Consumers Top 10 Best Auto Loan Rates for Excellent and Bad Credit

At some point in their lives, most people dream of owning a car. However, not everyone has the means to purchase a car by paying the entire asking price of the vehicle upfront. In this case, it’s common for people to turn to auto loans to help finance their car purchase. It is here that many aspiring car buyers get ripped off. In the excitement of finally being able to get the car they want, they fail to adequately do the market research needed to find the best auto loan rates. This small misstep can lead to a harrowing mountain of debt. Fortunately, this article can help you prevent making this costly mistake. In here, you will learn more about the various providers of auto loans, their features, their pros and cons, and the best auto loan rates that you can get from them.

 

Best Auto Loan Rates FAQ

Here are the answers to some of the most commonly asked questions about the best auto loan rates.

 

1. What Is an Auto Loan?

Unlike other forms of loans, an auto loan is a loan that you take to purchase a motor vehicle. The motor vehicle that you’re about to purchase can be a car, a truck, or even a motorcycle. This type of loan is a secured loan, which means that if the person who takes the loan is unable to pay it back, the lender can legally repossess the motor vehicle.

2. What Are the Factors That Influence the Auto Loan Rates?

Not everyone can get the best auto loan rates. Some of the factors that influence your ability to get the best auto loan rates are your credit score, your debt to income ratio, the initial down payment and size of the loan, the tenure of the loan, and the age of the motor vehicle.

 

3. Where Can You Get the Best Auto Loan Rates?

Typically, most banks offer auto loans as part of their portfolio of services. Banks are most likely to give you some of the best auto loan rates if you are a long-standing customer and share a good relationship with them. However, banks are not the only bodies authorized to issue auto loans. There are also licensed direct-to-consumer lenders such as roadloans.com, who specializes in auto loans. These lenders typically operate online and can offer some of the best auto loan rates that are highly competitive, if not lower than what banks offer.

 

4. How to Apply for the Best Auto Loan Rates?

There are multiple ways through which you can apply for the best auto loan rates. If you are dealing with lenders who solely operate online, you can simply log in to their website and fill out an application. This is the fastest way of getting yourself an auto loan. Alternatively, you could personally visit the bank or the lender, talk to one of the executives, and fill out an application manually. Although this is a slow process, it usually ensures a thorough understanding of the terms and conditions and also increases the chances of securing a sweet deal.

How We Reviewed

We conducted research on the internet and spoke with several finance experts to come up with a list of the best auto loan providers. We then scrutinized each lender on the basis of the rate of interest they offer, the features of their loan, and its pros and cons. Thereafter, we compared each lender with the others in the list to come up with a just and fair verdict on who provides the best auto loan rates.

 

Overall Range of the Best Auto Loan Rates

The range of the best auto loan rates starts as low as around 1.99% and can shoot up to around 29.99%. The interest rates are merely illustrative and can vary from person to person depending on the credit score, the type of loan, and the car you wish to buy. While getting the best auto loan rates should be an important priority, you should also consider the terms and conditions and the entire loan process before choosing an option.

What We Reviewed

• Lightstream
• Capitol One
• MyAutoLoan
• CarFinance.com
• LendingClub
• RateGenius
• US Bank
• Auto Credit Express
• RoadLoans
• CarsDirect

 

Lightstream

Features

Based out of San Diego, California, Lightstream is one of the leading online lending platforms that specialize in auto loans, personal loans, and home improvement loans. Being a division of Sun Trust bank, Lightstream offers plenty of loan options right from purchase loans and refinance loans to lease buyout and private party purchase loans. With a minimum and maximum loan amount of $5,000 and $100,000 respectively, the lender requires an excellent credit score to obtain an unsecured auto loan. Lightstream also offers a streamlined online application process with no application or processing fee.

Pros

• Hassle-free paperless application
• Wide variety of loan options
• Easy process
• Same day funding option

Cons

• Requires excellent credit score
• High rejection rates

Rates

Lightstream offers auto loan rates from around 3.34% to around 9.19% with autopay enabled.

 

Where to Apply

https://www.lightstream.com/multipurpose-auto-loans?cid=LP-AL-used_auto-apply-NW-16351&cid=LP|AL|used_auto|Apply|NW|fact=16351&subid=af7256b895ec441589f0b6b9079f26c2&fact=16351&isredirect=True

 

Capital One

Features

A bank holding company based out of Plano, Texas, Capital One offers diversified loan services that include auto loans. Unlike Lightstream and many other lenders, Capital One offers purchase loans for new and used cars through a restricted number of approved dealerships. This effectively means that the lender does not give out loans for purchasing cars from private parties and other non-partner dealers. Capital One requires the borrower to possess a minimum monthly income of around $1,500 to around $1,800 depending on the credit score.

 

Pros

• Online process with pre-approval inquiry
• Generous used-vehicle age requirement
• No application fee

Cons

• Offers only purchase loans
• Stringent vehicle qualifications

 

Rates

Capital One offers auto loan rates that start as low as 3.99% and go all the way up to around 12.57% depending on your credit score.

 

Where to Apply

https://autonav.capitalone.com/cars/lp/nerdwallet?PFFSRCID=S-GW-1234567890A-GCW-0800&external_id=COAF_V1_AFF_BAU_NW_P_IR_Z_DESC_CBP_Z_Z_Z_Z_20180601&subId1=0126975bae154d8e885361e277120cbf

 

MyAutoLoan

Features

MyAutoLoan is an online loan marketplace that helps connect car buyers to partner lending institutions online. With a fast funding and approval process for eligible buyers, MyAutoLoan also offers plenty of tools and loan options for people struggling with average credit scores. Similar to Lightstream, MyAutoLoan offers purchase loans, refinance loans, lease buyout, and private party purchase loans. The application process is quick and hassle-free, with MyAutoLoan matching you with up to 4 different lenders upon completion of the application.

Pros

• Saves a lot of time
• Great option for average credit scores
• Plenty of loan options

Cons

• Lack of customer service support number
• Not a direct-to-consumer lender

Rates

The auto loan rates offered by MyAutoLoan start as low as 1.99% and go upward to around 24.9% depending on your credit score and loan option.

 

Where to Apply

https://www.myautoloan.com/partner/nerdwallet.html?utm_distil=nerdwallet&source=nerdwallet&site=MAL&type=type_notset&term=term_notset&term=70ec67206efc4a249e0835a04e23ce7e

 

CarFinance.com

Features

Founded in 2011 and Run by Flagship Credit, CarFinance.com is the perfect solution for people with less-than-ideal credit scores. With a minimum loan amount of $7,500 and a maximum cap of around $50,000, CarFinance.com offers loan assistance for people with a credit score of around 550. The lender has strict restrictions on the purchase of used cars, with a maximum limit of 8 years and 100,000 miles. CarFinance.com even lends to people who have debt that is around half of their monthly income.

 

Pros

• Perfect for people with bad credit scores
• No down payment for purchase loans
• Preapproval within 30 minutes

Cons

• Covers only 45 states
• Not for people with good credit scores

Rates

CarFinance.com offers auto loan rates starting at around 7.99% and going up to around 21.99% depending on the eligibility criteria, the type of loan, and the credit score.

 

Where to Apply

https://apply.carfinance.com/aid/40597/tid/168746b4207544aea379ab4381d8f091

LendingClub

Features

LendingClub is a peer-to-peer network that helps car buyers connect with investors and offers an alternative way to finance their purchase instead of going through traditional financing channels. Perfect for people with low credit scores, LendingClub offers to refinance loans for amounts ranging from $5,000 to around $55,000. With flexible refinancing tenure ranging from 24 months to 84 months, LendingClub allows people to keep monthly payments more affordable. The network also accepts applications from people with a credit score of 510 and above.

Pros

• Great customer support
• Soft credit inquiry
• No application, origination, or prepayment fees

Cons

• Refinanced vehicle must be a personal-use car
• No purchase loan options

Rates

The auto loan rates at LendingClub range from 3.49% to up to 24.99% depending on the credit score and the loan terms.

 

Where to Apply

https://www.lendingclub.com/loans/auto-refinancing-landing?partnerID=97878&utm_source=auto_partners&utm_medium=nerdwallet¶m2=468dda64043a4e059970f59766ee24ea

 

RateGenius

Features

Based out of Austin, Texas, RateGenius caters specifically to people looking for auto loan refinancing. RateGenius is an online brokering platform that partners with several lending institutions to find and get you the best deal on auto loans. The loan terms offered by RateGenius are flexible, with options to refinance your existing loan for the same tenure for a much lower interest rate.

 

Pros

• Same day approvals
• No application fees
• Smooth and straightforward process

Cons

• Only refinancing
• Not a direct-to-consumer lender

Rates

The rate of interest depends on your credit score and the lender that RateGenius matches you with. However, the rates typically start as low as around 2.99%.

Where to Apply

https://www.rategenius.com/sponsor/647/

 

US Bank

Features

Established in 1929, the US Bank is one of the largest banking and financial institutions in the United States. The institution offers purchase loans, refinancing loans, and private party purchase loans as well. With the minimum loan amount pegged at $10,000, the US Bank arguably has the highest minimum amount qualification among auto loan providers. However, the US Bank does not have any restrictions as to the make and model of cars, except for a 100,000 mile and 6-year limit on used cars.

 

Pros

• Soft credit inquiry
• Flexible application options
• Interest rate discount for existing customers

Cons

• Not ideal for people with low credit scores
• Origination fee and early closure fee

Rates

While the actual rates are dependent on your credit score and the terms of the loan, US Bank’s auto loan rates start as low as around 3.12%.

 

Where to Apply

https://www.usbank.com/loans-credit-lines/auto-loans.html

 

Auto Credit Express

Features

Auto Credit Express is an online loan marketplace that’s similar to My Auto Loan and focuses on helping customers with low and zero credit to obtain auto loans. They offer purchase loans and lease buyouts and do not support refinancing loans or private party purchase loans. Auto Credit Express also requires a minimum monthly income of around $1,500.

 

Pros

• Streamlined application process
• Perfect for people with low credit scores
• Competitive interest rates

Cons

• Not suitable for people with good credit
• No direct-to-consumer lending

Rates

The auto loan rates as shown by Auto Credit Express start as low as 3.99% and go upward to around 29.99%, depending on your credit score and loan option.

Where to Apply

https://www.autocreditexpress.com/apply/?lpgid=gk0216&affid=ap002204&subid=2873403f-70a7-415f-befa-a4d81b868752&keyid=

 

RoadLoans

Features

Based out of Dallas, RoadLoans is a direct-to-consumer lender offering auto loans for purchase and refinancing of vehicles. RoadLoans specializes in offering loans for people with bad credit scores and zero credit history. However, RoadLoans limits the purchase of old cars to those that are up to nine years old and have run fewer than 120,000 miles. They also have a minimum monthly income qualification of $1,800.

 

Pros

• Autopay option
• No prepayment or origination fees
• Online application and quick approval

Cons

• Not very transparent in interest rates
• High-interest rates for used cars

Rates

The interest rates that RoadLoans charges start as low as 1.99% for new cars and 7.5% for a used car. The maximum loan rates depend on your credit score and loan option.

 

Where to Apply

https://roadloans.com/

 

CarsDirect

Features

Owned by Internet Brands, CarsDirect is a financing institution that offers purchase and refinance loans for motor vehicles. CarsDirect is an auto loan marketplace that links buyers with dealerships and lenders. In the case of purchase loans, the institution mandates a minimum down payment of around 10% of the value of the vehicle. However, it does not specify any limits or restrictions on the purchase of old and used cars.

 

Pros

• Preapproval soft credit inquiry
• No restrictions on make and model of cars
• Ideal for both good and bad credit scores

Cons

• No private party purchase loans
• Loan offers from participating dealerships only

Rates

The rate of interest depends on your credit score and the lender that CarsDirect matches you with.

Where to Apply

https://www.carsdirect.com/auto-finance?src=20&lnk=A4HIWnz19mA-mH8%2FhUORSJ6Ul5TP7iWXAg

 

The Verdict

Based on our review of the best auto loan rates, Lightstream seems to be the best overall lender with competitive auto loan rates. With a great portfolio of auto loan options for both new and used cars, a smooth and streamlined application process, and flexible terms, Lightstream is a great option for people with excellent credit scores. However, they seem to reject people with no credit history and average credit scores. If you fall under that category, CarFinance.com and Auto Credit Express are two great alternatives that cater to providing the best auto loan rates for people struggling with credit scores.