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Can I Get a Car Loan w/ 600 Credit Score? (Rates & Options)

  • A 600 credit score can qualify you for a car loan, but you will face higher interest rates and limited options.
  • Consider saving for a larger down payment and seek lenders that specialize in lower credit scores to improve your chances.
  • Call The Credit Pros to evaluate your situation; they can potentially help you improve your score and make securing a car loan easier.

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Related content: Can I get a car loan with a 600 credit score? Interest rates? Options?

You can get a car loan with a 600 credit score, but expect higher interest rates and fewer options. Interest rates average about 9.62% for new cars and 13.72% for used cars. To boost your chances, save for a larger down payment and seek lenders that cater to lower credit scores.

Lenders like CarFinance247 and First Response Finance specialize in loans for people with a 600 score or below. You don’t always need a co-signer, but having one can improve your approval chances and help you get better terms. Collect necessary documents, like proof of income and identity, to make your application smoother.

Call The Credit Pros today. We’ll evaluate your situation during a relaxed conversation and help you improve your chances of securing a car loan with your current score. Don’t wait to explore your options!

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    Can I Get A Car Loan With A 600 Credit Score?

    Yes, you can get a car loan with a 600 credit score. However, your options may be limited compared to those with higher scores. Lenders often consider a 600 credit score as fair, which means you might face higher interest rates, making the loan more expensive overall.

    To improve your chances of approval, consider saving for a larger down payment. This reduces the loan amount and shows lenders you are financially responsible. You might also want to explore lenders who specialize in working with lower credit scores. Some lenders actively provide loans for individuals with credit scores around 600, so researching these options can be beneficial.

    It’s helpful to gather all necessary documentation before applying. This can streamline the process and demonstrate your reliability as a borrower.

    Lastly, while you can get a car loan with a 600 credit score, being informed and prepared enhances your chances of securing favorable terms.

    Interest Rates For Car Loans With A 600 Credit Score

    Interest rates for car loans with a 600 credit score usually fall within the nonprime category. Based on data from Experian, you can expect an average annual percentage rate (APR) of about 9.62% for a new car loan and around 13.72% for a used car loan.

    Your credit score significantly impacts the rate you receive. With a score around 600, you should anticipate higher rates compared to those with scores above 660. Lenders see you as a higher risk, which is reflected in the rates.

    When comparing offers, focus on the APR. This includes both interest rates and additional fees, giving you a comprehensive view of the total cost. Generally, new car loans have lower rates than used car loans. Various lenders may offer slightly different rates, so you should shop around and compare multiple options.

    • Compare APRs to get a full picture of costs.
    • Expect higher rates with a 600 credit score.
    • Shop around for the best rate.

    Finally, understanding your options and comparing offers will help you make an informed decision on your car loan journey.

    What Loan Options Are Available For A 600 Credit Score?

    With a 600 credit score, you have several loan options available, although your choices may come with higher interest rates. Here are some specific types of loans you can consider:

    • FHA Loans: These government-backed loans cater specifically to individuals with lower credit scores. With a score of 600, you may qualify for one with a down payment as low as 3.5%. Just be aware of the mortgage insurance premiums that apply.

    • Personal Loans: You can access personal loans from various lenders who are willing to work with lower credit scores. While these loans might come with higher annual percentage rates (APR), many lenders offer quick funding.

    • Credit Unions: If you're a member, credit unions often provide personal loans with flexible terms and more lenient credit requirements compared to traditional banks.

    • Subprime Auto Loans: For purchasing a vehicle, you can explore subprime auto loans offered by specific lenders targeting borrowers with lower credit scores.

    • Peer-to-Peer Lending: Platforms that connect borrowers with individual investors may be a viable option. Interest rates can vary widely based on your credit situation.

    It’s important that you compare rates, fees, and terms to find the option that best suits your financial circumstances. Big picture, exploring these options can help you secure a loan even with a 600 credit score.

    How Does A 600 Credit Score Affect Loan Terms?

    A 600 credit score significantly impacts your loan terms. Lenders see you as a higher risk, leading to higher interest rates and fewer options. You might face interest rates that are several percentage points higher than those with better scores. For instance, while someone with a score above 700 might secure a 4% loan, you could end up paying 8% or more.

    Your borrowing amount and loan term length may also be restricted. Many lenders will require a larger down payment or limit your financing to used cars. Additionally, getting a personal loan or credit card might involve higher annual fees or lower credit limits.

    To improve your loan terms, you should:
    • Compare offers from different lenders.
    • Look for lenders who specialize in fair credit scores.
    • Consider a co-signer to improve your chances.

    Overall, understanding how a 600 credit score affects loan terms allows you to make informed decisions and find the best financial options available.

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    What Lenders Offer Car Loans For Lower Credit Scores?

    Several lenders offer car loans for lower credit scores, giving you options if your score is around 600 or lower. Here are some lenders to consider:

    • CarFinance 247: They provide bad credit car finance, focusing more on your current situation than just your credit score, making approval easier.

    • Carplus: Specializing in bad credit car finance, they offer various financing options and aim to simplify the loan process for those with poor credit.

    • First Response Finance: Known for excellent communication and quick service, they help individuals with bad credit secure car loans.

    • Zuto: They match you with lenders willing to work with your financial situation, catering to people with lower credit scores.

    • TrustFord: They offer financing options specifically designed for customers with bad credit, providing competitive rates and flexible repayments.

    These lenders typically perform a soft credit check, which does not affect your score. They also consider your income and affordability for monthly payments, making it feasible for you to obtain a loan despite a lower credit rating. As a final point, you can explore what loan options are available for a 600 credit score in a subsequent section of the article.

    Is A Co-Signer Required For A Car Loan With A 600 Credit Score?

    When you have a credit score of 600, you typically don't need a co-signer for a car loan, but it can help your chances. Lenders view a 600 credit score as subprime, indicating higher risk.

    A co-signer with a strong credit history, ideally over 700, can boost lender confidence. Their solid credit acts as a safety net, ensuring payments are covered. This can result in better loan terms, such as lower interest rates, which is crucial given your current score.

    If you seek a co-signer, make sure they understand the responsibility. They will need to provide proof of income and stable employment history. This assurance makes lenders more likely to approve your loan application.

    To put it simply, while not mandatory, having a co-signer with good credit can greatly improve your loan approval chances and secure better terms.

    How Can I Improve My Chances Of Approval For A Car Loan?

    To improve your chances of approval for a car loan, focus on boosting your credit score:

    Check and Correct Your Credit Report: Regularly review your credit report for errors. Dispute inaccuracies to boost your score. Look for missed payments or high balances that could lower your score.

    Build Your Credit: Use secured credit cards or credit-builder loans to enhance your credit history. A longer credit history helps lenders see you as a responsible borrower.

    Present Stable Employment: Show proof of consistent income, such as pay stubs or tax returns. Lenders prefer applicants with stable jobs and income.

    Consider a Co-Signer: If possible, find a co-signer with a good credit score. This can significantly increase your chances.

    Make a Larger Down Payment: A larger down payment shows lenders you’re serious and can afford the loan. Aim for at least 20% of the car’s price.

    Shop Around for Loan Offers: Compare loan offers from different lenders. Some specialize in loans for lower credit scores. MyAutoloan, for instance, provides options for scores as low as 575.

    Limit Applications: Avoid applying for multiple loans at once. Each application can lower your score. Focus on one or two lenders to prevent this.

    In short, improving your credit score, presenting stable income, making a larger down payment, and carefully choosing lenders can greatly enhance your chances of car loan approval.

    Required Documentation For A Car Loan With A 600 Credit Score

    To secure a car loan with a 600 credit score, you must prepare specific documentation. Here’s what you need:

    • Proof of Identity: Provide a government-issued ID like a driver's license or passport to confirm your identity.

    • Social Security Number: Lenders require this for credit checks and identification.

    • Proof of Income: Show your last pay stubs or bank statements. Lenders need to see you can make monthly payments.

    • Employment Verification: Some lenders might contact your employer to confirm your employment status.

    • Proof of Residence: Present a utility bill or lease agreement that verifies your current address.

    • Credit Report: Obtain your credit report beforehand to understand your credit standing and any potential issues.

    • Loan Application: Complete the lender's specific application form, which usually involves disclosing your financial history.

    Having these documents ready can ease the loan application process and improve your chances of getting approved despite your lower credit score.

    To finish, gather all required documentation and focus on presenting a strong case to your lender.

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    How Does My Income Impact My Car Loan Approval Chances?

    Your income significantly impacts your car loan approval chances. Lenders assess your ability to afford loan payments alongside your current debt obligations. They use your debt-to-income ratio (DTI), which you calculate by dividing your total monthly debt payments by your gross monthly income. Generally, a lower DTI indicates better creditworthiness, improving your approval chances.

    Lenders want to see that your income supports all your debts, including the new car loan. If your DTI is below 36%, you are viewed positively, making it easier for you to get approved. Additionally, if you have a steady job, you are more likely to secure a loan. Non-traditional income sources, while countable, can complicate approval.

    Lenders also examine payment-to-income (PTI) ratios, reflecting your car payment as a percentage of your income. A smaller car payment portion of your income presents a lower risk to lenders, making approval more likely.

    In essence, highlighting stable income and demonstrating a low DTI improve your chances of getting the desired car loan.

    Consequences Of A Car Loan With A 600 Credit Score

    If you take out a car loan with a 600 credit score, you might face several challenges. First, you will likely encounter higher interest rates, as lenders see your score as a higher risk. This can make your monthly payments more expensive.

    You may also find that your loan amount and term length are limited. This restriction could force you to finance a less expensive vehicle or pay off the loan in a shorter time, increasing your overall costs.

    A higher likelihood of needing a co-signer is another consequence. You might need someone with better credit to co-sign your loan, sharing the financial responsibility and risk with you.

    On the bright side, timely repayments can help improve your credit score over time. Making your payments on time boosts your credit standing, while missing them further harms it.

    To wrap up, understand that your loan terms will affect both your current finances and future borrowing opportunities. It's critical that you choose a loan that fits your budget to avoid unnecessary strain.

    Can I Negotiate Better Loan Terms With A 600 Credit Score?

    Yes, you can negotiate better loan terms with a 600 credit score, but your options may be more limited compared to those with higher scores. Lenders often view a 600 credit score as "fair" and potentially risky. This means you might face higher interest rates and less favorable loan terms.

    To improve your negotiation stance, you can take these steps:

    • Know Your Credit Score: Understand your credit history and score. This knowledge empowers you during negotiations.

    • Research Current Rates: Investigate prevailing interest rates from different lenders to have a benchmark for negotiation.

    • Highlight Strengths: Emphasize your stable income or good repayment history to show your creditworthiness.

    • Shop Around: Don’t settle for the first offer. Compare quotes from multiple lenders to find better options.

    • Mention Competing Offers: If you have better offers from other lenders, let your preferred lender know. They might adjust their terms to keep your business.

    On the whole, by preparing and approaching negotiations strategically, you can still secure better loan terms even with a 600 credit score.

    What Should I Know About Down Payments For Car Loans With A 600 Credit Score?

    When getting a car loan with a 600 credit score, you should know that a down payment is crucial. Lenders often expect you to provide a larger down payment, usually at least 10-20% of the car's price. This helps lower the loan amount and reduces the lender's risk.

    A higher down payment can lead to more favorable loan terms, including a lower interest rate. This is particularly beneficial since lenders often charge higher rates for lower credit scores. You should shop around for lenders who offer competitive rates, even for subprime borrowers.

    If you can manage a substantial down payment, it significantly improves your chances of approval. Save up as much as you can to present yourself as a lower-risk borrower. A larger down payment also helps you avoid being upside down on your loan, where you owe more than the car is worth.

    You should have a clear plan for your down payment when approaching lenders. This shows your commitment and can positively influence their decision.

    Bottom line: Prepare to make a substantial down payment and shop around for the best rates to secure the most favorable car loan terms despite your 600 credit score.

    Inaccuracies hurting your Credit Score?
    Securely review your full 3-bureau Credit Report (with a real expert).

    By clicking ‘Get Started’ I agree by electronic signature to: (1) be contacted by The Credit Pros by a live agent, artificial or prerecorded voice, and SMS text at my residential or cellular number, dialed manually or by autodialer even if my phone number is on a do-not-call registry (consent to be contacted is not a condition to purchase services); and (2) the Privacy Policy and Terms of Use.

    How Do Different Types Of Vehicles Affect Loan Options For A 600 Credit Score?

    Different types of vehicles directly affect your loan options if you have a 600 credit score. Lenders consider the type of vehicle to determine your loan terms, including interest rates and approval chances.

    • New vs. Used Vehicles: Buying a new vehicle usually results in higher loan amounts but often comes with steeper interest rates for low credit scores. Used vehicles might offer better loan terms because they are generally less expensive, reducing the amount you borrow.

    • Car Make and Model: Luxury or high-performance vehicles might lead to higher interest rates or even loan denial. Stable brands known for reliability are more appealing to lenders, creating better financing options for you.

    • Vehicle Age: Older vehicles can attract lower loan amounts since lenders see them as riskier investments. If you're financing an older model, you might face higher interest rates and stricter terms.

    • Vehicle Type: Trucks or SUVs may have different financing options compared to sedans. Lenders often view these types as more favorable investments, possibly improving your loan conditions.

    In a nutshell, choosing a reliable, less expensive vehicle can enhance your loan options, even with a 600 credit score. Consider these aspects to align better with your financial goals. If you want to learn more about loan options for a 600 credit score, check our upcoming section on what loan options are available for you.

    Long-Term Implications Of Car Loans With A Low Credit Score.

    Taking out a car loan with a low credit score can have significant long-term implications. When you apply for the loan, your credit score usually drops due to the hard inquiry, costing you around 1 to 5 points. However, you can recover these points by making timely payments and reducing your loan balance over time.

    Managing the loan responsibly can positively affect your credit mix, especially if you don't have other forms of credit. Consistent, on-time payments can gradually increase your credit score. While paying off the loan early might initially reduce your score if it’s your only active installment loan, it also removes debt and frees up funds for other obligations.

    You need to understand that managing a car loan responsibly can pave the way for better financing options in the future. You may qualify for credit products with lower interest rates. However, missing payments can severely damage your score, making it harder to secure loans down the line.

    • Make consistent, on-time payments to improve your credit score.
    • Understand the impact of your credit mix on your score.
    • Be aware that missed payments can harm your credit.

    All in all, successfully managing a car loan with a low credit score helps you build your credit history and opens up better financial opportunities.

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