Bad Credit Car Loans: Des Moines

Need to finance a car in Des Moines, but your credit has a few blemishes? You aren’t alone. More than 25% of Des Moines residents now have credit scores low enough to be considered poor. Fortunately, we’re here to help. Many dealers and banks now have whole departments that support applicants with bad credit, and we can match you with them.

When you submit an application online, our lenders and dealers compete to finance your credit, which helps maximize your odds of approval. There are no fees or commitments, and 24 hour approvals are quite common.

Subprime Auto Loan Rates in Des Moines

Higher APR rates are to be expected when you have a credit score of 620 or less. Your actual interest rate will depend on several different factors, including your lender, FICO score, loan type, financing term, and other factors. Here are a range of rates based on our experience in the industry.

Credit Score Used Vehicle APR New Vehicle APR
500-589 20.5% 16%
590-619 19% 14.5%
620-659 12.5% 10%
660-689 7.2% 6.5%

As you can see, these rates are quite steep. In order to minimize the amount you end up paying in interest, you can offer a down payment and choose the shortest lending term you can.

Minimum Qualifications

  • Valid Iowa drivers license.
  • Monthly income of $1500 before taxes.
  • Employed for no less than 1 year.
  • Any bankruptcy discharged.
  • No repossessions in the past 12 months.

Vehicle Restrictions

Vehicle restrictions vary from one lender to another. However, we can offer a few guidelines based on our industry experience.

  • Vehicles can be new or pre-owned.
  • Mileage of 75,000 miles or less.
  • Vehicle 6 years old or newer.
  • Minimum loan of $7500.

Also, you might be required to buy your car or truck from a lender-approved dealer.

Down Payments: Do I Need One?

For applicants with low credit scores, down payments are commonly mandatory. Fortunately, down payments have several advantages for the consumer:

  • Improved odds of being approved.
  • Less money borrowed.
  • Less interest paid over time.
  • Less risk of being upside down on the loan

With that being said, many dealers do offer bad credit auto loans with no down payment. Unfortunately, it’s common practice for dealers to simply roll the down payment into the total amount borrowed. Sure, you might not have to put any money down, but you’ll wind up paying more over the long run.

Restoring Your Credit

If you make all of your payments on time, a car loan will improve your FICO rating. It’s not the actual event of paying off the loan that boosts your score, it’s the month after month of making payments when they’re due. Missing or delayed payments, in contrast, can really ruin your credit, meaning you want a monthly payment that’s easy to afford, not one that leaves little margin for error in your monthly expenses. Although most financial advisors encourage dedicating just 18-20% of your income to transportation, only 10% should go toward your car payment. As an example, let’s consider the average numbers for Iowa residents.

  • Monthly Income: $1,993
  • Total Vehicle Budget: $359
  • Suggested Payment: $199
  • Leftover Budget for Fuel, Maintenance, etc: $159

This is just an example, of course, but it should give you an idea of how to calculate a reasonable monthly payment.

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