How To Find Best Car Loan Rates

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Hear from our editors: The best motorcar loan rates of 2022

Updated November 18, 2021

This date indicates our editors' final comprehensive review and may not reverberate recent changes in private terms.

Editorial Note: Credit Karma receives compensation from third-political party advertisers, but that doesn't bear on our editors' opinions. Our marketing partners don't review, approve or endorse our editorial content. It's accurate to the best of our knowledge when posted.

If you're hoping to authorize for the best auto loan rates, having excellent credit is a good get-go.

But even if your credit isn't perfect, some lenders offer interest rate discounts and other features that may make them a good fit for you lot. We've rounded up banks, credit unions and online lending platforms offer some of the best starting loan rates (as of November 18, 2021) and other potential benefits for different auto loan types.

Best for new-car loans: Banking concern of America and PenFed Credit Spousal relationship
Best for used-auto loans: Chase and U.S. Depository financial institution
Best for private-party loans: LightStream and PNC
All-time rates through lending platforms: AutoPay and MyAutoLoan

Best auto loan rates

Best rates for...	Lender	Starting APR	Loan terms	Loan amounts
New-automobile loans	Bank of America*	2.29%	12 to 75 months	$vii,500 minimum
New-car loans	PenFed Credit Wedlock	0.99%	36 to 84 months	$500-$100,000
Used-machine loans	Hunt	ii.74%	48 to 72 months	$four,000 minimum
Used-automobile loans	U.S. Bank	two.59%	12 to 72 months	$5,000-$100,000
Private-party loans	LightStream	3.49%	36 to 84 months	$5,000-$100,000
Individual-party loans	PNC	four.39%	12 to 72 months	$5,000-$100,000
Lending platforms	AutoPay*	1.99%	24 to 84 months	$two,500-$100,000
Lending platforms	MyAutoLoan	2.49%	24 to 72 months	$eight,000 minimum ($v,000 for refinance)

*May offer different terms on Credit Karma.

Best rates for new-auto loans: Bank of America and PenFed Credit Union

Loans for new cars typically have lower involvement rates than used-auto loans, and so you may already be on runway to score a better machine loan rate. Amidst all of the lenders we reviewed, Bank of America and PenFed Credit Union are our top choices.

Bank of America

Why Bank of America stands out: If y'all're a Preferred Rewards client with the bank, you lot can qualify for an involvement rate that'due south upwards to 0.v% lower than the already low annual percentage rate, or April, that the bank offers.

Simply to qualify for the Preferred Rewards rate disbelieve of 0.5%, you must have 3-month boilerplate combined balances of at least $100,000 in qualifying accounts with Bank of America and Merrill. And to exist eligible for the lowest rate discount of 0.25%, you lot'll still have to have three-month average combined balances of $20,000.

Hither's some more info near Banking company of America auto loans.

If yous cull to purchase from a dealership, you'll exist limited to franchise dealerships and a few contained dealers, including CarMax, Carvana and Enterprise Auto Sales.
Repayment terms range from 12 months to 75 months.
If your application is approved, your rate is locked in for thirty days, which gives you fourth dimension to store around.

PenFed Credit Matrimony

Why PenFed Credit Marriage stands out: PenFed offers auto loan rates as depression as 0.99% if you purchase a new vehicle through its machine-ownership service — one.79% if you get a new-car loan just don't use the car-ownership service. It too allows you to finance up to 125% of the purchase price of the vehicle. That feature can come in handy if you're low on greenbacks and want to buy some add-ons like a maintenance contract or

GAP insurance.

Hither are some things to know before you utilize for a PenFed Credit Wedlock auto loan.

You must go a member to get a car loan with PenFed Credit Spousal relationship, but membership is open to anybody. To go a member, yous'll demand to provide some basic information and open a savings account with a $v initial eolith.
Loan terms range from 36 months to 84 months. Remember that while choosing a longer term could reduce your monthly payment, you could end up paying more in interest over the life of the loan.
If you lot've been a member of the credit wedlock for at least 90 days, yous can employ for preapproval (a provisional loan approval that includes an estimated loan rate and terms). Preapproval tin can tell you how much you may be approved to borrow and can assist you focus on finding a car that fits your upkeep instead of worrying near what financing the dealer may offer yous. Just keep in heed that preapproval isn't a guarantee of blessing, and your loan terms may change after you submit a formal application.

Best rates for used-machine loans: Chase and U.S. Bank

If you're buying used, yous may not get an auto loan rate that'south as depression as if y'all were buying new. But considering that, according to Carfax, new cars tin can lose more than 10% of their value within a month of your purchase, a used vehicle may still make improve sense financially.

For used-machine loans, we like Hunt and U.Due south. Bank. Here'due south why.

Hunt

Why Hunt stands out: While the bank doesn't list its motorcar loan rates, yous tin can use its online motorcar loan calculator to see estimated rates. We were able to come across an estimated APR equally low every bit 2.74%.

Here are some more details almost Chase.

Yous tin can go an interest charge per unit discount if you're a Chase Private Client, though this requires an boilerplate daily balance of at least $150,000 in qualifying deposit and investment accounts.
Chase doesn't require a down payment on auto loans. But if you're able to, it may exist a good idea to brand one. It could help meliorate your chances of approving, lower your interest charge per unit and reduce your hazard of becoming upside down on your auto loan.
You must finance a car from a dealer in Chase's network.

U.S. Bank

Why U.S. Bank stands out: The depository financial institution offers interest rates as low as 2.59% for those who meet a specific set of criteria. The requirements include having excellent credit, buying a car that's less than a year old and setting up automatic payments from a U.S. Depository financial institution business relationship. You also must have a loan amount of at least $30,000, a loan term of 36 months or less, and a loan-to-value ratio of 80% or less.

Hither's more than on U.South. Bank.

You need to live in i of the 26 states where U.Due south. Bank has a branch.
Loan terms range from 12 months to 72 months.
The bank charges a prepayment penalty if y'all pay off your loan within the beginning year.

Best rates for private-party loans: LightStream and PNC

Buying a motorcar from an individual instead of a car dealership has both benefits and drawbacks. It tin can exist cheaper, merely non all lenders offer financing for private-party sales.

LightStream and PNC are two banks that offer private-party loans with low starting rates.

LightStream

Why LightStream stands out: LightStream offers rates equally low as 3.49% APR on private-party loans if you opt into automated payments.

Here'south more on LightStream.

LightStream doesn't offering the opportunity to apply for preapproval.
Repayment terms for private-party loans range from 36 months to 84 months.
LightStream has no restrictions on the model twelvemonth, make or mileage of vehicles information technology volition finance. This can be helpful if you lot plan to purchase an older vehicle.

PNC

Why PNC stands out: Interest rates go as depression equally 4.39% if you opt into automatic payments from a PNC checking account.

Hither'due south some more than info on PNC.

PNC doesn't appear to finance motorcar models older than 2013.
Yous need to live in a state where PNC does business to apply (enter your ZIP lawmaking on the online date request class to detect out if y'all're eligible). PNC branches are located in the Mid-Atlantic, Southeast and Midwest regions of the U.S.
PNC offers private-political party loan terms of 12 months to 72 months.

All-time rates through lending platforms: AutoPay and MyAutoLoan

AutoPay and MyAutoLoan aren't direct lenders — they partner with financial institutions across the U.S. to offer auto loans online. Working with a variety of partners helps both companies discover loans for people across the credit spectrum, as well equally offering competitive starting APRs to those who qualify.

AutoPay

Why AutoPay stands out: AutoPay offers rates equally low as 1.99% Apr for those who qualify.

Hither's more information almost AutoPay.

AutoPay lenders offer a range of auto loans, including loans for new and used cars purchased from a dealership, private-party loans, and refinancing options such equally traditional, cash dorsum and charter buyout loans.
AutoPay offers the ability to utilize for prequalification. If you prequalify, you can bank check your estimated rates and loan terms without affecting your credit scores. But be aware that prequalification isn't a guarantee of loan approval. And if yous're approved after y'all submit a formal awarding, your loan terms may change.

MyAutoLoan

Why MyAutoLoan stands out: Some lenders in the MyAutoLoan network offer rates as depression as 2.49% if you qualify. MyAutoLoan makes shopping around for a machine loan easy — after submitting the prequalification awarding, you could receive upwardly to four loan offers.

Here are some more than details about MyAutoLoan.

Lenders in the MyAutoLoan network offering new- and used-car loans, private-political party loans, lease buyout loans and refinance loans.
MyAutoLoan considers people who accept less-than-perfect credit. Lender requirements vary, just in general, you must be at least 18 years old, take a FICO® score of at least 575, and have a minimum income of $21,600 to qualify ($eighteen,000 for refinance).
MyAutoLoan doesn't offer loans in Alaska or Hawaii.

To learn more than, check out our

full review of MyAutoLoan.

How nosotros picked these lenders

In choosing lenders for this roundup, we looked primarily at their starting loan rates. But we as well considered other factors that can exist beneficial, such every bit a range of loan terms, interest rate discounts, the ability to apply for prequalification or preapproval, and geographic availability.

While some of these lenders don't offer auto loans in all 50 states, we yet felt they could offer plenty value to include them on the list.

What to consider with starting auto loan rates

The most important thing to keep in mind as you lot're searching for the best auto loan rates is that they're typically reserved for people with fantabulous credit. Depending on the

credit-scoring model

the lender uses, that could hateful having a score in the high 700s or even 800s.

Beyond your credit scores, factors including the kind of loan you want, the amount and the repayment term could impact whether you qualify for a lender'south lowest interest rates.

Note that as you're shopping around, yous can employ for multiple car loans in a brusk period — typically 14 days, though it can vary by credit scoring model — during which the associated

hard credit inquiries

might only count every bit a single hit.

Equally you compare loan offers, consider any fees, the loan amount, loan term and estimated monthly payment in add-on to the April. Weighing all loan factors can help you place the best loan for your needs.

What is a good interest rate on an auto loan?

These were the average auto loan interest rates every bit of June 25, 2021, co-ordinate to the National Credit Union Assistants.

Loan type	Credit unions	Banks
New-car loan, 48-month term	2.76%	4.68%
New-car loan, sixty-month term	2.87%	4.78%
Used-motorcar loan, 36-calendar month term	ii.fourscore%	5.08%
Used-car loan, 48-month term	ii.91%	five.13%

But remember that a range of factors, including the blazon of lender, can bear upon the rate you're offered. Credit unions tend to offer lower rates than banks. And if y'all qualify, y'all may be able to get the lowest possible rate — 0% APR — when you get a new-auto loan through an automaker'southward finance company.

FAQ: Editors' answers

Editorial Note: Credit Karma receives bounty from third-party advertisers, but that doesn't affect our editors' opinions. Our marketing partners don't review, approve or endorse our editorial content. Information technology's accurate to the best of our knowledge when posted.

What kind of credit scores do y'all need to buy a car?

There'due south no universal minimum credit score required to get a car loan — score requirements vary from lender to lender. Some lenders specialize in lending to people with excellent or good credit, while others focus on lending to those with less-than-perfect credit scores.

In full general, lower credit scores could result in fewer offers from lenders. In those cases, you may be required to brand a down payment or apply with a co-signer who has good credit.

Lower credit scores can besides drive up the involvement rate offered to you, which means you could end up paying more to finance your car than someone with good credit. Shopping effectually to see what rates and terms yous might qualify for with different lenders can aid yous find a loan that fits your upkeep.

What credit score do yous need to get 0% Apr on a motorcar loan?

To qualify for a 0% APR auto loan, yous typically must have excellent credit scores. This could hateful a score in the upper 700s or even in the 800s, depending on the credit-scoring model the lender uses.

Plus, you'll usually need to get your auto loan through the automaker's financing visitor, and you'll be limited to the makes and models included in the 0% April promotion. This April is typically simply available on new cars, besides.

Is it better to get a motorcar loan from a banking concern or dealership?

You may be offered a similar interest charge per unit, terms and fees whether you apply for a loan from a bank or through a dealership, simply you won't know for sure unless you store effectually and compare offers.

In some cases, though, a car loan from a banking company may be a better option. Although information technology'southward not guaranteed, a bank may offer you a lower charge per unit because dealers sometimes add together a markup to your loan'south involvement rate in exchange for arranging your financing. Some other do good: It can besides prevent a situation where you autumn in love with a motorcar and accept the financing the dealer offers you before comparing other loan options.

Terminal, some banks offering the power to utilize for preapproval. If you're preapproved, you'll go an estimate for a loan rate and terms you're conditionally approved for. Preapproval isn't a guarantee of loan approving, but it provides helpful data. For case, knowing the maximum amount you lot tin can finance can assist y'all stay on upkeep and avoid tempting upsells as you store for a car.

Is a 72-month motorcar loan a bad thought?

Whether a 72-calendar month car loan is good or bad depends on your unique financial situation. It's correct in some cases, and wrong in others.

While a longer loan term can reduce your monthly payment, you may end up paying more in total interest over the length of the loan. Yous could also end upwardly owing more than on your machine than information technology's worth, which can brand selling or trading in your motorcar complicated and expensive down the route. And if your loan term is longer than your automobile warranty period, you lot could find yourself shelling out a hefty amount for machine repairs while still making loan payments.

Withal, a 72-month auto loan may exist ideal if the lower monthly payments free up some cash to pay down higher-interest debt elsewhere more than rapidly.

Before getting a 72-month car loan, consider whether buying a less expensive vehicle or delaying your purchase until y'all can save for a larger down payment might be better options to make your loan more affordable.