Transportation is important for many parts of your life – getting to and from work, the activities with your family, appointments, and even to buy groceries. Unless you live in a big city where transportation typically only involves buses, taxis, and subway systems, chances are you might be looking for a vehicle. Whether you are looking to buy new or used, chances are also good that you will need a loan in order to make buying that vehicle possible. If you have bad credit, finding a low interest auto loan can seem just as challenging as finding a used car that doesn’t have a single dent or scratch.

Begin with a Good Interest Rate

Before you resign yourself to buying a car with a high interest rate because of your credit rating, take the time to do some leg work that can easily save you some money in the long run. Start by finding out what good credit would typically get you for an interest rate through local lenders. Many banks post online what their auto loan rates are, depending upon how many years you want to carry the loan. Keep in mind that these rates are usually for those with good/excellent credit scores so the advertised rates may not apply to your situation. However, this will give you a base from which to work.

• Find out your credit score – you can obtain a copy of your credit report from all three bureaus once a year for free at

• Compare your credit score with the minimal rating needed to qualify for a “good credit” interest loan.

• If your rating is close to those good credit scores, you will be more likely to be able to obtain a loan with low interest.

• If your credit score is drastically lower, we reccomend you assess your financial situation to see if there is anything you can do to bolster your score before you apply with a lender.

• Don’t change jobs during this time – unless it dramatically improves your financial situation. Showing steady employment will be necessary when applying for a low interest loan with bad credit, and some lenders may want to see at least a consistent 1-2 year work period.

• Make all of your minimum payments on time. Even if your credit score is negatively affected by decisions you made two years ago, you can positively improve your chances by making your current decisions show responsibility and maturity in relation to finances.

These are all important factors when it comes to preparing to seek an auto loan with bad credit, but don’t forget the importance of selecting the right vehicle either. Lenders look at the value of the car as well – if you are more concerned with the rims or the sound systems, you might lose out on low interest rates from lenders who are willing to help you finance economical vehicles.

Shop Around for the Lowest Rates

Fortunately for those with bad credit, there are many options when it comes to a lender willing to finance, including those who offer reasonable and low interest rates. Take the time to shop around and search for lenders that will give you the best rate.

• If you belong to a credit union, start there. Credit unions have good reputations when it comes to lending to those with bad credit histories, and doing so with low interest rates.

• Work with the banking institution where you keep your accounts, especially if you don’t have a poor history with them. If you have an account in good standing with no overdraft fees recently and proof of consistent deposits, you can increase your chances of finding lower rates.

• Look online. There are many trustworthy sources online that will offer low finance rates, even for those with bad credit histories. As with doing any business through online vendors, research your lender and check with referrals to make sure that your loan is legitimate and that your personal details are kept private.

• Use the internet to compare rates. This can help take a lot of work out of travelling from one meeting at a bank to another. Some internet vendors will also do this legwork for you – but again – be wary with sharing personal information online until you have verified the legitimacy of the company.

• Look to your local dealers. They want to sell cars and they know that if they help you secure a loan, they are more likely to sell that car. Before you walk into a dealership, though, know your credit score, and know what your credit union or local bank might offer you. Never walk in to a dealer and take the first offer when you don’t know what another company might be able to offer.

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Moe Bedard
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My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.

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