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Can I get a car loan with a 400 credit score?
I made some poor decisions when I was young and my credit has never recovered. After checking my credit score the other day, I found it was still around 400. The major problem is that I need a car and I don’t have the money to pay cash for one. Will a 400 credit score qualify me for a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Although many lenders work with bad credit, you may not be able to get a
car loan
with a 400 credit score. This credit score puts you in the deep subprime range, which means you’re a high enough risk that most lenders will deny you a car loan.However, all is not lost. You still have one more option: buy-here-pay-here dealerships. Buy-here-pay-here dealerships are car dealers that offer in-house financing to risky borrowers. In some cases, they may not even pull your credit. Instead, they offer loans with sky-high interest rates. If you apply for one of these loans, don’t be surprised by interest rates of 20% or more.
Since your credit score is so low, you may also want to consider a cosigner. If you can find a friend or family member with good credit who’s willing to cosign, you increase your chances of approval and may even get a better interest rate.
But before you decide to get a car loan with a 400 credit score at a buy here pay here establishment, ask yourself a few questions:
- Do you really need a car that requires a loan? Or can you buy a cheaper one with cash?
- Is your money better spent paying down other debt?
- Are you willing to pay thousands of dollars in interest just to have a nicer car?
Only you can answer these questions. But don’t forget that if you purchase a car at a buy here pay here lot, the lender will likely require you to have full coverage car insurance. Full coverage insurance can get rather expensive, so you need to budget for it accordingly. The best place to start is with the
Jerry
app.Jerry is a licensed insurance broker that provides quotes from dozens of top-rated and well-known car insurance companies. After you find a great rate, Jerry can help you buy insurance and cancel your old policy. Customers save an average of $887 per year!
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- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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