auto loan rates

Want to buy a car but do not have enough money? So want to take an auto loan? But before taking auto loan you must know auto loan rates.  Thousands of citizens like you are taking auto loans to buy cars. The current auto loan amount in the United States is $1.18 trillion!

Buying a car is a financial burden. If you buy a used car, you can buy it at a lower cost, but if you buy a new car, it is pretty expensive. In this case, the price is more or less based on the brand, model, space, design, etc.

Car loan is a secured loan. This loan is to be repaid in equal installments as per the pre-determined period of time. The car you buy will be used as collateral, if you can pay all the installments then you will get the ownership of the car. And if you fail to pay the loan installment, lender will seize the car.

Auto loans are usually come with fixed interest rate and the term of the loan is two to seven years. However, you can increase the term by negotiating with your lender.

Auto Loan Rates for 2021

In this article, I have discussed auto loan rates of different companies. You know that auto loan rates change every year, so you should keep up-to-date.

LightStream

LightStream is a subsidiary of SunTrust Bank. Those who have a very good credit score will easily get a loan from them to buy a new or old car. You can buy the car either from a dealer or third party.

They offer low APR car loans. In case of car loan, this low APR is offered only to those who have the best credit profile. This rate is quoted with AutoPay discount. Rates without AutoPay are 0.50% points higher.

LightStream currently offers an APR of 4.94 to 10.39 for new car purchases.

They offer auto loan from $5000 to $100,000. Loan term is from 24 to 84 months. LightStream offers fixed rate, simple interest fully amortizing installment loans. They do not charge fee.

Fund will be deposited directly into your account and you will decide when to pick it up. This loan can be used to buy any car.

Note

  • MIN. CREDIT SCORE – 660
  • STARTING APR – 2.49% (with autopay)
  • LOAN AMOUNT – $5,000 to $100,000
  • TERM LENGTHS – 24 to 84 months

Capital One

LightStream will give you the freedom to buy a car from anyone but Capital One will not give you the opportunity to buy a car from anyone. You have to buy a car from their participating dealer.

Using Capital One’s Auto Navigator you can see various models of cars from different parts of the country. Here you will find many advantages, as you can easily compare different cars.

This will make your decision much easier.

When you choose the car of a participating dealer, you have to make a credit application with that dealer.

On the basis of your credit score, they will accept or reject your application.

If they approve your application, you will need to enter into a retail installment contract with them. You will find this facility in all states except Hawaii & Alaska.

Capital One’s minimum loan amount is $4,000. Depending on the amount of your loan, your minimum income must be $1,500 to $1,800. Minimum credit score should be 500. However, if your score is 740 or higher, they will offer you the lowest rate.

They can refinance you if your car is less than seven years old and if you pay your installments regularly. For this, your minimum loan amount need to be $7500 and the score should be at least 540.

Note

  • MIN. CREDIT SCORE – 540
  • STARTING APR – 2.99%
  • LOAN AMOUNT – ($4,000 – $50,000)
  • TERM LENGTHS – Not specified
  • MIN. ANNUAL INCOME – ($1,500 – $1,800)

Related Article: What is car loan and how does it work (A complete guide)

Carvana

Carvana is basically a used vehicle selling platform. However, they sell used cars as well as provide auto loans. You can also buy a car from them with a loan from another source.

You can see different models of used cars on their website. You can buy them at a relatively low price. There are no commissions or hidden fees.

Carvana is a big opportunity for those with poor credit. If you have bad credit, you can still finance through them. But there are few conditions. You must be 18 or older. Your annual income must be $4000 and have no active bankruptcies.

After you are prequalified, you will get 45 days to buy vehicles from them. After this period you can change your terms and conditions.

Note

  • MIN. CREDIT SCORE – Not specified
  • STARTING APR – Not specified
  • LOAN AMOUNT – Not specified
  • TERM LENGTHS – 36 to 72 months
  • MIN. ANNUAL INCOME – $4000

MyAutoLoan

This is a great marketplace for auto loan. It can also be called loan market. Here you will find many companies that want to give you a loan. This is a very effective place for customers because they do not have to worry about finding a lender. Customers will get a lot of lenders in one place.

Through this site you can buy new or old car. The interest rate on the new car is the lowest. Loan amount Starts at $ 8,000.

You will get up to 4 quotes from different lenders as opposed to a single application. To get loan you have to meet some requirements.

You must be at least 18 years old, have an annual income of at least $21,000, have a FICO score of 575 or more, buy a car with age less than 10 years or newer and 1, 25,000 miles.

Even if you have bad credit, you will get a loan but the interest rate will be higher. You can use this platform in all states except Alaska or Hawaii.

Note

  • MIN. CREDIT SCORE – 575
  • STARTING APR – 2.49%
  • LOAN AMOUNT – Starting at $8,000
  • TERM LENGTHS – 24 to 72 months
  • MIN. ANNUAL INCOME – $21,000

Bank of America

Bank of America offers competitive rates. Their auto loan is flexible enough which is tolerable to the customers.

Bank of America keeps interest rates 0.5% lower for their Preferred Rewards customers. To get this benefit you have to fulfill some conditions.

Three-month average combined balances of your qualify account must be at least $100,000.

On the other hand, you will be eligible for the lowest rate discount of 0.25%, if you can keep $20,000, the average balance of three-month combined.

Bank of America loan starts at $7,500 ($ 8,000 in Minnesota). The car you buy with this loan will not be less than $6000. The car cannot be more than 10 years old and with no more than 125,000 miles.

They set limited loan repayment terms, this term range from 12 months to 75 months.

Once your application is approved, your rate will be locked for 30 days.

Note

  • MIN. CREDIT SCORE – Not specified
  • STARTING APR – 2.59%
  • LOAN AMOUNT – Starting at $7,500
  • TERM LENGTHS – 48 to 72 months
  • MIN. ANNUAL INCOME – Not specified

Consumers Credit Union

Consumers Credit Union is an Illinois based credit union that offers various loans as well as car loans. They often offer lower interest rates than other banks. A feature of Consumers Credit Union is that consumers who open an account with them will be a part of the ownership.

Their annual percentage rate (APR) as low as 2.69%. They follow simple interest method and their loans include mechanical repair coverage.

Lowest APR is only given to those who have a very good credit score, whose loan term is 60 months or less and whose vehicles are no more than two years old and use AutoPay.

Consumers Credit Union has some benefits for their members. Members who will arrange automatic payment from CCU account for loan will be given a reduction of up to 0.50%. If a member arranges electronic automatic payments from another institution, he will get a 0.25% reduction for the new consumer loan.

But it is very hard to get CCU loan approval. You need a credit score of at least 640, minimum annual income $6000 is required and your application will go through the hard credit check.

Once your application is approved you can receive a loan an amount as low as $250 for 6 to 84 months and you will not face any prepayment penalties.

Note

  • MIN. CREDIT SCORE – 640
  • STARTING APR – 2.69%
  • LOAN AMOUNT – Starting at $250
  • TERM LENGTHS – 6 to 84 months
  • MIN. ANNUAL INCOME – $6000

LendingClub

LendingClub is famous for personal loans. They are now offering auto refinancing loans.

Their difference with other lenders is that they do not lend directly to buy a new car. If you buy a car and pay off your existing car loan, they will refinance it. This will help to reduce your interest rate and lower your monthly payment.

LendingClub charges no origination fees and APR ranges from 3.99% to 24.99%.

You will receive offers from dealers after you apply with all the details of your vehicle. But for this you have to fulfill their conditions.

You must have a credit score of at least 510, your vehicle must be for personal use only, the vehicle is no more 10 years old, under 120,000 miles on the car, and your existing auto loan must be open for at least one month, current loan amount balance should be between $5,000-$55,000, and at least 24 months of payments remaining.

Note

  • MIN. CREDIT SCORE – 510
  • STARTING APR – 3.99%
  • LOAN AMOUNT – $5,000-$55,000
  • TERM LENGTHS – at least 24 months of payments remaining
  • MIN. ANNUAL INCOME – Not specified
  • Maximum vehicle age –  10 years
  • Maximum vehicle mileage – 120,000 miles

LendingTree

LendingTree is an online platform that provides communication between dealers and customers. They work as middlemen.

The advantage of customers is that they find many dealers together on this platform so that they can easily compare the offers of the dealers. If you want, you can use loan for new or old cars, lease buyouts and refinancing.

The job of the customer is to make an application giving the details of the type of loan they want, after applying the various dealers will contact them about the loan.

Since LendingTree itself does not lend directly to customers, the loan term and APR are not specific, it will depend on the dealers. New customers who have no credit history will also be able to buy a car with a higher down payment.

Frequently asked questions about auto loans

Where can I get the lowest rate car loan?

Where you get the most comfortable car loan depends on a variety of factors. E.g.

  • Your credit score
  • Your employment history
  • Annual income etc.

So it is difficult to say where you get the lowest rate. For this you have to contact different dealers and tell them details about your financial situation. This way you can find out who will give you the lowest rate loan.

You can easily get a loan at a lower rate if you have a good credit score, employment history, good annual income and regular installment payments.

Can I Negotiate Auto Loan Rates?

Yes, of course you can negotiate. If you want, you can negotiate loan rates directly with the dealer or lender. You can reduce the loan rate by negotiating only when you are in a financially strong position. The better your financial well-being, the more you can negotiate. And those who have very good credit scores get loans at much lower rates.

Can I get a loan to buy a used car?

Yes, you can take a loan to buy a used car. But for this the lenders give different conditions which you have to accept. For example – the age of the car you buy, the mileage will depend on whether you get a car loan. However, if the car is more than 10 years old, the chances of getting a loan are very low.

From whom will it be better to take a car loan, bank or dealer?

In a word, I would say that it would be best for you to take a loan from a bank.

If you take a loan from a bank, you can save some money and time. Because the bank will give you preapproval for the loan before buying the car. The bank will give you a quote and a letter of commitment which you will take to the dealer. The bank will not charge you extra for this.

On the other hand, if you take a loan from a dealer, your interest rate may be higher and they may carry out hard pull on your credit score.  When you apply for a car loan, the dealers will take this application to different lenders. Dealers may charge higher than the lenders for their extra profit. There will be no way to know your actual rate.

However, if you buy a brand new car, many dealers will give you a car loan at a very low rate.