4.50%
12-84 months
Up to $100,000
Credit union car loans tend to offer the lowest rates, and Southeast Financial Credit Union (SFCU) is no exception. Its rates are especially low on short-term car loans. If you have excellent credit, you could qualify for an APR as low as 4.50% on a 12-month term.
If you like to do business in person, though, SFCU might not be the best choice. That is, unless you live in central Tennessee. That’s where all of SFCU’s brick-and-mortar branches are located.
SFCU has a minimum credit score requirement of 600 but doesn’t offer prequalification. You’ll need to agree to a hard credit hit to see if you’re eligible. You also need to join the credit union before you can borrow.
All SFCU members must open a savings account with a deposit of at least $5. To become a member, you must meet one of the requirements below:
4.54%
36-96 months
Not disclosed
Navy Federal Credit Union (NFCU) gives active-duty and retired military a 0.25% rate discount on auto loans. NFCU offers other unique perks, too. For instance, if you’re on active duty, you can get paid early if you get your paycheck directly deposited into an Active Duty Checking account.
Still, like many other car loan lenders, NFCU doesn’t disclose its minimum credit score requirements. It also has strict membership requirements that not everyone will meet.
Read our full Navy Federal Credit Union auto loan review.
NFCU membership is open to the following groups:
You must also open an account with a deposit of $5 or more.
4.74%
36-84 months
Up to $150,000
PenFed’s car-buying service can help you save money in two ways. First, you could get cash back and bonuses through the car’s manufacturer. PenFed will also give you a discounted 4.74% APR on your car loan.
Like with any credit union auto loan, PenFed requires you to join before you can borrow. And although PenFed is overall competitive, you have to use its car-buying service to get its lowest APRs.
Read our full PenFed auto loan review.
PenFed doesn’t provide much insight into its credit score requirements. However, PenFed membership is open to everyone. All you have to do is open an account with a $5 deposit and you can apply for a loan.
Ratings and reviews are from real consumers who have used the lending partner’s services.
Ratings and reviews are from real consumers who have used the lending partner’s services.
5.69%
24 - 96 months
$2,500-$100,000
Applying for auto financing when you have less-than-perfect credit can be a pain. Autopay is an auto loan marketplace that can make the process easier. Fill out one quick form online and you could have multiple offers to compare. Better yet, it works with borrowers with scores as low as 550.
Note that Autopay’s advertised minimum APR won’t apply to you if you have bad credit. Lenders give their lowest rates to those with the highest credit scores. You’ll need to prequalify to see what kind of rates you might get from Autopay’s lending partners.
Read our full Autopay marketplace review.
Autopay is a loan marketplace that connects borrowers to partner lenders. These partners all have different eligibility requirements. To use the marketplace, you must have a credit score of 550 or better. From there, you can prequalify to see what lenders you might be eligible for.
5.99%
48-72 months
From $7,500
Auto financing from a large bank can have its perks. Compared to small, regional banks, large banks tend to have more digital presence. Case in point — you can apply for an auto loan through Bank of America’s mobile app.
Bank of America auto loans are open to anyone, but only Preferred Rewards members qualify for APR discounts. To be a Preferred Rewards member, you must have an eligible Bank of America personal checking account.
Read our full Bank of America auto loan review.
Bank of America’s borrower requirements are unclear. It does, however, give some guidelines about the cars eligible to be financed. To get a loan, the car you’re buying must:
Ratings and reviews are from real consumers who have used the lending partner’s services.
Ratings and reviews are from real consumers who have used the lending partner’s services.
6.49%
36-72 months
From $4,000
According to internal LendingTree data, you could find competitive rates with Capital One whether you have good or bad credit. It also has a low minimum loan amount, so an inexpensive used car isn’t off the table.
That said, Capital One won’t finance a car from just anywhere — you have to buy from a partner dealer. However, its Auto Navigator tool can help you find your perfect ride from an eligible dealership.
Read our full Capital One auto loan review.
Capital One doesn’t specify its requirements, but our data shows that it works with borrowers on both ends of the credit spectrum. You can check your eligibility by prequalifying on its website.
6.69% (with autopay)
12-84 months
$5,000-$100,000
Buying a car from a private party instead of a dealership can save you money, but finding a private-party auto loan can be challenging. PNC might help.
This bank offers several types of loans, including private-party car loans. You might even be able to buy a car that isn’t yet fully paid off. As long as the seller comes with you to your loan closing, PNC can use a portion of your loan to pay off the existing loan. Then, you can transfer ownership.
However, unlike PNC’s dealership loans, you’ll need to apply for a private-party auto loan by visiting a branch.
Read our full PNC auto loan review.
PNC doesn’t specify its borrower requirements, including minimum credit score. Like other lenders, it’ll probably review your credit history, debt-to-income (DTI) ratio and other factors.
6.74%
Up to 84 months
Up to $500,000
Most lenders charge a higher APR on used car loans, but not Digital Federal Credit Union (DCU). Whether you’re buying used or new, you can enjoy the same low rate. If you have excellent credit, you might be able to borrow more than what the car is worth. This could help you cover registration and insurance costs.
Like other credit unions, though, you have to become a member to borrow. You must also take a hard credit pull to check your eligibility since you can’t prequalify.
Read our full DCU auto loan review.
DCU doesn’t specify what credit score it requires for an auto loan. It does provide details about who is eligible for DCU membership. People in the below groups can join DCU:
Ratings and reviews are from real consumers who have used the lending partner’s services.
Ratings and reviews are from real consumers who have used the lending partner’s services.
6.85%
36-72 months
From $5,000
Carvana’s unique online car-buying experience could be a great choice for the right person. Just hop onto Carvana’s website, find your desired car and apply for financing — all without leaving your home.
Still, not everyone will feel comfortable buying a car online. Carvana has a seven-day satisfaction guarantee, but you can’t check out the car in person before buying. Also, it’s important to know that Carvana has been the target of several lawsuits, namely due to tag and titling issues.
Read our full Carvana financing review.
Compared to some lenders, Carvana’s eligibility requirements are transparent and easy to meet. To borrow, you must:
Ratings and reviews are from real consumers who have used the lending partner’s services.
Ratings and reviews are from real consumers who have used the lending partner’s services.
7.49% (with autopay)
Varies
$5,000-$100,000
Traditional auto loans use your vehicle as collateral. If you don’t make your payments, your lender can repossess your car. Not with LightStream.
This lender offers unsecured loans, which means it doesn’t require collateral. Instead, your eligibility hinges only on your credit score, assets and borrowing history.
Thanks to a lack of vehicle restrictions and same-day funding, LightStream auto loans can come with little hassle for those who qualify. Still, expect to pay extra for the convenience. LightStream’s auto loan APRs are a little higher than others on this list.
Read our full LightStream auto loan review.
LightStream states it only lends to borrowers with good to excellent credit. Below you’ll find some metrics that LightStream says it looks for in approved borrowers:
Not disclosed
12-84 months
From $4,000
Chase Bank offers auto loans at dealerships across the country. So even though you can only use Chase at a partner dealer, you can get prequalified. Not all lenders offer this option. Also, Chase doesn’t always require a down payment.
Unfortunately, Chase doesn’t advertise its rates. You must prequalify to see what APR it might offer you.
Read our full Chase auto loan review.
Chase doesn’t specify what it’s looking for in its borrowers. It does shed some light on the types of vehicles it will finance. Eligible vehicles must:
Since the first quarter of 2022, average auto financing rates have surged dramatically. For new vehicles, rates went from 4.07% in early 2022 to 7.18% at the end of 2023 — a 76% increase. During that same timeframe, rates for used car loans soared 38%, from 8.62% to 11.93%.
| “Auto loan rates may come down as 2024 progresses, but significant declines aren't guaranteed. Fortunately, regardless of what the Fed does, shopping around for an auto lender can still help those in the market for a car save money. Different lenders can offer different rates to the exact same borrowers. Shopping around can help you lower your monthly payments and save money over the lifetime of your loan.” | “As pandemic-era supply chain issues continue to subside, and inventory rises, car prices have fallen, and they may continue to tick down as 2024 progresses. That said, prices are unlikely to plummet, and depending on what you're planning to buy, you could still end up spending a pretty penny on a new or used vehicle.” |
Improving your credit score isn’t the only way to get a better car loan rate. You could also:
Order your free credit report and check for errors. Disputing credit report errors can give your score a lift. Unfortunately, errors are more common than you might think.
Not all auto loans require a down payment. Even so, it may be a good idea to make one anyway.
Putting money down takes some of the lender’s risk and transfers it to you. After all, you’ll lose your down payment if the lender repossesses your car. As a result, a down payment can help you secure a better rate.
Cars are getting more expensive, so 84-month car loans are increasingly popular. That’s because longer terms usually mean lower monthly payments. However, longer terms also almost always carry higher rates.
Captive financing is when you get your car loan straight from your car’s manufacturer. Occasionally, these manufacturers offer 0% APR car deals (usually around holidays and the end of the year). There’s a caveat, though — these deals typically only apply to specific vehicles.
Sure, you could let your dealer get a car loan for you. Or, you could follow the steps below — they might help you get the best rate.
Generally, the best place to finance a car is with the lender that offers you the lowest rates. Credit unions usually have the most competitive APRs, but you have to be a member to borrow.
However, cheap rates aren’t the only thing to consider. If your credit needs work, you might need to prioritize lenders with looser eligibility requirements (such as Carvana).
Auto financing rates fluctuate with the market, so the best auto loan is always changing. At the time of this writing, Southeast Financial Credit Union is offering the lowest rates on this list. Its starting APR is 4.50%.
Shorter loan terms typically carry the lowest rates. At the same time, a shorter term can cause a higher monthly payment (since you’ll have less time to spread your balance across). Use our auto loan calculator to see how different term lengths can impact your monthly payment.
It can be, but only if you are positive you can hold up your end of the deal.
Taking out an auto loan when you don’t currently have one can improve your credit mix. Your credit mix makes up 10% of your FICO score. Your payment history makes up 35% of your score, so on-time payments can give you a boost.
At the same time, if you make late payments, your credit score will likely take a nosedive. And if you take on a loan when you’ve already got a lot of debt, your credit utilization ratio might go up. This can negatively impact your score.
Usually, yes. Along with your credit score, your lender will review things such as your annual income and DTI ratio. If your debt levels seem to be outpacing your earnings, you will likely have a higher APR (if a lender approves you at all).
