Can I Get an EV Loan with Bad Credit?


In cooperation with CreditNinja

One of the best ways to go green is to use an electric vehicle. It relies on electric batteries, making it better for the environment compared to its gas-powered counterparts.

However, the high upfront cost hinders many people from switching to EVs. Car loans will make it easier to have the money that you will need. What if you have bad credit? Can you apply for an EV loan? Read on and learn from the insights we’ll share in this post.  

Bad Credit is Not a Hindrance

Having bad credit can be a nightmare. Whether you are searching for a job or buying car insurance, your credit rating will haunt you. It can also be a problem when you are applying for an EV loan.

	Can I Get an EV Loan with Bad Credit?

Keep your eyes on the prize

Lenders will consider you a high-risk applicant.  One of the most common reasons why people have poor credit standing is their inability to settle their financial obligations. Hence, the lender might think that you won’t be able to pay your loan on time. You can be rejected outright. Or, in case you are approved, you might suffer from a higher interest rate compared to people with better credit standing.

The good news is that you can still get an EV loan! Bad credit might make things more challenging, but this does not mean that owning an electric car is impossible. You must know how and where to look to find the best deals.

How To Get Approved for EV Loan if You Have Bad Credit

Even if you have bad credit, you should not give up on your dream of having an electric car. Here are some of the things that you can do.

1.      Check the Report and Rectify Errors

The first thing to do is to check the details in your credit report. In most instances, the information provided is accurate. Nonetheless, there may be situations when the report has errors. If you believe that the numbers are inaccurate, act fast. By disputing errors in a credit report, you can appear more creditworthy in the eyes of the lender.

You can get a free copy of your credit report, so we recommend that you retrieve one and check if it is correct. If it isn’t, then you can contact the credit reporting bureau. They will do it for free. Write a letter and send it by mail or email. Depending on the specific credit bureau, you might also need to fill out a dispute form. You can also call them by phone.

2.      Work on Improving Your Credit Score

You will not see results overnight, but if you start now, it won’t take long before the changes will reflect in your credit rating. It can take up to 12 months or more. Once the credit score is higher, you can enjoy access to more financing solutions. That said, below are some of the best ways to increase your credit score:

  • Pay your bills on time. Payment history is one of the most important factors affecting your credit score. So, the timely settlement of your dues can boost your rating.
  • Ask your bank for a higher credit limit and be mindful of your credit utilization. If your income has increased through the years, it will be easy to request an increase.
  • Limit your application for new accounts. Every application can result in a hard inquiry, which can temporarily bring down your credit rating by a few points.
  • Consolidate your debts. If you have multiple debts, consolidation is a good idea so that you only have a single payment to deal with.
  • Work with a credit repair agency. The latter can guide you on the best things that you can do to boost your rating. 

	Can I Get an EV Loan with Bad Credit?

As with many things, more money up front an ease the process of an EV loan

3.      Consider a Larger Down Payment

If you have extra cash on hand, you might want to use it to increase the down payment for your electric car. A higher initial payment means that the amount that you will borrow from a lender will be smaller. Hence, the lender will carry a lower risk. This will not only increase the chances of approval but can also bring the interest rate down.

Got no money to spare for a larger down payment? Ask for help from family and friends. They can help you pool the necessary financial resources. If you are serious about getting an EV, you might even want to try selling some of your assets if it will allow you to raise more money.

If your money for the down payment is not enough, it might be wiser to delay your plans of buying an EV and use your time to save up. Otherwise, you will end up with higher interest rates, which can be a burden over the time that you will be repaying the loan.

4.      Find the Right Lender

While you have several options for lenders, they are not all the same. If you have bad credit, then you should focus on those that are known for working with people like you. This will help you save time and effort. Go online, read reviews, and learn from the real-life experiences of other people.

It is a good idea to have a list of at least three lenders to choose from. It can be tempting to go with the first lender you found, but take the time to explore other choices and decide which one is best for your needs.

Start with your current bank or credit union. If you have already built a good relationship with them, they might approve your EV loan even if you have bad credit. Online platforms are also worth exploring, especially those that specialize in working with people like you. You can also go straight to the car dealership and ask for their available financing options for bad credit.

Check out CreditNinja loans with no credit check if you are looking for a potential lender. Take note, however, that the latter offers only personal loans. The amount that you can borrow might be small, but you can use it for the down payment of the vehicle. If you have an old gas-powered car, you can even use it as collateral to apply for a secured loan that will be approved without considering your bad credit rating.

5.      Get a Guarantor

Another good way to get a car loan if you have poor credit is to work with a guarantor, which can be a family or a friend. The guarantor will co-sign the EV loan. If you default on the payment for whatever reason, the lender will run after the guarantor. It is the guarantor who will be responsible for settling your remaining financial obligation.

Nonetheless, it can be difficult to find someone who might be willing to guarantee the EV loan. Even family members can have second thoughts. Consider yourself lucky if you have someone who can vouch on your behalf. Defaulting on the debt can strain the relationship with the guarantor, so make sure to be a responsible payer.

	Can I Get an EV Loan with Bad Credit?

A used EV could be an option

Consider Buying a Used EV

Is a brand-new EV too expensive for you? Are you having a hard time raising the finances to buy a new electric car? Then there is one alternative worth exploring – go for a used car instead. It will be cheaper. Hence, you will need to loan a smaller amount, which can increase the likelihood of being approved.

Nonetheless, buying a used EV is not a straightforward process. The availability is limited, so the prices can also be high. We would suggest avoiding this route, but if your finances cannot afford a brand-new electric car, then this can be a feasible option, just make sure that the performance of the car is not compromised.

Green Auto Loans to the Rescue

If you intend to buy an EV, but do not have enough money, consider a green auto loan. It is a lending solution as eco-friendly as an electric car. These loans have lower interest rates compared to traditional auto loans. Because of this, even if you have bad credit, you can be confident that the premiums will be more reasonable. 

Aside from low-interest rates, green auto loans are also known for having longer repayment terms compared to conventional borrowing. It is more flexible. Also, you can enjoy additional incentives that will make the total cost of the vehicle more reasonable.


Getting an EV car loan if you have bad credit can be challenging, but it is not impossible. Some lenders work specifically with people who have a not-so-stellar credit rating. You can also opt to shell out a higher down payment. Lastly, you should be proactive in improving your credit score, although it can take quite some time before the improvements will be apparent in your credit report.

The bottom line is that yes, you can get an EV loan even if you have bad credit! Do not let your credit report get in the way of going green!

	Can I Get an EV Loan with Bad Credit?

Cynthia Garcia


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