Do you need a car but have poor credit? If you have poor credit, you may believe that your options for getting an auto loan are limited. If that’s the case, you’re not alone. Many people with a poor credit history are looking for auto loans that will work for them.
Luckily, there are plenty of lenders who offer these types of loans to people with subpar credit. This is especially true of credit unions. But how do you know which credit union is the best for bad credit? Read on to see if one might be right for you. We researched and compiled a list of the top seven American credit unions that give loans to people with bad credit.
How does getting loans from credit unions with bad credit work?
The most common questions people ask when trying to apply for a car loan include:
- How do I find a car loan with bad credit?
- What are the qualifications for an auto loan with poor credit?
- Which lenders will work with people who have low FICO scores?
The following information will give you a better idea of what to expect when looking for an auto loan with bad credit. It’s important to remember that every lender is different and has its own requirements. While some lenders have strict rules, there are plenty that work with people from all different financial backgrounds. The best way to find out is by applying online and seeing which ones are willing to work with you.
Pros and cons of borrowing from credit unions that work with bad credit
There are many benefits to borrowing from a credit union instead of going through a bank. Credit unions offer lower interest rates, more flexible payment plans, and less strict qualifications than banks do.
While these lenders may be more lenient with their lending policies for people with poor FICO scores than other financial institutions, that doesn’t mean that they are completely flawless. These lenders still have guidelines that you must meet if you want to get approved for a car loan with bad credit, such as:
- You need a down payment.
- You will have to provide a cosigner, which can be difficult if you don’t know someone willing and able to help you out financially.
- Your credit score needs to be above a certain number.
It’s essential to keep in mind that everyone applying for an auto loan with bad credit will not get approved right away, so don’t become discouraged if you are denied your first few applications.
Navy Federal Credit Union’s car loan for bad credit individuals
The Navy Federal Credit Union offers financing to members and non-members alike so that anyone can apply for a loan here. The primary requirement here is that you must have at least $1500 in savings available when applying for an auto loan. This is one of very few lenders we found who requires this.
Another thing to consider is that Navy Federal Credit Union does not typically offer loans for cars more than seven years old. If your vehicle isn’t brand new or relatively recent, there’s a good chance you’ll need to keep searching elsewhere. That said, this is a great place to start your search.
Navy Federal Credit Union offers a few different plans depending on how much you need and for what term length. The longer you need to pay off your loan and the more money you need, the higher the interest rate you’ll get. For instance, if you only need $5000 but want it paid back over 36 months (three years), Navy Federal Credit Union will charge around 11% interest. If the same loan were paid off in 12 months, the interest rate would be approximately 7.24%.
State Employees Credit Union’s car loans for poor credit
Another excellent option for people with bad credit or no credit at all is State Employees Credit Union. As a federal-run organization, this company offers its services to anyone who lives, works, or goes to school in North Carolina and serval other states. To apply for an auto loan with them, you must be a member of the credit union.
You’ll have better luck getting approved if your car is fairly recent and still in good shape. If your vehicle is older than ten years, you might be out of luck at this lender.
You can apply for a loan up to $25000 with State Employees Credit Union, and the interest rates vary depending on how much money you’re asking for and what term length you need it over. This rate also varies based on your credit score. If your score isn’t excellent, you may be charged a higher interest rate than the advertised “as low as” number.
Car financing for bad credit from Northwest Federal Credit Union
Next on our list are poor credit auto loans from Northwest Federal Credit Union. This lender operates in Washington DC, and it offers its services to both members and non-members alike—all you need is a social security number, and you can get started.
You might not be approved right away if your credit isn’t the best—Northwest Federal Credit Union looks at both your income as well as how long you’ve been at your job. If you’re new to the workforce, they’ll take a little bit longer evaluating you.
However, if approved, Northwest Federal Credit Union will likely offer decent rates for those with poor credit as long as their car is relatively recent and in good condition. You can also apply for up to $25000 worth of credit.
NASA Federal Credit Union’s bad credit car loans
NASA Federal Credit Union has so much to offer, and they’ll even consider you for a loan if your credit isn’t the best. To apply, you need to be an active duty member or employee of any branch of the United States armed forces or anyone who has worked for NASA in the past.
If you are approved, however, this lender is great. You can apply up to $100000 worth of credit through them, and they will evaluate your car reasonably quickly—you’ll know within 30 seconds whether or not they’re willing to work with you. They also have amicable rates—you may even get approved for as low as 2.49% APR.
Consumers Credit Union’s auto loan for bad credit
Another great place to apply for an auto loan is Consumers Credit Union. You can apply even if your credit isn’t the greatest, and you’ll likely be approved as long as you have a steady job.
If accepted, they will offer their services at a range of interest rates—you might get anywhere between 0% and 20% APR, depending on how much credit you’re asking for. You can also apply up to $25000 worth of credit if your car is reasonably recent and in good condition.
However, as with most lenders, the longer you need to pay back your loan, the more money you borrow will determine what rate they’ll charge—this varies between 2% or as high as 25%.
Poor credit car loans from MyAutoloan.com
You can get an auto loan with a bad credit score from MyAutoloan.com too. However, they only offer their services in certain states, so check to make sure they operate where you live before getting started with an application.
If accepted by MyAutoLoan.com, you can apply up to $25000 worth of credit, and your loan term can be anywhere between one and seven years. They’ll also give you 0% interest for the first six months, which is a fantastic deal.
They don’t look at how long you’ve been with your job when reviewing applications, but they do require that applicants have a steady income in order to secure credit approval—if you’re self-employed, this might not be the right lender for you.
Capital One auto financing for bad credit
Last but not least on our list is Capital One Auto Finance. They offer many different services, including loans for bad credit. You can apply online or through their mobile app, and they’ll work with you to get the loan approved—even if your score isn’t amazing.
Capital One Auto Finance offers a massive amount of opportunities for getting approved for a loan. They provide loans for bad credit, and their rates vary depending on the amount of money you’re asking to borrow and how long your repayment period will be—but typically, they’ll hover around 12% or 23%.
If accepted, you may be able to apply up to $50000 worth of credit. This is a reasonably large loan, so you can feel confident that if approved, they’ll work with your budget.
It’s important to remember that this lender will accept not everyone—if you’re self-employed or have an unusual income, it might be harder for them to approve your loan.
All of these lenders are great options for people with bad credit looking to get an auto loan. They’re all very different, so you should compare them before making your final decision on who will provide the best service—and rates.