Car Loans In My Area: What’s the best place to get car loans? The answer varies based on each borrower’s needs, preferences, and credit history. The good news is there are a variety of options out there to consider.
Car loans are secured loans that help borrowers pay for a new or used car. They are available from dealerships and a variety of lenders, so it’s important to shop around in order to find the best interest rates and terms for your vehicle. The lenders profiled on this page are a great place to start.
The Best Car Loans Companies At A Glance
No restrictions on age or model of vehicle
Secured and joint loan options
Varies by state
Check offers from multiple lenders
Bank of America
as low as 2.19%
Interest rate discount for Preferred Rewards members
Same starting interest rates for new- and used-car loans
Starting at $4,000
Does not require down payment
No credit requirements
$4,000 and more
Auto buying concierge program
as low as 3.99%
Free dealer match
Best Car Loan Companies for 2021
LightStream is the online lending division of SunTrust Bank. It offers car loans for new and used car purchases, private party purchases, lease buyouts, classic cars, and unsecured loans (if you have very good credit.)
LightStream rewards the comparison shopper with its Rate Beat Program. If you find a lower rate with a competing lender, LightStream will offer a rate 0.10 percent lower than that competing rate (excluding secured loans). There are also no restrictions on the make, model, or mileage of the vehicle.
LightStream charges no application fee or late payment fees. If you fill out an online application, you may have funds deposited to your bank account on the same day.
2. OneMain Financial
OneMain Financial can be an expensive lending option, with a super high starting interest rate and an origination fee. It also has the lowest maximum loan amount of our recommendations, at $20,000. Depending on the car you plan to purchase, especially if it’s new, OneMain may not be able to lend enough funds to cover it.
But, if you have poor credit, it can be a great choice for your car loan. OneMain has no minimum credit score requirement.OneMain offers secured loan options, which may help you qualify for a lower APR. You can also get free access to your credit score.
Uniquely, OneMain offers joint loans, where multiple borrowers can apply and be responsible for one loan. You can submit your information online for an application, but you’ll have to schedule an appointment to discuss your options at a branch office.
Clearlane, powered by Ally, is a marketplace for auto lenders. It will connect you to one of its partners for a refinancing loan or a lease buyout loan. Because of this, you can compare a few offers in one place without running a bunch of credit checks.
ClearLane’s specific focus is on auto lease buyouts, and it does a pretty impressive job of paying balloon fees — what users pay at the end of their lease if they decide to buy the car.
Clearlane does accept co-signers, which can help lower your APR and possibly get you approved faster. You can apply either online or over the phone. To qualify, you have to make a salary of at least $2,000 a month and have no history of bankruptcy.
4. Bank of America
Current Bank of America customers could benefit most from an auto loan with the bank, as they’ll receive an up to 0.5% interest rate discount. Bank of America has quite a few options for auto lending — new and used car loans, refinancing, lease buyout, and private party loans.
Bank of America doesn’t disclose the full range of interest rate possibilities, but its starting rates are low compared to the competition. And once you’ve been quoted an offer, it’s locked for 30 days — giving you plenty of time to shop around for the right car.
However, that shopping may be a bit restrictive — Bank of America encourages you to shop at one of the dealerships in its network. It’s not a requirement, but the process is streamlined if you do.
Overview & Benefits
Great Rates and Service
In addition to low rates, you get the friendly, knowledgeable service you expect, along with some added benefits that make it easier to get started:
No application fee
Easy online application
Affordable payment options
No pre-payment penalties
Simple electronic closing process
And, it’s not too late to take advantage of great low rates, even if you financed your car or truck elsewhere.
Guide to Choosing the Best Car Loans
Auto loans let you borrow the money you need to purchase a car. Since car loans are considered “secured,” they require you to use the automobile you’re buying as collateral for the loan.
This is both good news and bad news. The fact that your loan is secured does put your car at risk of repossession if you don’t repay the loan, but having collateral typically helps you qualify for lower interest rates and better auto loan terms.
Auto loans typically come with fixed interest rates and loan terms ranging from two to seven years, but it’s possible to negotiate different terms depending on your lender.
What Are Car Loans And How Do They Work?
Auto loans are secured loans that use the car you’re buying as collateral. You’re typically asked to pay a fixed interest rate and monthly payment for 24 to 84 months, at which point your car will be paid off. Many dealerships offer their own financing, but you can also find auto loans at national banks, local credit unions and online lenders.
Because auto loans are secured, they tend to come with lower interest rates than unsecured loan options like personal loans. The average APR for a new car is anywhere from 3.24 percent to 13.97 percent, depending on your credit score, while the average APR for a used car is 4.08 percent to 20.67 percent.
What to Know Before Applying for a Car Loans In My Area
When looking for a car loan, it’s best to shop around with a few lenders before making your decision. This is because each lender has its own methodology when approving you for a loan and setting your interest rate and terms.
Generally, your credit score will make the biggest impact on the rates offered. The higher your credit score, the lower APR you’ll receive. Having a higher credit score may also allow you to take out a larger loan or access a broader selection of repayment terms.
Choosing a longer repayment term will lower your monthly payments, although you’ll also pay more in interest overall.
If you’ve found a few lenders that you like, see if they offer preapproval — going through this process will let you see which rates you qualify for without impacting your credit score.
Your financial situation and the type of vehicle you’re purchasing are key factors in determining the type of lender that’s best for you. It’s always a good idea to get several quotes from different types of lenders so you can compare offers and help make sure you’re getting the best rate.
If you can’t qualify for a car loan or are being offered sky-high interest rates, consider getting a co-signer, saving up for a larger down payment, or taking some time to build your credit before your car purchase.