Deciding and finding a great new car, van or truck can be really exciting for many of us. Doing the research, comparing the features, going on the test drive, and consulting with friends and family helps you to visualize your new car and your life with it. When the time comes to actually pay for the vehicle, it might not be so exciting. Many buyers, when they buy their new car, do not spend enough time in researching about auto loan rates, and end up taking the first best auto loan they come across.
Auto Loan Rates
A hasty decision regarding your auto loan might not be helpful to you financially. It is important to take the right loan suiting your requirements or else you could end up overpaying thousands of dollars till the tenure of your loan gets over. If you are planning to buy a new car or refinancing an existing loan, it is necessary to find and get the best terms possible.
Here is a list of lenders and brokers who offer affordable rates and required benefits for all types of buyers.
1. Best Overall Rates: Consumers Credit Union
Credit unions normally are considered better than banks. The reason being, these financial institutions have the capacity to give you superior interest rates than banks. This is possible as everyone with an account at a credit union is part-owner. Institutions like, Consumers Credit Union (CCU) can give their members spectacular deals.
There are many credit unions that need you to qualify certain qualifications in order to become its member, such as a resident of a particular state, an alumnus from a specific school, or being a part of a military branch. CCU makes it mandatory to pay a fee of five dollars and maintain at least that much balance in a savings account.
In return for this, you can avail of auto loans as lows as 2.99%. These loans consist of mechanical repair coverage, fixed rates, and a simple interest method that lets you pay lesser over the tenure of the loan.
The drawback of CCU loans is that not everybody gets approval from them. You need a minimum credit score of 640 to get their approval. They also do a hard credit check with every application hence it is suggested to apply there only when you are completely sure about buying a car.
2. Best Big Bank Lender: CapitalOne
It is one of the niche lenders and also has some of the best auto loans. CapitalOne is one of the major financial institutions and a common household name. If you are looking for a new or used car, through the bank’s Auto Navigator program, you can apply for pre-approval.
If your application gets approved, your pre-approval letter becomes workable at more than 12,000 dealers across the nation. These dealers are mentioned on CapitalOne’s website. You have to go to your desired dealership, present the letter, and the full application process begins once you have decided which car to go ahead with.
If you already own a car and are looking for better loan terms, you could look into CapitalOne’s refinance program. You can prequalify online and that takes a few minutes. This process does not show on your credit score. Once you have received your prequalification letter, it will help you understand if you should submit a full application. You are likely to get into the program if you have a 4.8/5 star rating.
CapitalOne offers many handy tools like Auto Navigator function, which allows buyers to put filters in their searches like a car’s particular make and model, and dealerships closer to them. If you want approval on a used car loan, CapitalOne needs the car to be at least of the 2006 model.
Almost half of the states where CapitalOne is present need the car’s model to be from 2008 or later. If this does not create any problem for you then you can enjoy loans of up $40,000 and APR rates as low as 3.24%, depending on your credit score.
3. Best for a Full Online Experience: Carvana
For those who want to buy their new car completely online, skip the dealership and bank, and have poor credit, Carvana is the right option for you. From the comfort of your home, you can apply for an auto loan, choose the car you want and get it delivered to your address.
If you want to trade in your old car, you can also do that. You have to mention the details needed, the company will give you an offer and collect it from your address.
They have very few requirements for their consumers and are quite easy to get, annual income should be $10,000, must be at least 18 years old, and have no active bankruptcies. There is no minimum credit score requirement. They do not make a hard inquiry on your credit when you pre-qualify, hence it does not affect your credit score.
Only when you place the order with them, they make a hard inquiry. Once you have prequalified, you are given a time of 45 days to make a purchase from their inventory. You can either get the car delivered to your address or collect the car or fly to the dealership and then drive back.
4. Best for Refinancing: OpenRoad Lending
If you are currently using a car, you have paid off your debt, your credit has improved, you received an increment after financing your auto loan, or maybe overpaying, OpenRoad might the right choice for you. It lets drivers like you refinance their existing loans and save almost an average of $100 every month on their car payments.
Their application process is completely online and quite simple. You can get your decision with full details about the loan within just an hour of application.
OpenRoad Lending’s customer service team is quite helpful if you need any assistance with your application. Almost 98% of their customers are satisfied with their loans. You should only apply here if you are serious about getting the loan.
To be eligible, you need a minimum 500 credit score and your monthly income should be $1,500 or more. The higher these numbers are, the greater is the chances of approval. OpenRoad Lending offers rates between 1.9% and 24.9%
5. Best for Looking Around: Lending Tree
If you have been thinking of getting a new car but wondering if it will fit in your budget, you should give a chance to LendingTree. You can look for different types of lenders and it will not affect your credit score. With the help of this feature, you can have a look at new cars, used cars, refinancing, or lease buyouts.
You will be needed to enter details like the loan type you are looking for, down payment, financial status, and the type of vehicle you are looking for. After receiving these details, Lending Tree will match you with lenders.
You can understand and compare the offers to decide the best rates and terms for yourself. When you decide to apply, you have to submit a full application to the lender. Lending Tree also helps with a loan payment calculator, free credit score finder, and other tools.
Depending on your credit score and current financial situation, you will find a loan option to help you pay for the car you have wanted to buy. Having so many different loan options to choose from, it is important to do enough and right research before you start looking for auto loans for a new or old car.