How to Buy a Car with Bad Credit and No Co-Signor?

Did you know that buying a car with bad credit and no co-signor is possible? Several car dealerships and lenders don’t pay too much attention to your bad credit or lack of co-signor. Instead, they choose to look at your ability to repay the loan. As such, they do not require you to have a particular minimum credit score to secure a loan.

However, your financing terms will likely be more expensive than someone with good credit. Lending companies usually calculate risk on a car loan based on a customer’s credit score. They consider you risky if you have a poor credit group, resulting in higher APR and monthly payments. This article discusses buying a car with bad credit and no co-signor. Keep reading for more information.

What Credit Score Do You Need to Buy a Car?

Credit scores range between 300 and 800. With a score above 670, you have good credit and will likely get car financing from mainstream lenders. Most lenders consider a credit rating below 620 to be sub-prime. You can still lease a car without credit or poor credit using alternative ways to finance a car. Since the credit score is only one of the things determining qualification for a car loan, it won’t prevent you from accessing financing if you perform well in the other considerations.

How to Buy a Car with Bad Credit and No Co-Signor?

You have just discovered how bad your credit is. You’re afraid to approach mainstream lenders because you fear they won’t grant you a car loan. Even if the bank gave you a loan, it would be too expensive for your comfort. Don’t give up. With proper research and planning, you should find a way to buy a car. Here is how to buy a car with bad credit and no co-signor:

1. Check Your Credit and Strive to Improve It

Long before you consider car financing, check credit. Contact Equifax, TransUnion, or other credit reference bureaus for your credit reports and review them for errors and inaccuracies. If you find any errors, raise a dispute with the lenders. Inaccurate credit reports will likely lower your credit score further, making it impossible to get car financing.

Prior knowledge of your credit score can help you set expectations before approaching the bank for a car loan. You can also make adjustments and increase your score before submitting a loan application. Once your credit score improves, you will get lower interest rates and better car loan terms, saving you money with time. Here are simple strategies to improve your credit score:

  • Reduce Your Debt: Reducing your debt makes it easier for you to get approval for a car loan. It also raises your credit utilization ratio, calculated by dividing the revolving credit balance by your overall credit limit. Ideally, your credit utilization should be below 30%.
  • Pay Bills on Time: Payment history is one of the most significant aspects of determining your credit. You can improve your credit score by keeping your record spotless. That means clearing all due accounts and payments from the past and current bills.
  • Use Secured Credit Cards: A secured credit card has the backing of a cash deposit. The cash deposit is usually the same as the credit amount paid upfront, reducing the chances of you defaulting on your debt. A secured credit card can improve your credit within a few months of using it.
  • Clearing Collection Accounts: Clearing a collection account prevents a possible suit over debt. Once you pay it off, the collection agency ceases reporting the debt to the credit reference bureaus, improving your credit.

2. Save for a Down Payment

Before you get car financing, the bank will typically ask you for a down payment, which is part of the amount you should pay for the car. A down payment helps you qualify for a car loan more effortlessly, especially with bad credit and no co-signor. Without a significant down payment, the lender assumes the greater risk, losing more money if you fail to repay the car loan on time.

Similarly, putting down more money reduces the monthly payments. The lender will likely charge you less interest since you will be borrowing a reduced amount on the car. You will, therefore, pay interest on a significantly smaller amount, reducing the total interest.

Besides, a down payment may substantially reduce the interest rate. Most lenders determine interest rates using the loan-to-value ratio, which refers to the ratio of the loan amount to the car’s value. Your monthly payments will likely be significantly lower with a reduced interest rate.

3. Determine If You Can Afford the Car

Once you sign on the dotted line, the lender will require you to make monthly payments. It would help if you were sure that you could afford them. If you can’t, you will likely default on your loan and hurt your credit even further. However, affordability goes beyond the loan cost and may include fuel cost, auto insurance, regular maintenance, parking expenses, and property taxes. Put all of these into your budget to avoid any surprises.

In a bid to lower their monthly payments, some people choose six-year or seven-year repayment periods. However, an 84-month loan term may result in higher interest, making the loan more expensive. Also, your chances of defaulting on the loan are higher. Selling the car can also prove difficult since you might have a loan balance that’s more than the car’s worth. You may want to use an auto loan calculator to estimate the amount of interest for any car loan.

4. Seek Help from Different Types of Lenders

If you have bad credit, you can increase your chances of getting car financing by considering several options. By comparing loan terms and rates, you can easily find financing that meets your needs and budget. The following are some of the lenders you can approach:

  • Your Bank or Credit Union: Do you have a bank or credit union where you regularly transact? You can approach them to find out if they can give you a car loan. Most banks and credit unions may treat you favorably if they have a relationship with you. They can even overlook your bad credit or lack of co-signor.
  • Specialist Car Dealerships: If your bank or credit union turns you down because of your bad credit, why don’t you approach a dealership with a unique financing department. The dealership will likely overlook your bad credit and go-ahead to give you a loan. Essential factors include employment history, income, and residence to these lenders. Their loan programs are for borrowers like you. Besides, they might not care that you have no co-signor.
  • Online Lenders: Several online lenders seek to help people with bad credit secure car loans. They usually require borrowers to apply for prequalification on the websites. After prequalification, you’ll see the loan interest rate and terms for which you qualify. However, prequalification doesn’t guarantee loan approval. The lender has to do further checks just in case they missed anything.
  • Buy-Here, Pay-Here Dealerships: If other lenders cannot approve you for a car loan, why don’t you seek one from a buy-here, pay-here dealership. However, this should be among your last options. Even though these dealerships offer loans to individuals with bad credit, their interest rates can be extremely high. Eventually, you will pay much more than in banks or other lenders.

5. Pick a More Affordable Vehicle

If you want to know how to buy a car with bad credit and no co-signor, you should pick a more affordable vehicle. It works the same way as a down payment by increasing your chances of approval and the amount of money in monthly payments. Essentially, you should pick a vehicle that fits squarely into your budget. In the end, you will make all your payments on time and improve your credit rating. Later on, you can buy a more expensive car, taking advantage of your improved credit score.

6. Second-Chance Car Loans

The purpose of second-chance car loans is to allow those with bad credit to get car financing. Likely, your bank has turned you down by your bank or credit union. A second-chance lender can give you financing options that make it easier to get approval. However, you shouldn’t settle for just any lender. Choose a reputable company with a proven track record of good customer experience. You may get second-chance car loans from credit unions or online lenders and higher interest rates and fees. For that reason, you need to consider your options carefully.

7. Get a LoanPreapproval

Preapproval happens when a lender checks your credit and other details to determine how much they can give you. Once you get a preapproval report, you will have a better idea of the car financing you can afford. It also removes any worries about getting approved for a particular car. Since you know your vehicle’s ideal price range, you can narrow your focus to that category and no other. Besides, you can use your preapproval report to negotiate a reasonable price with a different lender.

Best Bad Credit Online Car Loans Providers with No Co-Signor

Online lenders provide a go-to option if you can’t get approval for a car loan with bad credit. They make getting a car loan with bad credit and no co-signor much easier. The following are some of the best online lenders that specialize in customers with bad credit:

1. Auto Credit Express

Auto Credit Express makes the loan application process simple. Right on their website, you can fill in an application form at your convenience and get approval in a record 10 minutes after a review by its network of car dealers and lenders. Once you obtain financing, you can pick your car on the spot. However, you need to have a $1,500 income at the very least. With this lender, you do not need a co-signer.

Since its establishment in 1999, the company has advanced over $1 billion to car buyers with bad credit. It specializes in offering loans to people with no credit, bad credit, repossession, or bankruptcy. You qualify for a loan by filling a 30-second prequalification form and getting approved in 10 minutes.

2. Car.Loan.Com Auto Loan

With Car.Loan.Com, you can get approved for car financing if you prove that you have an income. Applicants also need to have a stable residence and a valid driver’s license. Despite your bad credit, meeting these conditions demonstrates a regular life and the ability to repay credit. Their website has helpful resources such as a payment calculator and a loan estimator to determine the amount of loan you can get.

The application on the website is free and doesn’t come with any obligation. It lends to customers with no credit, bad credit, bankruptcy, and subprime credit rating. It doesn’t charge any application fee and has affordable payments. With this lender, you can get a same-day approval without a sweat.


Apart from providing credit to individuals with bad credit, has valuable information on how to get affordable car loan payments. They have interactive charts through which users can estimate their monthly payments and tutorials on car loan interest rates.

On this lending network, you won’t get vehicles that are hard to insure, repair, and can easily break down. Also, you won’t get a loan for repossessed cars, auctioned cars, salvage titles, utility vans, or high-end sports cars. They have loans for new, used, and car refinancing. Within a few minutes of making your application, the lender will give you up to four matching offers. In a record 24 hours, you will receive an online check or loan certificate.

The Bottom Line

Bad credit and the lack of a co-signor shouldn’t stand in your way to getting car financing. This article has discussed how to buy a car with bad credit and no co-signor. With the invaluable information above, there’s no reason why you shouldn’t own a car today. With any of the three online lenders described here, the loan application process is more accessible than before. So, what excuse do you have?

Frequently Asked Questions (FAQ)

What credit score do you need to buy a car without a co-signor?

You do not need a credit score to purchase a car without a co-signor. You don’t even need car financing if you can pay for it upfront. If your credit score is at least 670, you can quickly get funding. However, if you have poor credit, you can secure a loan from lenders that specialize in people in your category.

How can I get a new car without a co-signor?

You can quickly get a new car without a co-signor by working to improve your credit score, saving for a down payment, or working with buy-here, pay-here dealerships.

Can I get financed for a car with bad credit?

Yes. You can get financed for a car with bad credit. Once you know your credit rating, you can determine how much you can afford. Save for a more significant down payment or get preapproved for a loan.

CarsPlan Admin

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