How to Finance a Car with Bad Credit
Seek out a "buy here pay here" used car dealership that specializes in bad credit financing. This type of dealership may approve a car loan for you with little to no money down, but be prepared to pay a high interest rate.
Having no credit history can make getting approved for a car loan challenging. However, there are lenders who specialize in working with individuals with no credit and offer financing options.
Car dealerships make money from financing deals and often offer higher interest rates to customers with good credit scores, while trying to sell additional products and services. Negotiate with the finance department to avoid being taken advantage of.
Ways to Finance a Car Purchase
- Utilize crowdfunding platforms to fund a new business.
- Use lenders and banks to finance car purchases while keeping personal cash as reserves for business investments.
Buying a Car with a 500 Credit Score
It’s possible to get a car loan with a credit score of 500, but it’ll cost you. People with credit scores of 500 or lower received an average rate of 13.97% for new-car loans and 20.67% for used-car loans in the second quarter of 2020.
Generally speaking, banks require a minimum credit score of 600 to give an auto loan without any down payment. Despite this, getting approved for a car loan with a 500 credit score can be challenging.
Amenability of Carvana to Credit Score
What credit score do you need to get a car from Carvana? Carvana has no minimum credit score; however, you must make at least $833 per month and not have any current bankruptcies.
Instead of looking at your credit history, the lender takes into consideration your income, your GPA, and the amount of down payment you can put on the vehicle.