Can you get a car loan with bad credit?
Yes. Lenders that work with subprime borrowers focus on your income, employment and ability to make payments rather than your score alone. You can often get approved with a score around 500–600, especially with steady income and a down payment.
Minimum requirements
To get pre-approved for a bad-credit car loan, you’ll typically need:
- Minimum income of around $1,800 per month
- Proof of identity
- Proof of income and employment
- An active Canadian bank account
- Sometimes a down payment or a co-signer
What rates to expect
Bad-credit car loans come with higher interest than prime loans because subprime lenders take on more risk. Compare offers carefully and focus on the total cost, not just the monthly payment. As your credit improves, you may be able to refinance to a lower rate later.
Tips to boost your approval odds
- Put more money down. A larger down payment lowers risk for the lender — even a few hundred dollars helps.
- Add a co-signer with stronger credit.
- Choose an affordable vehicle rather than the maximum you qualify for.
- Show stable income and employment.
- Get pre-approved so you shop with confidence.
The value of pre-approval
Pre-approval lets you avoid falling in love with a car you can’t finance. It tells you your budget up front and lets you shop knowing exactly what you can afford — a big advantage when credit is a concern.
Rebuild your credit with the loan
A bad-credit car loan can actually improve your score if the lender reports to the credit bureaus and you pay on time every month. After a year or two of solid payments, refinancing to a better rate is often possible.
Frequently asked questions
Can I get approved after bankruptcy? Yes — many specialist lenders approve borrowers who’ve had a bankruptcy, with proof of income.
Do I need a down payment? Not always, but one improves your approval odds and lowers your cost.
Will this raise my credit score? Yes, if payments are reported and made on time.
Bad credit? Get pre-approved. See car loan offers →
Disclaimer: LoanWave.ca is an affiliate / comparison website. We are not a lender and do not provide loans. We may earn a commission from partners. Rates and terms are set by lenders. Informational content only, not financial advice.