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When it comes to car shopping, finding the right loan can be just as important as finding the right car.
It’s not as easy as simply showing up to the dealership. To get the lowest interest rate, you’ll want to shop around for an auto loan to see what kind of financing is available to you. Dealerships often mark up the interest rates on loan offers from lenders, and that can leave you paying more for the same car.
As you start shopping, keep in mind that your local small bank or credit union could also be a great place to get a loan — these institutions often offer lower car loan interest rates than big banks, but are usually limited to a relatively small geographic area.
Here are a few places to help you start your search for a variety of situations.
New: Starts at 5.89%, Used: Starts at 6.09%, Lease Buyout: Starts at 6.69%, Refinance: Starts at 6.89%
On Bank of America’s website
Bank of America Auto Loan
On Bank of America’s website
Details
Regular Annual Percentage Rate (APR)
New: Starts at 5.89%, Used: Starts at 6.09%, Lease Buyout: Starts at 6.69%, Refinance: Starts at 6.89%
Pros & Cons
Highly competitive APR
High maximum loan amount
No origination fees or prepayment penalties
Available to borrowers in all 50 states
High minimum loan amount
Rate discounts require you to be a Bank of America member
Highlights
Repayment terms between 12 months and 75 months
Customer service available by phone
$7,500 loan minimum, up to $150,000 loan limit
Loans are made by Bank of America, member FDIC
To receive rate discount, you must have a three-month average balance in Bank of America accounts or Merrill Lynch investment accounts greater than or equal to the following balances: Gold members (minimum $20,000 balance) : 0.25% off listed APR, Platinum members (minimum $50,000 balance): .035% off listed APR, Platinum honors members (minimum $100,000 balance): 0.50% off listed APR
Additional Reading
Read our review
Bank of America has excellent rates for auto loans currently. Rates for a new car purchase start as low as 5.89% APR, and a used car could be as low as 6.09% APR. Bank of America offers rate discounts for current customers, up to 0.5%.
If you’re interested in buying the car you’re currently leasing but need a loan to do so, Bank of America offers a loan for that. Bank of America offers a variety of auto loans, and like the others, its interest rates are competitive in 2023. Lease buyouts can have higher interest rates than a new or used car loan, but Bank of America’s lease buyout APRs start lower than the rates other lenders offer.
New/Used: starts at 8.49%, Lease Buyout/Refinance: starts at 8.74% (Rates as of 06/01/2023. Rates vary by loan purpose.)
Lightstream Auto Loan
Details
Regular Annual Percentage Rate (APR)
New/Used: starts at 8.49%, Lease Buyout/Refinance: starts at 8.74% (Rates as of 06/01/2023. Rates vary by loan purpose.)
Pros & Cons
Great APR range
No fees
Same-day funding available
Several types of auto loans to choose from
High minimum credit score needed
Need a hard credit check
Highlights
Loan amounts range from $5,000 to $100,000
Loan term lengths range from 24 months to 84 months
Rate discount of .50% when you sign up for AutoPay
No restrictions on age or mileage of your car
Loans made by Truist Bank, member FDIC
If you have a good or excellent credit score, you might want to consider LightStream in addition to Bank of America. A part of SunTrust Bank, Lightstream focuses on auto loans to customers with good or better credit.
Because it focuses on a narrow subset of customers, its rates don’t go too high. LightStream auto loan APRs for new cars start at 8.49%, and refinancing rates start at 8.74%. However, borrowers with lower credit scores may find better rates elsewhere.
Capital One Auto Loan
4/5
Capital One Auto Loan
4/5
Regular Annual Percentage Rate (APR)
Undisclosed
Capital One Auto Loan
Details
Regular Annual Percentage Rate (APR)
Undisclosed
Pros & Cons
Low minimum loan amount
Competitive APR
Application to prequalify takes several minutes
Need to make your loan through a licensed dealer
Full information on fees and interest rate range not disclosed until you apply
Not available to borrowers in Alaska or Hawaii
Highlights
Repayment terms between 24 and 84 months
Customer service available by phone and mail
Minimum loan amount of $4,000, maximum undisclosed
Available to residents of the 48 contiguous states
Loans are made by Capital One Bank, member FDIC
Additional Reading
Read our review
Capital One offers easy and reputable auto loans for borrowers with credit scores of 500 or higher. Capital One offers loans as small as $7,500 for used vehicles.
New or used as low as 7.66%, Refinancing as low as 8.09%
U.S. Bank Auto Loan
Details
Regular Annual Percentage Rate (APR)
New or used as low as 7.66%, Refinancing as low as 8.09%
Pros & Cons
Competitive rates, particularly on used cars and refinancing
Variety of term lengths available
US Bank relationship rate discount
Can’t buyout your lease
High minimum loan amount
Fee for paying off your loan early
Highlights
Term lengths range from 12 to 72 months
Minimum income and credit score requirements undisclosed
Discount of 0.50% for automatic payments from a US Bank checking or savings account
Minimum loan amount of $5,000, maximum of $100,000
Prepayment penalty of 1% of the original loan amount, with a $50 minimum and $100 maximum if account is closed within 12 months
Loans are made by US Bank National Association, Member FDIC
US Bank’s top rates are comparable to other competitors’ rates, particularly on used cars and auto loan refinancing.
The bank will allow you to get your financing preapproved without having your car picked out. Once you decide on a car, you can finalize your loan terms. The lender doesn’t specify a minimum credit score to get a loan or a timeframe for when you’ll receive your money.
Navy Federal Auto Loans
4.5/5
Navy Federal Auto Loans
4.5/5
Regular Annual Percentage Rate (APR)
New and Refinancing as low as 4.54%, Used as low as 4.54%
On Navy Federal Credit Union’s website
Navy Federal Auto Loans
On Navy Federal Credit Union’s website
Details
Regular Annual Percentage Rate (APR)
New and Refinancing as low as 4.54%, Used as low as 4.54%
Pros & Cons
Top-notch interest rates
No prepayment penalties or origination fees
Many term lengths available
Wide range of loan amounts
Around the clock customer service
Mobile app
Membership required to qualify for a loan
Late fee
Online funding not available
Highlights
Repayment terms between 12 months 72 months (used cars) or 96 months (new cars)
Customer service available 24/7 by phone
Borrow as little as $250 or as much as $500,000 on new and used cars. Minimum to refinance is $5,000, maximum not listed
Late fee of $29
Must be a member of the military community or a family member to qualify
You’ll get your financing check through the mail or by visiting a branch
Loans are made by Navy Federal Credit Union
One of the biggest attractions of a Navy Federal auto loan is the credit union’s low interest rates. Navy Federal also features an online Car Buying Center, where the company walks you through the process of financing, buying, researching, and insuring your next car.
From dealer: starts at 5.74%, From private party: starts at 7.89%, Lease buyout: starts at 5.74%, Refinancing: starts at 5.89%
PNC Auto Loans
Details
Regular Annual Percentage Rate (APR)
From dealer: starts at 5.74%, From private party: starts at 7.89%, Lease buyout: starts at 5.74%, Refinancing: starts at 5.89%
Pros & Cons
Low minimum APR for new cars
Accessible physical branch locations
Automated payment discount
High minimum loan amount
Can’t use funds for a car more than eight years old
Highlights
Term lengths range from 12 to 72 months
Minimum income and credit score requirements undisclosed
Discount of 0.25% for automatic payments
Customer support is available over the phone or through the company’s online portal
Funds can be used for cars model 2014 and newer
Minimum loan amount of $5,000 when buying from private party, lease buyout, or loan refinancing. Minimum of $7,500 when buying from dealer
Loans are made by PNC Financial Services Group, Inc.
PNC offers great rates for borrowers who have good credit. The bank offers financing for cars model year 2014 or newer — if you want to buy an older car, you won’t be able to get a loan through PNC.
Borrowers with a poorer credit history may find it hard to qualify at all or might be saddled with high interest rates.
Which Lender Is the Most Trustworthy?
We’ve reviewed each institution’s Better Business Bureau score to help you make the best decision possible when choosing an auto loan. The BBB measures businesses based on factors like truthfulness in advertising, honesty about business practices, and responsiveness to consumer complaints. Here is each company’s score:
All of our top picks are rated A or higher by the BBB. Keep in mind that a high BBB score does not guarantee a good relationship with a lender, and that you should keep doing research and talking to others who have used the company to get the most helpful information you can.
Insider’s Featured Auto Loans
Auto Loan
Upstart Auto Refinance
How We Determined the Best Car Loans
These lenders were chosen based on interest rate (APR) for various credit scores, whether you’re buying new or used, and loans for a specific need like refinancing or lease buyouts. This list only considers loans that were available in most of the US, and does not include captive lenders — lenders owned by auto companies. We weighed factors including:
Interest rate. We prioritized lenders with good range of interest rates for both borrowers with poor and excellent credit scores.
Fees. Lenders might charge a variety of fees, from origination fees to late payment penalties. We prioritize lenders that charge minimal or no fees.
Term lengths and loan amounts. We looked for companies with a variety of repayment term lengths, offering options for borrowers who want to pay off their loans quickly and save on interest, as well as those who want to spread their costs over more years. We also picked companies that allowed you to finance loan amounts among a spectrum of need.
Borrower accessibility. We chose lenders that are available in all states and have minimal or nonexistent credit requirements
Variety of loans. We tried to pick lenders that offer loans for new and used cars, refinancing, and lease buyouts.
To find the best auto loan for your personal situation, look at several key factors. Many borrowers prioritize the lowest interest rate, but also consider any fees, the minimum credit score needed, and the accessibility of the lender’s customer service.
You also need to take into account what type of cars the dealer will finance, how much money they will finance, and the loan term length.
Guides like this one will help you compare multiple lenders in the same place to weigh their pros and cons. Make sure to also read individual reviews of any lenders you’re considering.
Best Auto Loans Frequently Asked Questions
Car dealerships are allowed to mark up interest rates on auto loans that they offer, and generally, they do. The interest rate a salesperson offers often includes a cut for the dealership, resulting in a higher interest rate for you. While you might qualify for an interest rate of 6% from a bank, you might see 6.5% or even 7% from a dealership, for example.
If you’re willing to put some work in, you may be able to save by shopping around on your own. The best way to avoid this issue is to get pre-approved by a few banks or lenders as you start car shopping, and take those pre-approvals to the dealership with you. Then, you’ll have a few estimates on what your cost to borrow could be, and can comparison shop for the lowest APR.
The longer the loan term, the lower the monthly payment. But, paying for longer than 60 months (five years) on your auto loan could leave you owing more than your car is worth.
Cars depreciate quickly, and if you’re paying for more than five years on an auto loan, your loan could end up in this situation, also called being “upside-down.” As auto loans increase in length, auto loan delinquencies tend to increase, too.
If you’re shopping for a car loan with bad credit, you could benefit a lot by doing your research and shopping around when looking for an auto loan. Avoid any “buy here, pay here” financing, as these loans often come with exorbitant interest rates and high monthly payments, which could cause you to default on your payments.
A local credit union might be a good place to start if you have a bad credit score — sometimes lenders like these can be more forgiving and offer lower interest rates than big banks.
Ryan Wangman is a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF). In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services here >>
Elias Shaya is a junior compliance associate on the Personal Finance Insider team based in New York City. Personal Finance Insider is Insider’s personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and advice about money that readers already know and love. The compliance team’s mission is to provide readers with stories that are fact-checked and current, so they can make informed financial decisions. The team also works to minimize risk for partners by making sure language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up to date and accurate. He joined Insider in February 2022 as a fellow on the compliance team. Elias has a Bachelor of Science in International Business from the CUNY College of Staten Island. Prior to joining Insider, he volunteered at the New York Presbyterian Hospital, where he worked with the biomedical engineering department. In his spare time, Elias enjoys exploring new restaurants, traveling to visit his family in Lebanon, and spending time with friends.
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