If you are looking for a secured car loan for bad credit in the US, it can be challenging to find one. However, we will help you find one to help you get behind the wheel. There are lenders that specifically offer car loans for bad credit. Some lenders offer interest rate discounts or give you the ability to apply for prequalification. Others allow you to apply for a car loan with a co-applicant. In this article, we are going to highlight bad credit secured car loans.
Contents
- 1 How to Get a Secured Car Loan
- 2 Secured Loan Requirements
- 3 Steps to Take Before Applying for a Car Loan
- 4 Best Secured Car Loans for Bad Credit in the U.S
- 5 Loans Secured On Your Car
- 6 Can I Use My Car as Loan Collateral?
- 7 How to Lower the Cost of Your Car Loan
- 8 Summary of Secured Car Loans for Bad Credit
How to Get a Secured Car Loan
To get secure car loans with bad credit, some lenders ask for security beyond the car itself. This is a requirement, especially if you have a poor credit score, or you have a low income. If the lender asks for collateral, then you as the borrower must be the legitimate owner.
Once you have offered the security to the lender, a car loan will be advanced to you. When the terms of the loan are completed, the lender releases the security to you. If you default in repaying the loan, the lender will begin the legal process of possessing the property.
Secured Loan Requirements
You need to meet the following requirements to get bad credit secured car loan.
- Income. You will need to provide proof of income to get a secured car loan for bad credit. You can provide a paycheck or a copy of tax returns or bank statements for employed persons.
- Proof of employment. You must prove that you have a stable source of income for at least six months. A payslip can be used as proof of employment.
- Residency. You must also provide proof of residency. You must show that you have been present at home for at least 12 months.
- Driver license. Some lenders will require to see proof that you know how to drive. You can also use your driver’s license as proof of identity.
- ID document. Lenders will need proof of identity of the person taking secured car loans bad credit. You can use an ID card or passport to prove.
Steps to Take Before Applying for a Car Loan
You need to do the following before applying for a car loan in the UK.
- Check your credit score
- Assess your income and debt
- Prove that you are financially stable
- Make a down payment to lower your rates
- Determine how much you can afford to repay
Best Secured Car Loans for Bad Credit in the U.S
If you are looking for a secured car finance bad credit, there are many providers that can help you. The following are some secured car loans for bad credit you can consider in the U.S.
Carvana
Carvana is an excellent secured car finance bad credit. It allows one to shop for car financing in one place. It only offers loans to finance its in-stock inventory of used or new cars. You can use to shop for a car online and apply for auto financing. You can apply for prequalification, allowing you to see estimated rates and terms you can qualify for without hurting your credit score.
Terms
- Minimum income of $4,000 a year
- Does not accept a co-signer
Capital One
Capital One is an excellent bad credit secured car loan. You can apply for prequalification with Capital One auto finance and check the loan rate and terms. This will not affect your credit score. It offers car financing for new and used cars from dealers. You can use it to refinance your auto loan.
Terms
- Minimum monthly income of $1,500 or $1,800 depending on your credit
- Minimum loan of $4,000 while the maximum is determined by your credit score
- You must use Capital One auto finance at one of its participating car dealerships
New Roads Autoloans
New Roads Autoloans helps you get car finance when you cannot qualify for one due to poor credit scores or have been turned down in the past due to bankruptcy. It offers car finance for pre-owned and new car models. They have low-interest charges while they also offer interest rate discounts. You didn’t need a down payment to qualify for car finance.
Terms
- You can apply for car finance with a co-buyer
- You can apply even if you have a repossession or a bankruptcy
- No down payment is required, but you will need to pay higher interest rates
Auto Credit Express
Auto Credit Express is a secured car finance bad credit dealer. The lender has been in business since 1999, hence is reputable. You can fill out a short form on ACE’s website to start the buying process. To get car finance, you need to fill in an easy 30-second pre-qualification form.
Terms
- Minimum $1,500 income per month
- Interest rates range between 3.99% and 29.99%
Car Loan
Car Loan specializes in auto loans for bad credit, bankruptcy and first-time buyers. You get same-day approval with no-obligation application and no application fees. Car Loans provides over 1,000 car buyers with financing every day. When you submit an application, they will call you back before 24 hours are over.
Terms
- No application fees
- Same day approval with the no-obligation application
Loans Secured On Your Car
Did you know you can use your car as collateral to get a loan? Yes. If you need a personal loan, there are many companies offering loans secured on your car. Offering your car as collateral is a good bet especially if you have poor credit scores.
Why Use Your Car as Collateral?
There are many benefits of using your car as collateral when borrowing a personal loan. They include:
- Easy to qualify for a loan.
- Lower rates. Loans that are secured are less risky hence lower interest rates.
Can I Use My Car as Loan Collateral?
Yes. You can get loans secured on your car. The following are some of the companies that can help you get a loan by using your car as collateral.
Caribou
Caribou offers loans secured in your car. They offer a fast and easy auto refinance. You can check for their rates without impacting your credit scores and with no hidden costs.
Features
- APR of between 2.32% and 36.00%
- Prequalify in minutes without giving your SSN++
LightStream
LightStream is an auto finance lender with fixed interest rates. You can get funded as soon as the day you apply. You don’t need any appraisal; neither do they have restrictions on age or mileage.
Features
- Loan of between 5,000 and 100,000
- Same-day funding
- Loan period of between 24 to 84 months
- Average APR of 5.990%
Autopay
Autopay can also help get a loan using your car as collateral. Whether it is auto finance, a new car loan, or a lease buyout, they can help you.
Features
- Rates of as low as 2.99%
- BBB rating of A+
- Loan period of between 48 and 60 months
How to Lower the Cost of Your Car Loan
You can lower the cost of your car loan by taking the following measures:
- Get a co-signer
- Shop online
- Compare rates between different lenders
- Make a down payment
Summary of Secured Car Loans for Bad Credit
Secured car loans bad credit in the US is a great option for people wanting to buy a car and have poor credit scores. Most of them allow you to apply with a co-buyer, making it easier to repay the loan. Besides the secured car loans for bad credit, there are also bad credit loans secured against car. These loans can help you get a loan and secure it using your car. You can continue driving your car as you continue to repay the loan.
