How we came up with this list

How we came up with this list

If you’re looking to refinance an existing car loan, Autopay can help. Autopay offers both new and refinance loan options, with competitive rates and flexible qualification requirements.

Like Monevo, Autopay is an aggregator, which means you’re shopping multiple lenders with one application. This ensures you get the best rates available, but it also means the interest rate you’re quoted can vary. You can have a credit score as low as fair (580 to 669) to qualify for a loan through Autopay, but typically you’ll need a score of at least 630 to make it through the process.

But where Autopay can really help is with refinancing a loan you took out when your score was worse. If you’ve worked hard to improve your score, Autopay can get you a reduced rate. For the best rates, you’ll need at least a good credit score.

If you’re heading out to buy a car, you can get prequalified through Autopay and know exactly how much of a vehicle you can afford. Autopay also allows cosigners on its loans, so if you have someone with stellar credit who wants to help you out, you may be able to get a good rate on that new or used car you’re buying.

To come up with this list, we vetted around 20 subprime auto lenders. To make the top five, lenders had to offer decent APRs . No subprime auto loan is going to come attached with low APR, but at least the lenders on this list got them as low as they could.

We also considered loan amount minimums. Some predatory subprime auto lenders have high minimum loan amounts ($15,000+) so they can squeeze more interest out of unsuspecting lenders. The lenders on this list had minimums of $10,000 or less.

Similarly, some unscrupulous lenders have a minimum term of 48 months, which can cost you thousands more in interest. To make this list, lenders must offer a 36-month term, which represents the sweet spot for low monthly payments and minimal overall interest.

Finally, all of the lenders on this list let you get an offer online in under 10 minutes without making a hard credit pull. Factoring into that, of course, is website optimization and a great UI.

What is an auto loan, and how does it work?

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Most folks don’t have tens of thousands in cash lying around to pay for a new car in full. Therefore, they take out a loan from a financial institution like a bank or the other lenders in this list.

The basics of auto loans are pretty simple; you apply for the loan, the lender gives you a lump sum so you can buy the car, and you pay it back over time in monthly increments that include interest.

  1. The loan amount.
  2. The loan term (i.e. length).
  3. The APR, or interest rate.

When browsing loan offers, you have a lot of choices over the loan amount and the loan term. Generally speaking, it’s strongly recommended that you get the smallest loan possible with the shortest term possible . In short, buy a cheap, reliable car and pay it off quickly.

The factor you have less control over is the APR. Lenders calculate your APR using countless variables , but a major player is your credit score. The lower your credit score, the higher the likelihood (in their eyes) that you’ll default on your loan. Therefore, lenders charge you higher interest to compensate for their increased risk.

How to get a car loan with bad credit

When it comes to getting a car loan with bad credit, you’ll need to follow some steps to ensure you’re getting the best rate.