Categorized | Car Loan

Best Car Loan Rates – Top 8 Revealed

Wallet with money outside and behind it is a red toy car

Whether you're buying your first car ever or are in the market for a new one, getting a new car is an exciting experience. Unfortunately, it's also stressful. Cars are expensive and depleting your savings or checking account to purchase a new one can be overwhelming. Luckily, with the best car loan rates we cover in this article, you don't have to do that.

There are so many car loans out there that choosing what loan to go with can be an exhausting addition to picking the perfect car. To save you the added stress and time, we've done the research to narrow down the best car loan rates available, and we've got them for you right here. The best part is, there's an option on this list for anyone, even if you have a low credit score or high debt.

Product FAQ

Lots of questions come up when buying a new car, and when choosing a car loan, the same applies. To clear up any confusion and help you ease into the best car loan rates, we've got the answers to some common questions below.

1. What Is a Car Loan?

2. Are Car Loans Only for New Cars?

3. Why Take Out a Car Loan?

4. Where Can You Apply for Best Car Loan Rates?

5. How Do You Qualify for a Car Loan?

How We Reviewed

Car parked at the front of a house

Image by F. Muhammad from Pixabay

To provide you with the absolute best car loan rates on the market, we've taken the time to research all the most important components. We've reviewed each car loan on this list based on the financial institution, general information, pros and cons, and APR range. We've also considered the credit score required to be accepted for these loans, loan offer types, and more.

Overall APR Range of This Product (and Similar Products)

APR ranges for the best car loan rates differ based on a plethora of components such as credit score, income, car value, car make and model, car year and mileage, debt to income ratio, and more. Better credit scores lead to lower APRs while high debt to income ratios and low credit scores result in high APRs.

Loan APRs also vary based on the type of loan. For example, new car purchase loans often have a lower APR than refinancing loans. The best car loan rates on our list range from around 1.99% to 21.99%.

What We Reviewed

  • LightStream
  • Consumers Credit Union
  • U.S. Bank
  • Capital One
  • SpringboardAuto
  • Bank of America
  • MyAutoLoan.com
  • CarFinance.com

Information

LightStream is an online lending division of SunTrust Banks that offers car loans for new and used purchases, private purchases, classic cars, refinancing, lease buyouts, and unsecured loans.

PROS

  • No hassle loans
  • Well-known bank
  • An array of loan offers

CONS

  • Need top-tier credit
  • Online application only

APR Range

The best car loan rates for LighStream are around 3.34% to 8.34% for new and used dealership purchases. APR range is around 4.39% to 9.19% for private party purchases. Refinance APR ranges from around 3.34% to 8.59%. Lease buyout ranges from 3.64% to 9.19%.


Information


Credit Unions are known to provide better rates than banks, so a credit union like Consumers can be a great option for the best car loan rates. As long as you become a member, Consumers Credit Union provides car loans to a wide range of people with varying financial situations with competitive APRs.

PROS

  • Low APR
  • Flexible loan terms
  • Applications available online, over the phone, or in person in Illinois

CONS

  • $5 membership fee
  • $5 minimum savings account balance required
  • Hard credit pull required for rates

APR Range

Since Consumers Credit Union provides car loans to people with a wide range of credits, the APR range is from as low as 2.49% to as high as 21.99%.


Information

U.S. Bank features a clear and easy application process. U.S. Bank also provides an array of loan options, competitive interest rates, and is consumer friendly. Plus, there is also a “green car” perk that provides reduced interest rates for those who choose certain fuel-efficient vehicles.

PROS

  • Reputable bank
  • Applications available online, over the phone, or iaGreat for buying from a private sellern person in Illinois

CONS

  • Not the best option for lease buyouts
  • Potential high rates on older and cheaper cars

APR Range

The APR range from U.S. Bank has a wide range based on many components, but APRs start as low as 4.59%.


Information

Capital One is a well-known bank with a wide range of banking and credit card options, and they offer car loans too. Capital One provides financing for new and used auto purchases and refinancing. This loan is a great fit for people who want to check rates without impacting their credit score, want the ease of mind that comes with a well-known bank, and want to start the process with pre-qualification.

PROS

  • No upfront hard credit inquiry
  • No application fee
  • A well-known and reputable bank

CONS

  • Excludes certain makes and models
  • Not available in Hawaii or Alaska

APR Range

The best car loan rates provided by Capital One are around 3.99% for purchases and around 4.1% for refinancing. These rates are most likely only available to individuals with excellent credit. For those who are rebuilding their credit, they will more likely be offered an APR of around 8.2% for new cars and around 11.2% for used cars.

If you know your credit score, you can use Capital One's car payment calculator to help determine an estimated APR.


Information

If you're worried about getting a car loan with less than perfect credit, you still have options. Although the better your credit, the better your APR offers, the lower credit doesn't have to keep you from getting a car loan. SpringboardAuto will provide car loans for those with credit scores as low as 500. As an added bonus, SpringboardAuto won't hurt your credit by running a hard credit inquiry to provide you with rates.

PROS

  • Quick application
  • No hard credit inquiry for rates
  • Works for lower credit scores

CONS

  • Excludes certain makes and models including electric cars, heavy-duty trucks, and more
  • Not available in all states
  • Online only

APR Range

APR for SpringboardAuto car loans range based on a variety of factors, but the lowest APR offered is around 5%.


Information

Bank of America offers a variety of car loans including loans for new and used dealer purchases, refinancing, lease buyouts, and private party sales. Bank of America offers car loans in all 50 states. Bank of America also provides a fast and easy application process, low rates, quick decision, and possible interest rate discounts for some Bank of America clients.

PROS

  • A well-known and reputable bank
  • Plenty of branches for in-person application
  • Plenty of branches for in-person application

CONS

  • No online preapproval
  • No financing provided for independent dealers

APR Range

APR for Bank of America's best car loan rates range based on a variety of factors. The starting range of APR is around 3.49% for new dealership purchases, around 3.79% for used dealership purchases, around 4.29% for refinancing, and around 4.79% for lease buyout.


Information

When it comes to car loans, MyAutoLoan.com does things a little differently. They solicit offers from several lenders on your behalf, matching borrowers with a wide range of auto loan options. Auto loans are offered for new and used dealership purchases, refinancing, and lease buyout.

PROS

  • Multiple loan offer options
  • Works with average credit scores
  • Variety of loan types

CONS

  • Hard credit pull required
  • Borrowers may be contacted by multiple lender companies

APR Range

Since MyAutoLoan.com scans a large variety of lender options and providers, the APR range is pretty wide. APRs through MyAutoLoan.com range from around 1.99% to 24.9%.


Information

CarFinance.com is another great option for anyone who has a low credit score, such as one that is as low as 525. This provider also offers fast decision notification, and a borrower can be pre-approved in as little as 30 minutes. Plus, this provider will offer car loans to individuals who carry debt too. Borrowers who have a debt load up to half their monthly income can still be approved for a loan.

PROS

  • Fast decision
  • Good option for those with low credit
  • Good option for people with high debt levels

CONS

  • Higher APRs than other lenders
  • Not available in all 50 states

APR Range

While CarFinance.com provides car loans for individuals with a high debt to income ratio or low credit, the APR range is not as low as other providers. Purchase loans have an APR range from about 7.99% to 14.99%. Refinance loans have an APR range of around 7.99% to 21.99%.


The Verdict

A person is holding a car keys

Image via Pexels

The overall best car loan rates are through Consumers Credit Union as this provider offers loans to consumers with a variety of credit scores and at rates as low as 2.49%. If you're willing to look through a few options, MyAutoLoan.com is a great choice, offering APRs as low as 1.99%. If you're looking to take out a car loan but have poor credit or a large debt stacked up, then it's a good idea to go with CarFinance.com. If you want to take out a car loan, and it's very important for you that your credit isn't affected by inquiries, then Capital One and SpringboardAuto are both options for you as they don't require hard credit inquiries for rates.

The best car loan depends on your qualifications and needs, but with the best car loan rates on this list, theirs a great choice for everyone.

Featured Image: Image by andreas160578 from Pixabay

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