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Can I get a car loan with a 516 credit score?
I have a 516 credit score after paying off one of my credit cards. I’m well aware that I still need to repair my credit, but I’m in dire need of a car to get to work. Will lenders consider me for a car loan if I have a 516 credit score?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
A 516 credit score puts you in the subprime range of borrowers. Due to your low credit score, lenders may not approve your
car loan
application without a cosigner.However,
finding a cosigner
is always the best-case scenario for borrowers with poor credit. A cosigner is an individual who signs with you on the loan and promises to pay the loan if you fail to do so. Ideally, this person should be a trusted friend or family member. Just remember that if you don’t pay on time, their credit score will take a hit.If you can’t find a willing cosigner, you still have other options. While banks, credit unions, and dealerships are unlikely to approve your loan, you can finance a car with either:
- A lender who specializes in bad credit
- A buy here pay here dealership
Both are experienced in lending to high-risk candidates such as yourself and will usually approve your application. But be warned: your interest rate will likely be in the double digits and as high as 20% or more. Don’t take out a loan with these lenders unless absolutely necessary.
Lenders will require full coverage car insurance before you drive off the lot, which is another expenditure you’ll need to budget for. If you’ve never had full coverage before, shop around with the
Jerry
app to find the best rate possible.Jerry is a licensed insurance broker that will collect quotes from over 50 top-rated insurers in minutes. After you find a great rate, Jerry can help you buy new insurance and cancel your old policy. Users 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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