4 Best Car Loans for Bad Credit Reviews in 2024 | Alternative Lenders for Everyone’s Budget

January 22, 2024 | Editorial Team

Even though most Canadians have a car, buying a new one is a big deal. Most people cannot afford to pay for a car out of pocket completely, so they take out a car loan instead. If you don’t have a good credit score, taking out an auto loan from traditional lenders such as a bank may be out of the question.

But, there are plenty of bad credit loan options for Canadians. We will look at four of the best bad credit loan companies in the country to help you get your dream vehicle today! Your credit score doesn’t have to hold you back.

Car Loans Bad Credit Canada Reviews


The first bad credit car loan company we’re going to look at is LoanConnect. LoanConnect is a Toronto-based company that has been around since 2016. They help Canadians in any province or territory (see Edmonton, Ottawa, Toronto, and Calgary), with a low credit score find various bad credit loans, including bad credit car loans.

LoanConnect is not a lender themselves; rather, they are a search engine for loans. They work with a variety of lenders to offer Canadians with bad credit the chance to get a car loan up to $50,000.

Finding the perfect bad credit car loan on LoanConnect shouldn’t take you more than five minutes. Hit apply now to start your search. You will need to input details about the type of poor credit loan you want first. Then, you will input your personal and financial information. This will help LoanConnect find a lender that suits your specific needs and situation. Finally, LoanConnect will offer you a list of lenders that will provide a bad credit car loan to you.

Once you look through the list of lenders and compare your options, you can choose one and apply directly with the chosen lender. Lenders that work with LoanConnect work quickly. Once you apply and get approved, you can get your poor credit car loan as quickly as 12 hours later.

If LoanConnect sounds appealing to you, you may be wondering if you’re eligible. You must be a citizen of Canada and the age of majority in your province or territory. Your debt cannot be more than 60% of your income, so you can still pay off your loan to LoanConnect. If you meet these requirements, you will likely be approved, bad credit or not!

Even if you use LoanConnect to search for lenders, you are not obligated to apply with any of them. So, since LoanConnect is free, easy to use, and no obligations are required, why not try it?

Canada Drives

Next on our list is a British Columbia-based company, Canada Drives. As they have been around since 2010, they have provided Canadians with over 1 million car loans.

Canada Drives is a cars, loan and dealer search engine rather than a lender themself. They connect Canadians with dealers rather than lenders. This helps connect those even with a low credit score to the perfect deal with cars to loan.

Their application is super simple and completely online. The first thing you need to do is pick a type of car. This will allow Canada Drives to only show you options of dealers that have that car available.

Then, you will need to fill in some personal and financial information. This helps Canada Drives show you dealers that can work within your budget.

Finally, Canada Drives will match you with a certified dealer. The dealer will then contact you directly to discuss your auto loan in more detail. They will discuss things like what kind of down payment you can make, your monthly payment rate, and your vehicle options.

Once you get approved, you can have your new car in as little as 48 hours.

Although Canada Drives does not mind if you have bad credit, their eligibility requirements are a little tougher to meet. You must be a citizen or permanent resident of Canada. You also need to be the age of majority in your province or territory with a valid driver’s license. Financially, you must have been employed for at least the last three months and earn a minimum of $1,500 to prove you can make monthly payments.

If you meet all of these eligibility requirements, you should easily get approved, bad credit or not!

Car Loans Canada

Another car loan company that works with dealer partners is Car Loans Canada. They have been helping Canadians both with bad credit and good credit scores for over a decade now. Car Loans Canada is a bit different than Canada Drives. Car Loans Canada’s dealer partners will look at your application and then match you to lenders that fit your needs.

Their application process is a little different, as well. You need to fill out some personal and financial information on their website. Then, a dealer partner will contact you to discuss your bad credit car loan further. Once they have a better idea of what you need, they will provide a list of lenders that suit you specifically.

As Car Loans Canada works with a variety of lenders, their interest rates vary as well. Some lenders may offer an interest rate as low as 3.99%. But, some lenders may offer a higher interest rate, around 29.9%. This often depends on what down payment you can make, what monthly payment you can make, and your credit score.

Car Loans Canada also has steep eligibility requirements despite helping those with bad credit get a car loan. You need to be a Canadian citizen over the age of majority. You also need to have a monthly income of at least $1,800 and have had a job for at least three months. Car Loans Canada also requires you to provide your credit score or consent to a credit check. If you have bad credit, your interest rates may be higher.

As Car Loans Canada is quite rigid in their eligibility requirements, and they don’t service Quebec or the territories, they may not be the best option for everyone.

Ferratum Loans

One of the quickest bad credit car loan companies is Ferratum Loans. They are an international company, as they offer loans in over 27 countries. And, they have been helping Canadians find the perfect car loan since 2005. They do, however, only operate in Alberta, British Columbia, New Brunswick, Newfoundland, Nova Scotia, and Ontario.

Unlike the other bad credit car loan companies we discussed, Ferratum Loans has a physical office in downtown Toronto. But, you can easily apply online as well in less than 10 minutes. You can often get approved within minutes with Ferratum Loans if you meet their eligibility requirements.

That said, their requirements are more strict than other bad credit car loan companies. Many requirements are the same as other companies; you must be Canadian, the age of majority, and be employed for more than three months. You also need a minimum monthly income of $2,000 and have a fair to good credit score. This generally means a credit score of around 600 to 900.

Unfortunately, if you have a bad credit score, you likely will not be approved for a car loan with Ferratum Loans. If you do get approved, your money could be in your account within an hour.

To apply, you first need to pick a loan amount and term. Ferratum loans offer personal loans ranging from $2,000 to $10,000 up to five years. Then, you will need to input your personal and financial information. You will also be asked to check your credit score to see if you meet Ferratum Loans’ requirements. If you do, approval will then occur within the hour, and your money will be deposited within a day.

Everyone will qualify for interest rates based on credit score, down payment, and how much you can afford in monthly payments. Make sure you find out what your payments will be before committing to a car loan with Ferratum Loans.

Car Loan Application Checklist

Although every bad credit car loan company has different eligibility requirements, they all often require the same documentation from you when applying for an auto loan. Here is a list of the things you will need when applying for a car loan with a bad credit score.

  • Employment information. This includes where you currently work and how long you have been there. You will also need to include your monthly income and whether you are full-time, part-time, or self-employed.
  • Your driver’s license. This will not only show that you can drive your new car, but it shows your identity.
  • Identifying information. Information such as your address, date of birth, etc. to prove who you are.
  • Your bank account information. Your bad credit loan will likely go straight to your bank account, and payments will need to come out of it as well.
  • A down payment. While a down payment is not a requirement from most bad credit loan companies, it will lower your monthly payments. This is especially helpful if you have a bad credit score, as it will show that you can still make monthly payments.
  • Your credit score. Most bad credit loan companies will check your credit score themselves. It is always good to know what your credit score is to see if you meet their bad credit loan eligibility requirements.
  • What type of car you want. Most bad credit loan companies will ask you what type of car you are looking to purchase. This will help determine how big your loan needs to be.
  • A budget. Although this last one is not necessary, you should first create a budget before applying fora bad credit loan. This will help you determine what interest rate and monthly payment you can afford to pay comfortably.

The Bottom Line

Unfortunately, our credit scores control our lives more than we think. If you have bad credit, applying for things like a mortgage, a new credit card, and an auto loan can be difficult. Fortunately, traditional lenders are not the only option for Canadians.

Bad credit loan companies are readily available and willing to help Canadians find the perfect loan, bad credit or not. While your interest rate may be higher with a bad credit loan company, it is often a good option short term. This is also a great way to get your credit score back up as you should be making regular payments to your bad credit loan.

When applying for a poor credit loan, the important thing to consider is whether or not you can afford to pay it off. If you can’t, your credit score will only get worse.

If you need more information about improving your credit score or managing your finances, INCOME.ca is here to help! We offer tons of advice on credit scores, the best credit cards, investing, how to make money, and much more. Head over to our homepage now to get even more valuable information from our team of financial experts.