Getting approved for an auto loan when you have a credit score of 450 can seem daunting. After all, 450 falls squarely in the “very poor” credit range according to FICO—far below what most lenders consider good credit. But the truth is, you still have options to finance a car, even with bad credit.
In this comprehensive guide we’ll cover everything you need to know about getting a car loan with a 450 credit score. including
- What lenders look for when approving loans for bad credit
- Your chances of getting approved
- How to improve your odds
- The best lenders for bad credit car loans
- Loan terms to expect
- Tips for getting the best deal possible
What Do Lenders Look For When Approving Bad Credit Car Loans?
When you apply for a car loan lenders mainly consider three factors
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Credit score – Gives a snapshot of your creditworthiness and likelihood to repay debts. The higher your score, the better.
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Income – Lenders want to see you have enough steady income to make the monthly payments.
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Down payment – A larger down payment signals you’re financially committed and lowers the amount financed.
For bad credit borrowers, scoring low on one factor can sometimes be offset by strength in another area. For instance, a high income and large down payment may help compensate for poor credit.
What Are Your Chances of Getting Approved for a Car Loan with a 450 Credit Score?
While it’s certainly possible to get approved with a 450 credit score, your chances aren’t great. According to Experian, only 7% of auto loans went to borrowers with deep subprime credit (300-500) in Q3 2022.
You can improve your chances by having sufficient income, limiting total monthly debt payments, and putting more money down. But expect much higher interest rates or denial from lenders who see too much risk in your application.
Building your score over 600 before applying will open up many more affordable financing options.
How Can You Improve Your Chances of Getting Approved?
If you need a car soon and can’t wait to improve your credit first, here are some tips to boost your odds of getting approved for a loan with a 450 score:
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Get a cosigner: Adding someone with better credit will lower the lender’s risk. Just be sure they understand the responsibility they’re taking on.
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Increase your down payment: Putting down 20% or more shows you’re financially committed and lowers the amount financed.
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Work with subprime lenders: Specialty lenders that cater to bad credit borrowers may offer better approval chances than traditional banks.
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Apply with a coworker: Some credit unions offer loans if the borrower works for an affiliated employer.
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Clean up your credit report: Fix any errors dragging down your score. Even a small increase can help.
Who Offers the Best Bad Credit Car Loans?
While every lender has its own approval criteria, here are some top picks for bad credit car loans based on interest rates, fees, and borrower reviews:
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Capital One: Prequalify online with soft credit check. Wide dealer network.
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AutoCreditExpress: Large network of subprime lenders. Loan offers tailored to credit.
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Carvana: Fully online application. Delivers cars to your door. Offers financing even with poor credit.
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MyAutoLoan: Matches borrowers with lenders. Bad credit OK. Also refinances existing auto loans.
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Lightstream: Offers unsecured auto loans which don’t require a lien on the car. 650 minimum score.
What Loan Terms Can You Expect with a 450 Credit Score?
While offers vary case by case, here are typical loan terms for borrowers with very poor credit:
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APR: 15% to 29%
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Loan amount: $5,000 – $20,000
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Down payment: At least 10%, ideally 20% or higher
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Term length: 4 – 6 years
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Origination fee: Around $500 – $1000
As you can see, interest rates are much higher compared to someone with good credit. But a bad credit car loan may be your only option if you need a vehicle and can’t wait to improve your credit first.
Tips to Get the Best Bad Credit Car Loan Deal
While you’ll pay higher rates with poor credit, here are some tips to help get the most affordable financing:
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Shop around with multiple lenders to compare offers
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Consider an older used vehicle – you can get lower loan rates for cheaper cars
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Make the largest down payment you can afford
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Opt for the shortest loan term you’re comfortable with to save on interest
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Avoid lenders pushing extra products like extended warranties – they raise the total cost
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Review the full loan contract before signing – watch out for extra fees snuck in
The Bottom Line
Getting approved for a car loan with a 450 credit score can be challenging but is definitely possible. Specialty subprime lenders offer your best chances since they’re used to taking on riskier borrowers. Prepare for higher rates and costs compared to good credit loans, but shop around to compare options. And work on improving your credit as much as possible before applying to open up more affordable financing opportunities down the road.
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Can I get a car loan with a 500 credit score?
Its certainly possible to get a car loan with a credit score of 500, even though thats considered a poor score. Your best bet would be to work with a lender thats known for giving loans to people with a subpar credit history. Because having a 500 credit score represents a significant risk to the lender, it will likely charge you a higher interest rate for the loan than if you had a better score. If possible, improve your credit before applying for a loan to get more favorable terms.
What’s the lowest credit score you can have to finance a car?
Theres no specific minimum credit score required to finance a vehicle. Credit requirements vary by the lender as every lender has its own policies for how they evaluate loan applications.
Plus, while your credit may be important, lenders also look at other financial factors, such as your income and other debts you have. The more indicators they find that youre likely to pay back the loan on time and in full, the better your chances of getting approved.
Only 450 FICO Needed – Bad Credit Auto Loan Approval. Dealerships Near You! Refinance After Later!
FAQ
Can I buy a car with a 450 credit score?
Can I get a loan if my credit score is 450?
Borrowers with a credit score of 450 or below present a high risk to lenders, severely limiting personal loan options and increasing borrowing costs. You may still qualify for a personal loan with lenders that focus on other criteria, such as income and spending habits, over your credit score.
What credit score is needed for a $20,000 car loan?
There’s no minimum credit score required to get an auto loan. However, a credit score of 661 or above—considered a prime VantageScore® credit score—will generally improve your chances of getting approved with favorable terms. For the FICO® Score Θ , a good credit score is 670 or higher.
What is the minimum credit score to qualify for a car?
Generally speaking, the minimum credit score to be approved for vehicle finance is between 600 and 650+, depending on the amount.
Can you get a car loan with a 450 credit score?
The extra security provided by the collateral means you may successfully obtain an auto loan with a 400 to 450 credit score, but you’ll likely be required to make a sizable down payment. 8. Auto Credit Express
Is a 450 credit score bad?
450 is considered a bad credit score. As a result, it will make it difficult to qualify for a loan or unsecured credit card, and you will need to focus on rebuilding your credit before trying to get a mortgage, car loan, etc.
Can you get a mortgage with a 450 credit score?
Less than 1% of first mortgages go to people with a 450 credit score. This is partly because FHA-backed home loans require a minimum score of 500. Improving your credit score before applying will make it much easier to get approved and save you money on interest and fees.
What does a 450 FICO credit score mean?
Having a FICO credit score in the 400 to 450 range is the result of several credit missteps: repeated missed or late payments, defaulted or foreclosed loans, and possibly bankruptcy. Building your credit takes time and is a worthwhile step toward better loan terms in the future.
Do you need a down payment if your credit score is 450?
However, lenders that make these loans do have credit score benchmarks — usually a credit score of at least 620 — so a down payment may be needed if you have a credit score of 400 to 450. FAQs: How Bad is a Credit Score of 450? Credit scores start as low as 300. If your credit score is 450, then you’re significantly below the average credit score.
What are the best personal loans for a 450 credit score?
For a 450 credit score, the best personal loans are from OppLoans or Integra Credit. These companies specialize in lending to people with bad credit and may not require a credit check during the application process.