Commercial trucks, like semis, straddle the boundary between vehicle, living space, and business. Semis share the road with vehicles intended for personal use, but for many, commercial trucks are a business on wheels. Many Americans make their living by running independent shipping companies or by using the semi they own to work for large shipping conglomerates.
In the course of this line of business, drivers are often required to sleep in their truck in order to make shipping deadlines or save money when on the road for long periods of time. For all of these reasons, it becomes very important to know the truck you plan to purchase is going to be up to the task of being your vehicle, home, and business all at once.
It only stands to reason that a new semi-truck would be an expensive investment. After-all, these vehicles must be reliable on the road and comfortable as a home-away-from-home. Getting financing to purchase a truck is easy if you have good credit, but what if you are one of the many Americans whose credit is low or even bad?
If you have below-average credit, your vehicle lender may reject your request for a commercial truck loan. Do not lose hope, though; there are ways you can secure financing even if you have a poor credit score and would like to purchase a new or used semi-truck. For example, individuals with low credit scores can improve their chances of obtaining auto financing by paying a down payment. Trading in an older vehicle may also be an option to lower the amount that needs to be financed and improve your loan chances.
However, finding out what all your options are is a long and arduous process. Auto loan network platforms can help take some of the guesswork out of finding a loan, especially when you have poor credit. These platforms can connect you with creditors that provide auto loans to people with your particular credit score, monthly income, payment history, and so forth. Their partnerships with lenders provides users access to lower prices at more affordable rates.
Using online sites that offer connections to truck lenders will also make the application process for an auto loan easier. You can apply for an auto loan online and complete all the paperwork without ever stepping outside of your home or office. As long as you present your documents and accurate personal information, you can get approved for a loan.
In this article, we compiled our top three list for the best semi-truck auto loan platforms for those with bad credit. Each of our recommendations comes with an in-depth review of the platform. We also put together a list of frequently asked questions with our answers so that you can make an informed decision when searching for a semi financing.
2021’s Best Options For Semi-Truck Auto Loans With Bad Credit
- Auto Credit Express: Editor’s Pick for Bad Credit Semi-Truck Financing
- myAutoloan.com: Best Interest Rates for Semi-Truck Auto Loans
- car.Loan.com: Fast Approval for Semi-Truck Loans
Loan Networks for Semi-Trucks
Loan networks like the ones below are a great option to look for financing for semi-trucks. These semi-truck loan networks do not require an excellent credit score for you to pre-qualify for a loan. The network will connect you with lenders who can give you financing offers and terms.
The benefits of using an online loan network are convenience and eligibility. These loan networks are designed especially for people with bad credit who would like to purchase a vehicle and simultaneously rebuild their credit. They have connections to dealerships and lenders, which can give you multiple options for your semi-truck financing.
#1. Auto Credit Express: Editor’s Pick for Bad Credit Semi-Truck Financing
Auto Credit Express is a well-known loan network for people who have poor credit. This platform first launched in 1999 and has been actively helping people get access to better financing, regardless of their credit score, ever since.
The network’s goal is to help Americans rebuild their credit by providing options to loans that are flexible and attainable. So, whether you have good or bad credit, you can get access to auto loans that can rebuild your credit.
Auto Credit Express has an A+ rating on Better Business Bureau, providing exemplary assistance and service to its users. They are also an accredited business which means they are assessed and evaluated using industry standards.
Auto Credit Express also accepts people who have recently filed for bankruptcy and need a new vehicle. The approval rate and the number of lenders who are willing to work with you will depend on where you currently stand with your bankruptcy case.
The network also has a wide connection of dealers that offer leasing and purchasing programs. These programs are designed for people who would like to purchase a vehicle without requiring a credit check. Your dealer may also offer financing options such as an auto loan where you can pay off your loan over time.
Auto Credit Express is the largest network for an auto loan and financing for both borrowers and lenders. They processed over a million requests this year, and the numbers are only growing. People trust and choose this network because of its convenience and service.
#2. myAutoloan.com: Best Interest Rates for Semi-Truck Auto Loans
If you are looking for or considering refinancing options for your vehicle, you can take a look at myAutoloan.com. Refinancing is a type of service where you can reduce and change your current auto loan terms to better fit your monthly salary.
This option is great if you find it challenging to follow through with your monthly payments. myAutoloan.com may be able to offer refinancing options that do not require any payment from the borrower within 90 days, giving you breathing room to reorganize your expenses.
They also have multiple tools that you can use to check for your financing needs, including an interest rate chart and calculator. The interest rate chart can give you a viewpoint on the lowest interest rates you can get depending on the loan type that you prefer.
You can also use their interest rate estimator without damaging your credit score. Depending on your current credit score, the interest rate estimator will give you your estimated interest on your auto loan. And lastly, they also offer a payment calculator for borrowers.
A payment calculator is a helpful tool that can help you calculate your interest rate and the maximum amount of loan that you can borrow. The network not only helps you connect with multiple lenders and dealerships but also helps borrowers follow responsible lending.
The network does not charge for their services, and you have multiple options for purchasing your vehicle. You can request a loan for a private party and lease buyout, which can help you get ownership of the vehicle that you are currently leasing so you can get the title of the car immediately.
#3. car.Loan.com: Fast Approval for Semi-Truck Loans
Car Loan is another lending network that accepts all kinds of credit for semi-truck financing, no matter if you have a poor or excellent credit score. They also have multiple options for borrowers to choose from if they are planning to take out an auto loan.
This platform is an excellent option if you are looking into different options for your vehicle, such as renting, leasing, or buying. The network has a huge connection to lenders who specialize in different loan terms, including lease-to-own options.
You can easily get a response to your loan request within minutes after finishing their secured form. They also have options for both new and used cars and use a system that matches you with dealers that can offer you financing terms that suit your preferences.
There are no fees to using their services, and you can pre-qualify without damaging your credit. The network will connect you with a dealer or lending partner, depending on the type of financing you want. If you want to lease a vehicle, they might connect you to dealers that offer a lease-to-purchase financing option.
On the other hand, if you want to purchase and are looking for a loan option for your down payment, you can look into auto loans. The network also has lenders that offer auto loan financing for semi-trucks without a good credit score.
This loan network is great for people who would like to get back on the road as soon as possible. After matching and accepting a dealership or lender offer, you can go to your preferred dealership and purchase your new vehicle immediately.
FAQs on Commercial Truck Financing
Q1. What If My Credit Score is Only 500?
Truck drivers are currently in demand. With many trucking companies looking for truck drivers to deliver supplies and other needs, investing in a truck could be a good choice. Research says that this demand will only continue to grow over time.
It is also because of this demand that many truck companies offer financing and flexible terms when it comes to purchasing a truck. You can always ask or inquire with a truck company if they provide any assistance.
Other dealerships also provide loans that can stretch for a few years. Even though your loan lasts longer, you can have a lower required payment every month this way. The only drawback to this is that you will be paying more interest compared to a shorter duration.
Choose the duration of the loan that you can afford to pay each month. The key take here is to find the best value in between. Do not look at the APR alone; consider what is best according to your financial situation. After all, not paying your loan can damage your credit.
The typically required credit score for purchasing a truck is 700, which is considered good credit. If you have fair or below-average credit, it can be difficult to acquire financing assistance for your vehicle. However, this does not mean it is not possible.
A lease-to-own deal is where you can secure financing for the vehicle of your choice. You can then use this vehicle however you want but are not the legal owner of the vehicle. You will only become the legal owner once you pay off all the remaining loans you have from that dealership.
Getting approved for an auto loan like this could be easier if you have poor credit. However, make sure to pay all your monthly payments on time because the lender can repossess your vehicle if you do not pay your bills.
Aside from repossessing your vehicle, you would not get any reimbursement from all your previous payments for that loan. This situation depends on your contract with the dealer, however. Discuss the details of your loan deal with your lender, including in the case of a default. However, this option is your best shot if your credit score is 500 or less.
Online lending platforms may be able to connect you with lenders who can approve you of an auto loan despite having poor credit. These platforms also have a connection to dealers that can give you the best offers when it comes to purchasing a new pick-up truck.
Another way you can get approved for financing for your semi-truck is by having a co-signer. A co-signer is someone who promises to pay off your debt to your lender in case you are not able to pay. Having a co-signer makes dealers or lenders more likely to approve your loan.
However, finding a co-signer who is willing to vouch for you can be challenging. Being a co-signer is risky, after all. If so, the last option you have for improving your chances of getting approved is securing a down payment for your auto loan.
A down payment is money that you pay to your lender upfront before purchasing the vehicle. Securing a down payment has many benefits, including increasing your chances of your auto loan being approved.
Aside from this, a down payment can be used to lower your overall monthly payments. This is because the higher you pay as a down payment, the less money you need to loan overall. If you have extra cash lying around, it could be a good idea to talk to your dealer about this.
Trading in an old vehicle for a new one at your dealership can also be a great way to acquire an auto loan and reduce your monthly payments. If you trade in a vehicle, the value of your vehicle will be subtracted from the value of the new vehicle you are planning to purchase.
However, suppose you have an “upside-down” equity, meaning your vehicle still has an outstanding loan on it. In that case, you will need to pay additional funds to cover the remaining balance before you can trade-in your vehicle. If you have “upside-down” equity, we do not recommend rolling over your new balance into a new loan, as this can increase your interest rates and total monthly payments.
Q2. Is It Possible to Get Financing for My Semi-Truck if I Have Poor Credit?
Before we can discuss possible financing methods for people with bad credit, we need to know what bad credit is. There are different types of categories for each credit score, and it depends on the dealer whether they approve this credit score or not.
You have an exceptional or excellent credit score if your FICO score is 800 or 850. This is considered near perfect, and you are more likely to get approved for loans that require no down payment for your purchase.
Most dealerships for commercial trucks or other vehicle purchases require you to have at least a good credit score. What this means is that your FICO score should fall anywhere between 670 to 739.
Having a FICO score of 300 to 579 means that you have a poor credit score. However, falling into this category does not mean you cannot get financing for your semi-truck or other vehicles. It only means that you will have fewer options compared to people who have good credit.
Your best possible option for getting financing for your semi-truck is getting a lease-to-own vehicle. This type of loan means that you are leasing the vehicle that you purchased until you pay back all the loans you have in full.
You need to make sure you pay all your monthly loan requirements on time, or the dealership will get a hold of your vehicle. They can take back the vehicle from you if you do not make the effort to stay on time with your monthly payments.
After you pay all the payments required from the loan, you will get the title to the vehicle. This title means that you are now the official owner of the truck. This option is also great if you would like to improve your poor credit.
If you can stay on time with your monthly payments, your FICO score or credit score will steadily go up. The lenders or dealerships are required to take note of your monthly payments and relay them to the major credit bureaus, increasing your credit score.
Falling into the category of poor credit score can be disadvantageous, but it does not mean you are out of options. You can get approved for the lease-to-own auto loans without having your credit history checked.
The lender or dealership will check your monthly salary or income to see if you can afford to pay back the auto loan. If you can, you are more likely to get approved for the auto loan. Otherwise, you can improve your chances by putting down a down payment or having a co-signer.
Making small purchases on your credit and paying it on time can also boost your credit score in a short time. If you only need a few more points before falling into the fair credit score category, you can do this method. The fair credit score category has a FICO score of 580 to 669.
However, due to the demand for truck drivers, many borrowers like to use the option called lease-purchase operator. A lease-purchase operator means that you are leasing your commercial truck and using it for business until you can pay back what you owe.
The average cost of a truck without financing comes to about $40,000, and not everyone can afford that. Many people do not have enough down payment for a price that large either. This type of program can also help you get past the constraints of owning the truck.
Going for a leasing program also has other advantages, including added benefits and add-ons from your leasing company. You can have scheduled maintenance for your truck that can help keep your vehicle pristine and new.
You can also get extra training as a driver if you have not already. Aside from this, using a lease-to-purchase program means you get access to managing benefits like tracking your working hours. Other leasing companies will also offer to get your IFTA taxes and information done for you.
Joining a leasing program does not mean that you cannot choose the model of the truck that you want. Most lease-to-purchase loans give you access to new vehicles at a lower cost and price. If you would like to save more money, you can also look at used vehicles, which have a lower price tag than new vehicles.
Getting a lease-to-purchase truck also means that your leasing company can do all the necessary work permits for you. However, some leasing companies require you to do that paperwork on your own. Talk to your leasing company about necessary permits before accepting the lease.
We recommend finding carriers with a freight board. This feature can make your truck operation easier because you can book your freight from your home or wherever you are. Talking to other drivers can help you decide if participating in a lease-to-purchase for your truck is worth it.
You can also take a look at online lending communities, where they can link you to lenders that are willing to offer loans. This option is great for people who are not going to purchase commercial trucks but instead semi-trucks.
A smaller truck means you may need a lower down payment. Smaller auto loans can be approved faster and much easier compared to other loans. Online lending networks can also help you pre-qualify without damaging your credit score.
Other banks and lenders may pull out your credit score report, which can damage it. This type of pulling out your credit is called a hard check. Lenders and creditors do this when you are pre-qualifying or taking out a new loan. So be sure to ask your lenders if they are going to be doing a hard check on your credit first.
Q3. Do I Need a Down Payment for My Truck?
Making a down payment on your truck is one option to increase your chances of getting approved. You can also lower your monthly payments by providing a down payment for your truck when purchasing it.
The type of truck you are purchasing will also affect the down payment you need before taking out a loan. Commercial trucks or bigger vehicles typically require a bigger down payment upfront compared to smaller pick-up trucks.
The rule of thumb when it comes to the down payment of commercial trucks is that you need to put down at least 5% of its price. So, if you are going for a new vehicle, the total price for an average truck would be between $80,000 to $150,000, depending on your vehicle.
If we calculate it based on this estimated price, your required down payment would be around $4000 to $7500. These numbers can go down if you are willing to purchase a used truck instead of a new one. However, repair and maintenance costs can offset its overall value.
However, this does not mean that you need a down payment to purchase your truck. There are two options you can take a look into when buying a truck. The lease-to-purchase option is when you lease your truck while paying off the remaining loan.
If you choose to lease-to-purchase your vehicle, most leasing companies will not ask for a down payment. It depends entirely on your leasing company if they allow you to not make any down payment or require a smaller amount of down payment for your vehicle.
In most cases, however, leasing companies that offer lease-to-purchase loans will not require a down payment because you do not get full ownership of the vehicle. This type of loan is called a secured loan. It means that your truck is considered the collateral of the loan.
Collateral is an item, or in this case, a vehicle, that the leasing company can take back in case you do not follow through with your monthly payments. So, even though it has a downside, the benefit to this type of loan is that some leasing companies will not check your credit if you go through with this leasing plan.
If you have a lower credit score, this can be beneficial for you. The requirements you need to get approved for lease-to-purchase vehicles are less as well. Your leasing company will have its own set of requirements and eligibility for approval, so be sure to check that beforehand.
An online lending platform that offers an auto loan will typically not require a credit check for your loan request. These loan platforms also have tools that you can use to determine and estimate the loan you can request based on your monthly salary.
Other platforms such as Auto Credit Express offer a fast and convenient pre-qualifying process. These platforms are a great option if you would like to receive an answer for your loan request within minutes. Other creditors can take a long time before getting back to you about your loan request.
You can also track the progress of your loan on this kind of platform. If you prefer this kind of feature, online lending platforms may work well for you. These platforms specialize in helping people with poor credit scores get financing for their vehicles.
Working directly with a lender like this will give you more freedom in choosing your semi-truck. After all, you can request a loan and head to the dealership of your choice to acquire the new vehicle. On the other hand, dealing with a dealership may place constraints on the type of vehicle you can purchase.
If you are looking to finance semi-trucks, working with a lender directly can help you. Most platforms will have multiple lenders who will connect and work with you even if you have a poor credit history. Even though these lenders will perform a basic credit check, they will not harm your credit report as well.
The interest rate for each option will vary. However, it is up to you to choose which type of auto loan is most suitable for your lifestyle. Investing in a trucking business as an independent contractor using lease-to-purchase or auto loan is an excellent choice for people who are only starting as truck drivers.
The demand for truck drivers is continuously growing. With this, more and more dealerships and leasing companies are willing to give you loans for a semi-truck without a down payment. You may also receive more affordable rates and financing as long as you talk and negotiate with your leasing company about it.
Leasing companies may also offer other benefits such as managing your taxes and providing loads. Some dealerships will also offer maintenance for your car to prevent any accidents and future repairs. Talk to your leasing company or dealer about benefits like these so you can choose the best option for you.
Getting the Best Value for a Truck
The best value for a truck depends entirely on your preferences and financial situation. However, there is a common rule that most people follow when it comes to purchasing trucks and other vehicles in general.
This rule is called the 20, 4, and 10 rule. Meaning, you have to put down at least 20% of the total truck’s price as a down payment. If you are planning to purchase a new commercial truck, this can be a hefty price that you need to pay upfront.
Next is that you have to have a maximum of four years when it comes to your loan duration. Other dealerships offer more than four years for their loan duration. A longer auto loan term may mean that you will have lower monthly payments, but this can increase the total interest that you have to pay for your truck.
On the other hand, getting a shorter loan term means that your monthly payments may be higher. However, you can get the ownership and title to the vehicle fast, and if you can afford to follow through with the payment every month, this is a better option.
Lastly, make it so the payment you have to pay for your auto loan each month is only 10% of your monthly salary. Keeping the loan you request is proportional to your monthly salary is one of the ways you can keep up with the payments without missing any due dates.
Not all people can abide by this rule. Everyone’s financial situation is different, and this rule is only applicable for people who have enough income and savings. For people who are planning to invest in a truck and become full-time truck drivers, you can bend this rule slightly.
You can think of your truck as a business investment. After all, you are getting back a portion of your income when using the truck. Unlike most vehicles bought for personal use, semi-trucks can generate income that you can use to pay off your loan.
If this is your case, you can increase the 10% to 25%. Increasing the auto loan you have to pay every month may seem risky, but you can reduce the duration of your loan and get the ownership of your truck faster than a longer duration.
We do not recommend going to a percentage higher than this, but every person’s situation is different. Ultimately, the decision falls into your hands. Paying higher than 25% of your income may prevent you from saving money and using your income on other assets such as housing and other medical financings.
We recommend making a budget or using a tool to estimate your total monthly expenses before applying for an auto loan. Add the estimated monthly payment for your vehicle on top of those expenses to see if your expenses go over your monthly income.
Conclusion: Which is the Best Option for Semi-Truck Auto Loan?
People who have poor credit may still be able to get the semi-truck they need. There are multiple financing methods that they can use to purchase a new semi-truck. Auto loans and lease-to-purchase options like Auto Credit Express, myAutoloan.comn, and car.Loan.com can finance a semi-truck without requiring a good credit score.
Check out our recommendations above and consider some of our advice as you search for a semi-truck auto loan.