Bad Credit Auto Loans in Ohio

Wary of the impact your credit will have on your APR rate? We can help! Many dealers and finance companies now have special financing departments that support borrowers with subprime credit, and we make it easy to get approved. All you have to do is apply online, and we match you with a lender based on your location, your income, and your FICO score. We’ll email you the login details to our approval center, where you will be notified of your approval status in as little as 5 minutes.

Interest Rates for People in Ohio with Poor Credit

Steeper interest rates are a fact of life when your credit score is 620 or lower. Your actual APR will depend on several different factors, including your lender, FICO score, vehicle type, financing term, and other factors. Here are a few estimations based on our industry experience.

FICO Used Vehicle APR New Vehicle APR
660-689 8.9% 7%
620-659 14.4% 10.7%
590-619 19.6% 15.8%
500-589 22.3% 17.1%

Yes, these rates are high. Fortunately, there is a lot you can do to minimize the total interest you end up paying over the course of the loan.

  • Choose shorter-term financing. The shorter your loan, the less you’ll pay in interest. Steer clear of a lengthy repayment term like 60 or 72 months. The more time it takes pay off the vehicle, the more you’ll pay in interest. Secondly, offer a down payment.
  • Offer a down payment. Down payments reduce the size of your loan, and thus how much interest you pay on it. Not only will this decrease how much you have to borrow, it will help to minimize negative equity.

Will I Qualify?

In order to qualify, you must:

  • Be a resident of Ohio.
  • Have a monthly income of $1500.
  • Have been gainfully employed for no less than 1 year.
  • Not have any non-discharged bankruptcy.
  • Have no repossessions in the last year.

If you meet these requirements, you have a very good chance of securing the loan you need.

What Kind of Vehicle Can I Purchase?

This varies from lender to lender. However, we’ve listed a few 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.
  • Costs no more than 6 times your monthly income.

Many lenders want you to purchase your car or truck from a dealership with whom they’ve partnered. Typically, you cannot get a loan for a private party purchase.  That is, a vehicle being sold by an individual versus a dealership. Also, you will have to carry full coverage insurance on this vehicle, so you will have the funds to repay the loan if the vehicle is wrecked or totaled in an accident of some kind.

What About Down Payments?

Unfortunately, down payments are often a requirement when financing a car with below-average credit. They lessen the risk for the loan provider, because if the borrower defaults, they have a better chance of recovering their losses. As a buyer, you will owe less in overall interest, simply because your loan will be smaller, and you won’t be as vulnerable to negative equity, meaning you owe more on your car or truck than it’s worth.

You might have seen zero down, “sign and drive” specials advertised on TV or the radio. If your lender offers you this option, commit to driving the vehicle until you’ve paid it off, to prevent a negative equity situation. Negative equity is a bigger risk when you have bad credit, simply because the rates of interest are higher. A down payment allows you to borrow less than the vehicle is worth. As it depreciates, what you owe and what your vehicle is worth will remain more in line.

Re-establishing Your Credit Through Timely Payments

It’s true, financing a vehicle can help your credit – provided that you make your payments on a monthly basis, on time. It’s not the actual event of paying off the vehicle that gives your score a boost, it’s the months of making payments in time. As a result, you’ll want to finance a practical, budget-friendly vehicle. That way, if you run into any hard times financially (and who doesn’t), you won’t be at risk of missing a payment. Falling 30 days delinquent on a payment could have a major negative impact on your credit.

Although most experts recommend spending about 18% of your income on transportation, only about half of that (10%) should go toward your auto loan payment. By way of example, let’s take a look at the average numbers for Ohio residents.

  • Monthly Income: $2,135
  • Total Transportation Budget: $384
  • Recommended Payment: $213
  • Leftover Funds for Fuel, Maintenance, etc: $171

This is simply an example, of course, but it should show you how to determine a reasonable monthly payment.