan, but decent credit is. If you have bad credit (or no credit), you may need a guaranteed auto loan.
Be careful, though. It’s not what it sounds like – not just anyone can walk into the lender and get a loan, you still have to meet specific guidelines.
Here are the top 5 best-guaranteed auto loans available today.
Best Guaranteed Auto Loans
#1. Auto Credit Express
Auto Credit Express commonly works with borrowers with serious credit issues, including bankruptcies, foreclosures, and collections.
They require borrowers to have at least $1,500 a month in income, but that’s about their only requirement.
Auto Credit Express is a marketplace that takes your application, looks at your qualifying factors, and matches you with a lender.
They work with hundreds of lenders who operate in the ‘bad credit’ sector, giving you more opportunities than you would have if you applied for the loans individually with each bank.
- Works with borrowers during bankruptcy to secure car financing
- Works with lenders that don’t require a down payment even with bad credit
- The largest selection of ‘bad credit lenders’ in the industry
- The application process takes 30 seconds
- In business since 1999
- You won’t qualify if you make less than $1,500 a month
- You’ll pay interest rates much higher than a traditional lender would charge
- You’ll receive many emails and phone calls trying to get your business
What We Like:
We love that Auto Credit Express has options. You aren’t stuck with the one loan they offer since they aren’t a lender.
As a marketplace, they work with hundreds of lenders and have helped thousands of low or bad credit borrowers secure auto financing.
>> Learn More: Auto Credit Express Review
MyAutoLoan.com is another marketplace geared toward borrowers with bad or no credit.
They don’t guarantee loans, but they make it much easier to find a solution by working with its network of lenders.
After completing one application, you’ll receive up to 4 offers from partner lenders for you to compare side-by-side.
Like Auto Credit Express, you must earn at least $1,500 a month. It doesn’t cost anything to apply, and you’ll have the ability to compare offers.
MyAutoLoan.com lenders typically offer loans with terms ranging from 24 to 72 months.
- Complete one application and secure quotes from up to 4 lenders
- There’s no obligation to accept an offer, and it doesn’t hurt your credit to try
- Offers car loans, leases, and car loan refinancing for people with bad credit
- Transparent pricing with the ‘lowest rate of the day’ posted daily on their website
- Funding is available within 24 hours if you’re approved
- Only works on certain vehicles (if it’s too old or has too many miles, you won’t qualify)
- Many lenders will contact you even after you take out the loan
- The rates and fees are often higher than traditional lenders
What We Like:
We love the ability to shop around for the best auto loan rate, especially if you have bad or even fair credit. Applying with a single lender takes time and often leads to a denial if you have bad credit.
MyAutoLoan.com makes it easy to shop around for the best rate despite your credit situation, all within a matter of minutes, and if you find a loan you like, you can have funding within 24 hours.
>> Learn More: MyAutoLoan Review
Car.Loan.com works with borrowers with bad credit or even no credit. Rather than networking with lenders, they work with local dealers who can offer in-house financing to borrowers that don’t qualify for traditional financing.
Car.Loan.com has been in business since 1994, so they have a long-term reputation for helping people secure car loan financing.
They typically offer a decision in a few minutes, but it can take up to 24 hours, depending on your qualifications.
- You get matched with a dealer, so you do everything at one time (buy the car and get the financing)
- Works with borrowers with all types of credit, including no credit
- Bankruptcies and repossessions don’t stop you from getting financing
- The marketplace is free (the dealer they match you with pays them)
- You may have options to compare
- You may be limited to a specific dealer to buy a car
- The interest rates and fees are higher than typical loans
- You must apply to get information on rates and fees available
What We Like:
If you prefer to do everything simultaneously (find a car and a loan), Car.Loan.com may be the best option.
Instead of matching you with a lender and then leaving you to find a dealer, they match you with a dealer that will provide financing.
It cuts down the back and forth and may put you into a car faster.
>> Learn More: Car.Loan.Com Review
RoadLoans.com is different than the above options. They are a direct lender, which means you get the financing from them rather than being directed to one of their partner lenders.
They offer a simple online process that provides answers in as little as one minute and once approved, you’re free to shop for a car within your budget using your pre-approval in hand, so dealers know you have the financing already.
- They don’t require a minimum credit score
- RoadLoans.com doesn’t charge late fees or prepayment penalties
- Quick application process
- RoadLoans sets up an appointment at your local dealership once you’re approved
- Great customer service options
- You must shop at dealers that accept RoadLoans.com financing (not all do)
- Potential for higher interest rates (they aren’t transparent on their website)
- Not available in all states
What We Like:
We like direct-to-consumer lending. Marketplaces are nice but going directly to the lender is nice if you know what you want and are ready to roll.
You’ll know what you can afford and what dealers accept the financing because RoadLoans tells you after you’re approved where you can shop.
You may complete the entire process faster, and the fact that there aren’t any late fees or prepayment penalties is rather nice.
#5. Buy-Here-Pay-Here Lots
Buy-Here-Pay-Here lots are just as they sound – you buy the car and get the financing at the same place.
These dealers offer in-house financing rather than requiring you to get a bank loan or third-party financing.
They are good for borrowers with bad credit since they typically don’t check credit but care more about your income and ability to repay the loan.
They typically charge much higher interest rates and fees, so read the fine print and ask many questions before choosing this option.
- Convenient to buy your car and finance it in the same place
- You don’t need good or even fair credit
- Many lots work with borrowers, giving favorable terms (longer terms) to make it more affordable
- Often accept multiple payments a month to help you pay the loan off faster
- Takes only one application, and you only have to deal with one person
- Rates and fees can be pretty high
- You’re stuck with the financing they offer, you can’t shop around
- The terms are often long, which means more interest in the end
What We Like:
We love the convenience of securing financing where you buy a car. If you know you have bad credit and won’t qualify anywhere, this can be your best bet. Just make sure you read the fine print and ask a lot of questions.
The fees and rates are often much higher, which makes sense, but you should make sure they are affordable for you.
A Guide to Guaranteed Car Loans with Bad Credit
What Is Guaranteed Auto Financing?
While there’s no such thing as 100% guarantee auto financing, there are plenty of lenders with the most flexible underwriting guidelines making it much easier for anyone to get approved.
By guaranteed auto financing, they mean they look beyond your credit score and look at other factors to determine your likelihood of paying the loan back in full.
Many lenders don’t even check your credit – if you’re looking for a guaranteed auto loan, it’s safe to say you don’t have good credit.
Instead, lenders focus on your income to determine how much you can afford.
You’ll typically need a decent down payment and will pay higher rates and fees to secure the financing. If you improve your credit, you may be able to refinance the car loan using an auto refinance marketplace.
>> Compare Options: Best Auto Loan Refinancing Lenders
Can I Get a Car Loan with No Money Down and Bad Credit?
You may be able to secure a car loan with no money down, and bad credit but expect the highest rates and fees if you do.
Instead, it helps to work on your credit and save at least a little money to put down. Even a $500 down payment can make a difference.
It shows that you have interest in the car and will do what you can to make the payments.
The higher your credit score (even if it’s fair credit) and the more money you put down, the less the loan will cost you over its lifetime.
Interest rates and fees add up quickly, especially if you take a loan for a long term (ex: 72 months), so know your options and do what you can to lower your payment.
>> Learn More: What Credit Score is Needed to Buy a Car?
Is there such a Thing as Guaranteed Car Finance?
Nothing in life is guaranteed, but some lenders offer financing that doesn’t consider your credit or that will lend to bad credit borrowers.
You must still prove you have the income to pay the loan and that your other debts don’t take up all of your income.
Guaranteed car finance is a loose term, but there are ways to find loans even if you have bad credit.
Can I Get Dealership Financing with Bad Credit?
Some dealerships offer financing (even motorcycle financing) to borrowers with bad credit. They are usually ‘bad credit’ lots that sell cars only to those with bad credit.
Your typical dealerships may offer some subprime financing options but typically only for those with fair credit, not bad credit.
>> Learn More: How to Refinance a Car Loan
Guaranteed Auto Loans: 5 Things to Consider
#1. Your Credit Score Still Matters
Even if you find guaranteed auto loans, they will likely still pull your credit. While they may not use it for their determining factors, they will use it as a compensating factor. If you have decent credit, you may get better terms.
Since guaranteed auto loans have high-interest rates and fees, any way you can lower them is important.
#2. Make a Down Payment
A down payment is another compensating factor. When you invest in the car yourself, you show you’re invested in it and aren’t just taking the loan because you can get 100% financing and may walk away from it.
The less money you borrow compared to the car’s value, the better the terms the dealer or lender can offer you.
#3. Apply with a Co-Signer You Trust
If you can’t qualify for the loan yourself, consider asking someone to co-sign with you. Remember, the co-signer is responsible for the loan if you default.
First, make sure you’ll make good on the loan and make sure you have a co-signer with better credit than you have to increase your chances of approval.
#4. Be Flexible
You won’t get the best rates and terms on a guaranteed auto loan, so keep that in mind. Look at all your options and know that you can refinance the loan when you improve your financial situation. For now, look at it as a way to get into a car.
#5. Only Buy a Car You Can Afford
Know how much you can afford and stick to that number, don’t let a dealership or lender talk you into a higher amount.
Even if you qualify for a larger loan, think of the interest charges it will cost you and the opportunity cost of spending that money on interest versus investing it in your future. Don’t get in over your head or you risk defaulting on another loan.
Alternatives to Guaranteed Auto Loans
Use Cash to Purchase a Car
If you have cash saved up, consider buying a car from a private seller. Search Craigslist, Facebook Marketplace, or Cars.com for some of the best deals.
Without financing, you don’t pay interest or fees and will save the most on the car, just make sure you’re buying a reliable car and not a lemon.
Use a Cash-out Refinance Auto Loan
Once you own the car, you can take out a cash-out refinance, which means you tap into your car’s equity.
You can use the cash as a down payment on another car and then sell your original car, paying off the loan.
Be careful with this option, though, because if you wait too long, you could end up upside down on the loan (owing more than the car is worth). Cars depreciate quickly, so don’t waste time if you use this option.
Consider Using a Credit Card (But Be Careful)
If your credit card allows you to use it to buy a car, and you have the credit limit, go for it, but use caution.
Credit cards have minimum payments, which usually only cover the interest. If you miss a payment or don’t make a full principal and interest payment each month, the interest could quickly skyrocket, making the car cost much more than it should.
Bottom Line: Best Guaranteed Auto Loans for Bad Credit
There’s no such thing as a guaranteed auto loan, but there are loans that come close to it. The key is to shop around, know what you can afford, and understand the fine print.
You may pay more for a car loan for bad credit, but with any luck, you’ll improve your credit and financial situation and be able to refinance into better terms in the near future.