If you have a terrible credit history, with bad debts, bankruptcy, repossession or foreclosure behind you, it's easy to get discouraged when applying for financing for a car. But there are places you can go to apply for legitimate loans so you can purchase the auto you need for your business or personal needs. Learn which lenders can help you get good interest rates and which ones are likely to offer you higher interest rate car loans.

And always, always if you have awful credit, don't be suckered into falling for car loan frauds, cons or scams.

Here are some sources of auto loans to try post-bankruptcy or after any bad-credit experiences. Note that legit car loans from some of these sources may be hard to get if your credit is still horrible. You should repair your credit first, if at all possible, using tried and true methods.

Bank

If you've had a bankruptcy discharge, check with the bank with which you still have an account for a possible car loan. Many people who've gone through foreclosure or filed for bankruptcy and now have poor credit are embarrassed or afraid of going to the bank and asking for a car loan, but your credit may not be as horrible as you think. Although the bank will take your "horrible credit" into account, it may offer you a vehicle loan at a higher interest rate that reflects the credit risk you represent to them. And the chance that you'll be offered the loan by the bank is greater if the amount you ask for is not too much. The bank may choose to offer a secured loan in which you put up property such as your car as collateral.

Credit Union

Credit unions generally have low interest rates on auto loans, and especially for used car loans. If you can join a credit union and are eligible to take advantage of their car loan programs, you can enjoy a lower rate on your car loan. Tip: Handle your own paperwork when getting a car loan from the bank or credit union instead of letting the car dealership do it, which would involve extra costs.

Car Dealership

While convenient, car dealerships can be expensive to get car loans from. They get the money by borrowing it from lending institutions. Occasionally they may offer auto loans to employed people without any credit history or even to people with a horrible credit history.

Small Loan and Finance Companies

If you have horrible credit, small loan companies or finance companies may be an option. However, you pay for the "anyone is eligible" policy of many finance companies by very high rates (usually the highest they can legally charge) and very strict collateral or loan security policies.

Close People You Know

It may be necessary to think of your relatives and friends as a resource when you have horrible credit but want to buy a car. Talk to your parents or someone trusted about whether or not they are willing and able to offer you a loan to purchase a vehicle. Even with someone you know personally, use a signed, dated and witnessed written contract including how much was borrowed, how long the loan stands, what the interest rate is, what the payment schedule is, and what the cost of the car is.

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