Can You Finance a Car With Bad Credit?
By CarJinga Editorial Team · September 28, 2026
Financing with bad credit is generally possible, but expect a noticeably higher interest rate, possibly a required larger down payment, and a more limited selection of lenders willing to approve the loan.
What changes with bad credit
- Higher interest rates, sometimes significantly so, which increases the total cost of the loan
- Some lenders may require a larger down payment to offset their risk
- Fewer lenders may be willing to approve the loan, narrowing your options
- Shorter maximum loan terms in some cases
How to improve your odds and your rate
- Save for a larger down payment to reduce the lender's risk and the total amount financed
- Get pre-approved by a credit union, which often offers more flexible terms for subprime borrowers than a bank
- Consider a co-signer with stronger credit if one is available to you
- Shop your loan around to multiple lenders rather than accepting the first offer — rates for the same credit profile can vary between lenders
A word of caution on "buy here, pay here" lots
Some dealers specialize in in-house financing for buyers with poor credit, often advertised as "buy here, pay here." These can be a legitimate option but frequently carry very high interest rates and less favorable terms — read the full agreement carefully and compare the total cost against any other financing option you can qualify for before committing.