PA Bad Credit Auto Loans

Wary of the impact your credit will have on your rate of interest? You aren’t alone. More than 25% of the population have bad credit. Fortunately, we’re here to help. Many dealerships now have special financing departments that focus on applicants with poor FICO scores, and we can connect you with them.

Simply apply online, and our dealers and lenders compete for your business, which helps maximize your odds of approval. For people with below-average credit, this is a great way to get approved.

Subprime Auto Loan Rates in Pennsylvania

It goes without saying: lower credit scores result in high loan rates. Your actual APR will depend on quite a few factors, including your lender, FICO score, vehicle type, repayment term, and other factors. However, we can give you a range of rates based on our experience in the industry.

FICO Used Vehicle APR New Vehicle APR
660-689 7.67% 7.04%
620-659 12.38% 9.83%
590-619 17.24% 13.79%
500-589 18.28% 15.6%

Yes, these rates are high. Fortunately, there are a number of things you can do to reduce the total interest you end up paying. First of all, steer clear of a lengthy financing term like 5 or 6 years. The longer it takes pay off the vehicle, the more you’ll pay in interest. Second of all, decrease the amount financed by offering a down payment.

If you want to pay less in total interest, consider the following:

  • Opt for 36-48 month financing. The shorter your loan, the less you’ll pay in interest.
  • Offer a down payment. Down payments decrease how much you have to borrow, and consequently the amount of interest you pay on it.

Approval Qualifications

  • Valid Pennsylvania drivers license.
  • Weekly income of $375.
  • Employed for a minimum of 12 months.
  • Any bankruptcy discharged.
  • No repossession in the past 12 months.

What Kind of Vehicle Can I Purchase?

This varies from dealer to dealer, but we’ve listed several of the common requirements below.

  • Vehicles may be new or used.
  • Mileage of 75,000 miles or less.
  • Vehicle 6 years old or newer.
  • Minimum loan amount of $7500.

Many lenders also prefer that you buy your vehicle from a dealer with whom they’ve partnered. If you’re approved through a dealer, then needless to say they will want you to buy your car or truck through them.

Down Payments: Do I Need One?

Many dealers and lenders who approve applicants with bad credit do require a down payment. The good news is, down payments have several benefits:

  • Increased chances of being approved.
  • Less money borrowed.
  • Less interest paid over time.
  • Less risk of being under water on the loan

You’ve probably seen zero down, “sign and drive” promotions advertised in Pennsylvania. If your dealer or lender offers you one of these deals, just be sure you don’t plan to trade in the vehicle before it’s paid off. You could very easily end up in a negative equity situation.

Credit Restoration Through Financing

Yes, financing a vehicle can improve your credit – as long as you keep making the payments. The pay-off event itself is not as important. Rather, it’s the months of making payments in time. Consequently, you’ll want to finance a reasonable, affordably-priced vehicle.

We recommend dedicating no greater than 10% of your income to your car payment. By way of example, let’s have a look at the average numbers for consumers in Pennsylvania.

  • Monthly Income: $2,319
  • Total Vehicle Budget: $417
  • Suggested Payment: $232
  • Leftover Budget for Fuel, Maintenance, etc: $185

Spending more than 10% could result in delayed payments, delinquency, even repossession.

Can I Finance a Car After Bankruptcy?

Yes, most often you can get approved after a bankruptcy.  However, there may be a few additional hoops jump through, including documentation from your trustee.  It depends on what kind of bankruptcy you filed, how long it’s been, and whether it’s been discharged or not.  Your lender will be able to to provide more information.