Is It Possible to Get a Car Loan with Bad Credit?

A frequently asked question we often get here at the Troubadour is whether it is possible to get a car loan, even with a poor credit history containing loan defaults or a bankruptcy.

These are commonly referred to as second chance car financing or bad credit car loans and are not typically structured in the same way as a traditional car loan product.

They are for people who currently (or in the past) have issues with their credit rating, mostly due to bankruptcy, too many loan applications, poor credit car repayment or mortgage repayment history, or even straight defaults on loans.

Because of this issues with credit, it can be extremely difficult to financing for a new car from any bank or lending institution. This is again why we recommend speaking to a specialist finance broker for this reason.

Finance companies appear to be specialists in this type of car loan and typically have some fairly detailed information about this type of car loan on their websites.

Things to consider with a bad credit car loan

  • You will be charged a higher rate of interest
  • Your repayments will be higher
  • You should go through a finance broker as banks will almost certainly reject you
  • Don’t apply to too many companies, as multiple loan applications can further hurt your credit rating
  • You must be discharged from bankruptcy before applying for a new car loan

These types of loans are generally a flexible secured loan meaning that in the case of a default, the car is the secured asset which can be taken by the lending company if any issues arise. Due to the high risk nature of these loans, the lender will usually be a lot more selective, and will do it’s due diligence before lending out funds.


Whilst it may appear very difficult to get a car loan with a poor credit history, it is not impossible. By going to a specialist company who understands this type of loan, you will find it a lot easier to get approved than it would if you went direct to your bank or credit union.

In fact, having a manageable car loan with reasonable repayments can go a long way in improving your credit rating, and make it much easier in the future to get financing for a car or new home.

Bad Credit Car Loans

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