Bad Credit Auto Loans: Tennessee

Anxious about the impact your credit will have on your APR rate? You aren’t alone. More than 25% of the population have bad credit. Fortunately, we’re here to help. A lot of dealers now have special financing departments that assist consumers with subprime FICO scores, and we make it easy to get approved.

Simply apply online, and our dealers and lenders compete with one another for your business, thereby maximizing your odds of being approved. There are no costs or obligations, and same day approvals are quite common.


Tennessee Interest Rates for People with Low Credit Scores

Inflated APR rates are a fact of life when your credit score is 620 or less. Your actual interest rate will depend on quite a few factors, including your loan provider, FICO score, type of loan, 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 8.38% 6.4%
620-659 13.04% 9.35%
590-619 18.08% 14.5%
500-589 21.36% 16.61%

Yes, these rates are high. This is why you should offer a down payment and opt for shorter-term (2-4 year) financing. This will minimize the amount you end up having to pay in interest.

Approval Criteria

  • Valid Tennessee drivers license.
  • Monthly income of $1500 before taxes.
  • Employed for a minimum of 1 year.
  • Any bankruptcy discharged.
  • No repossession in the past 12 months.

What Kind of Vehicle Can I Purchase?

Vehicle restrictions vary from company to company, but we can offer a few guidelines based on our industry experience.

  • New or used vehicles.
  • Mileage of 75,000 miles or less.
  • Vehicle no more than 6 years old.
  • Minimum loan amount of $7500.

More often than not, you will not have a “blank check” auto loan. Rather, you will have to buy your vehicle from a specific dealership or network of dealerships.

Down Payment Requirements

For applicants with poor FICO scores, down payments are commonly a requirement.  That’s because they lessen the risk to the loan company, because if the borrower defaults, they have a better chance of recouping their investment. As a buyer, you will pay less in overall interest, simply because your loan will be smaller, and you’ll reduce your risk of being under water on the loan as well.

That being said, there are lenders who offer no money down auto loans for people with bad credit. Keep in mind, finance managers have a practice of simply rolling the down payment into the total amount financed. In that way, you might not have to offer an advance payment, but you’ll pay for it in the long run – with interest!

The Impact on Your Credit

Paying off a car loan as agreed is a good means of rebuilding credit. It will show banks and lenders that you are a creditworthy applicant, which means lower interest rates and more favorable terms on future loans. Of course, there’s a flip side to this. If you miss payments or are late on them, you could easily make your FICO score even worse.

To help keep your payments affordable, commit 10% of your income to your monthly payment, at most. To give an example, let’s have a look at the average numbers for consumers in Tennessee.

  • Monthly Income: [income m]
  • Total Transportation Budget: $363
  • Suggested Payment: $202
  • Leftover Budget for Fuel, Maintenance, etc: $161

Of course, you have to scale this formula to your own income.