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Written by Amanda Push | Edited by Katie Lowery and Pearly Huang | Updated January 2, 2024
| Lenders | Best for… | Starting APRs | Loan terms | Loan amounts | |
|---|---|---|---|---|---|
 | Short-term loans | 4.50% | 12-84 months | From $12,000 | View Personalized Offers |
 | Those with military connections | 4.54% | 36-96 months | Not specified | View Personalized Offers |
 | Using a car-buying service | 5.24% | 36-84 months | Up to $150,000 | View Personalized Offers |
 | Those who prefer large banks | 5.89% | 48-72 months | From $7,500 | View Personalized Offers |
 | Prime and subprime rates | 6.49% | 36-72 months | From $4,000 | View Personalized Offers |
 | Private-party auto loans | 6.69% (with autopay) | 12-84 months | $7,500-$75,000 | View Personalized Offers |
 | Used car loans | 6.74% | Up to 84 months | Up to $500,000 | View Personalized Offers |
 | An online experience | 6.85% | 36 to 78 months | Starting at $1,000 | View Personalized Offers |
 | Bad-credit borrowers | 7.90% | Not specified | Not specified | View Personalized Offers |
 | Unsecured auto loans | 7.49% (with autopay and excellent credit) | 24-84 months | $5,000-$100,000 | View Personalized Offers |
 | Dealership purchases | Not specified | 12-84 months | Starting at $4,000 | View Personalized Offers |
When you’re financing a car, you want to find the best auto loan rates available to save money. We compared options and found the 11 lenders offering the lowest rates and best auto loans.
| Starting APR | 4.50% |
| Loan amounts | Minimum of $12,000 for 72- and 84-month terms |
| Loan terms | 12-84 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Offers a Skip-A-Payment program Offers joint auto loans Short-term loans available | Unclear credit requirements Must be a member to receive loan funds Not many brick-and-mortar branches |
Southeast Financial Credit Union (SFCU) isn’t the largest credit union on our list but it does offer the lowest APRs, starting at just 4.50%. In general, credit unions tend to offer the lowest rates on auto loans. This credit union also offers repayment terms as low as 12 months, while other lenders have much longer minimum terms.
Because Southeast Financial is a smaller credit union, it doesn’t offer many brick-and-mortar locations for in-person transactions. In fact, the only branch locations available are in central Tennessee. SFCU also doesn’t provide much clarity around its credit requirements.
All Southeast Financial members must open a savings account with the credit union and deposit at least $5. To become a member, you must meet one of the following requirements:
| Starting APR | 4.54% |
| Loan amounts | Not specified |
| Loan terms | 36-96 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Discounts for both active and retired military members Low starting APR Preapproval offer good for 90 days | Membership restricted to those with military ties Doesn’t disclose available loan amounts No insight into credit requirements |
Navy Federal Credit Union specifically caters its auto loans to those with military connections. Senior enlisted military members (active-duty, National Guard and reserves E-7 through E-9) may be eligible to receive a 1% APR discount, while all other active-duty and retired military members may qualify for a 0.25% APR discount.
Navy Federal Credit Union doesn’t publish a minimum credit score requirement, so it’s unclear if applicants with bad credit can qualify. It also doesn’t provide a range of loan amounts.
To get a Navy Federal Credit Union auto loan, you’ll need to meet one of the following qualifications:
| Starting APR | 5.24% |
| Loan amounts | Up to $150,000 |
| Loan terms | 36-84 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Offers a car-buying service Anyone can become a member Members qualify for cash-back offers | Must be a member to receive loan funds Unclear eligibility requirements Car-buying service not available in Puerto Rico |
PenFed Credit Union offers attractive auto loan rates, but this lender also provides a car-buying service to its members. While you don’t need to be a member to apply for a loan, you’ll need to be a member to be approved for a loan.
Membership requirements for the credit union are easy to meet, and you can request to join by creating a PenFed Credit Union savings account with a $5 deposit. Longer loan terms come with higher starting APRs, so expect to pay a little more if you want a longer loan.
| Starting APR | 5.89% |
| Loan amounts | From $7,500 |
| Loan terms | 48-72 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Offered in all 50 states Various types of loans available, including lease buyouts May receive approval in 60 seconds | High minimum loan amount Rate discounts limited to Preferred Rewards members Financing not offered for cars purchased at independent dealerships |
Bank of America is the second-largest commercial bank in the U.S. and offers auto loans in all 50 states. This accessibility offers benefits like long customer service hours and a variety of types of loans. If you are a Preferred Rewards member, you could qualify for an interest rate discount up to 0.50%.
Unfortunately, this lender doesn’t work with many independent dealerships — only CarMax, Enterprise Car Sales and Carvana. Bank of America’s minimum loan amount is relatively high at $7,500, so if you’re buying a cheaper car, you’ll need to look elsewhere for financing.
Bank of America doesn’t provide much information about its loan eligibility requirements for applicants, but your car must fit the following criteria:
| Starting APR | 6.49% |
| Loan amounts | From $4,000 |
| Loan terms | 36-72 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Competitive rates for all eligible borrowers 24/7 access to customer service Option to use a co-applicant Financing available at over 12,000 dealerships | Financing only available through partner dealerships No option for autopay discount Doesn’t refinance its own loans |
Capital One offers competitive rates on both ends of the credit spectrum, to both prime and subprime borrowers. While it doesn’t specify a minimum credit score requirement, it does allow you to finance an auto loan as small as $4,000.
Its Auto Navigator feature can give a ballpark estimate of your auto loan without requiring a hard credit pull. If you want a more solid idea before you visit the dealership, consider getting preapproved. Keep in mind that Capital One auto financing may not be available at the dealership you want. It only offers car loans for vehicles purchased through its network of over 12,000 dealerships.
| Starting APR | 6.69% with autopay |
| Loan amounts | $7,500-$75,000 |
| Loan terms | 12-84 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Financing options for private-party sales Flexible loan term options 0.25% autopay discount Option to get short-term loans | High minimum loan amount Unclear eligibility requirements May need to visit a PNC branch to finalize the loan |
PNC Bank offers a wide variety of options when it comes to purchasing a car, including private-party financing and lease buyout loans. You can also finance your car for as few as 12 months and get a 0.25% rate discount by signing up for autopay.
Unfortunately, this lender doesn’t offer much insight into its loan requirements, which may make it difficult for consumers to decide whether it’s worth applying. It also has a high minimum loan amount, so you may have to shop elsewhere if you need to finance a cheaper car.
A class action lawsuit was filed against PNC Bank in mid-2023 alleging the bank hasn’t provided car titles or released liens to customers who’ve paid off their loans.
| Starting APR | 6.74% |
| Loan amounts | Up to $500,000 |
| Loan terms | Up to 84 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Used and new loan APRs are the same (while many other lenders charge higher APRs for used) Offers financing for specialty cars No initial payment for 60 days Can finance up to 130% of the car’s value or purchase price | May have to pay an administrative fee to refinance a DCU loan Credit union membership is required Submitting loan application involves hard credit pull |
While many lenders charge higher car loan rates for used vehicles, Digital Federal Credit Union (DCU) charges the same rates for both new and used auto loans. The lender also offers financing for specialty vehicles like antique cars (though expect to pay a higher rate for this category of cars).
To get a DCU auto loan, you’ll have to become a member of the credit union. If, down the road, you want to refinance your DCU loan, you may have to pay an administrative fee.
To become a DCU member, you must fall into one of the following categories:
| Starting APR | 6.85% |
| Loan amounts | Starting at $1,000 |
| Loan terms | 36 to 78 months |
| Min. credit score | None |
| Pros | Cons |
|---|---|
Fully online experience Offers loans to applicants with bad credit scores Seven-day return policy Financing offer valid for 30 days | Loans limited to cars purchased through Carvana High delivery and shipping fees Can’t negotiate car prices |
Carvana is a car dealership that provides financing for its cars, but the experience is completely online. Its no-haggle, car-buying experience could take some of the stress out of the process, but you may end up paying more for a car than you would at a traditional dealership.
Carvana doesn’t have a minimum credit score requirement and works with borrowers of nearly all credit profiles. However, you cannot use a Carvana loan offer to purchase a vehicle from another seller.
Carvana has a history in recent years of customer complaints and legal actions related to delays of transferring car titles and registrations in many states. If you’re considering a Carvana purchase, follow along with the process using our used car buying checklist.
Carvana doesn’t have many eligibility requirements, but you’ll have to meet the following criteria if you want to finance a car through Carvana:
| Starting APR | 7.90% |
| Loan amounts | Not specified |
| Loan terms | Not specified |
| Minimum credit score | Not specified |
| Pros | Cons |
|---|---|
| May approve you even if you've declared bankruptcy Accepts borrowers with no credit Fast approval decisions | Lends to bad-credit borrowers, but does not disclose minimum credit score No co-signers Does not publish customer service hours |
| Starting APR | 7.49% with autopay and excellent credit |
| Loan amounts | $5,000-$100,000 |
| Loan terms | 24-84 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Same-day funding Doesn't require collateral Offers 0.50% APR autopay discount | Doesn't offer preapprovals Bad credit borrowers won't qualify Higher starting APR |
Unlike some lenders, LightStream offers unsecured auto loans, meaning your car won’t serve as collateral for your loan. This lender places no restrictions on the age, mileage, make or model of the vehicle you finance. LightStream also does not require down payments.
Unfortunately, LightStream doesn’t offer preapprovals, so you’ll have to submit to a hard credit pull to see your potential rates. Bad credit borrowers may not qualify, while those with good-to-excellent credit may find lower rates elsewhere.
LightStream doesn’t publish many specific details about its borrower requirements. However, it does state that it looks for borrowers with good-to-excellent credit scores. It also closely examines applicants’ credit backgrounds, payment history, assets and debt-to-income ratios.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 5.99% APR with a term of 3 years would result in 36 monthly payments of $304.17. © 2023 Truist Financial Corporation. Truist, LightStream and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
| Starting APR | Not disclosed |
| Loan amounts | Starting at $4,000 |
| Loan terms | 12-84 months |
| Min. credit score | Not specified |
| Pros | Cons |
|---|---|
Available at dealerships nationwide Flexible repayment terms Quick approval timeline Down payment not required | Loans limited to partner dealerships Doesn't refinance auto loans Doesn't publish APRs |
Chase Bank only offers auto loans at over 2,000 dealerships nationwide, so if you’re purchasing a car from a private party, you’ll need to apply to a different lender. This lender also provides 100% financing so a down payment may not be required, depending on your credit.
Consumers should keep in mind, however, that Chase doesn’t publish its APRs or provide clear guidelines on how to qualify for a loan. It also doesn’t offer refinancing — a service that other lenders provide — and loans are exclusive to Chase’s partner dealerships.
Not only does Chase Bank not disclose its APRs, it also doesn’t make its auto loan borrower requirements clear. Your vehicle, however, will need to meet the following criteria:
An auto loan is a type of loan typically secured by collateral — the vehicle you purchase — though some lenders offer unsecured auto loans. Auto loans can be used to buy new or used cars, refinance a current loan, buyout a lease or purchase recreational and powersport vehicles.
Auto loan lenders typically have repayment terms ranging from 36 to 84 months, though some may offer shorter or longer term limits. Keep in mind that if you default on your loan, your lender may repossess your car and your credit score will suffer.
With an auto loan, you agree to repay a lender over a set term, typically three to six years, in exchange for them paying a dealership (or a private seller) so that you can get a car. By paying interest, your total cost of borrowing is higher than the purchase price of your car, which equates to profit for the lender. How much more you pay in interest will largely depend on your credit score.
The interest rate on an auto loan is the percentage of the loan amount that you pay to the lender each year. It is the cost of borrowing money. The APR, or annual percentage rate, is also a percentage, but it includes the interest rate as well as other fees associated with the loan, such as origination fees and prepayment penalties. The APR is a better measure of the true cost of borrowing money than the interest rate alone, because it takes into account all of the fees that you will pay.
Every lender has its own approach to auto financing, but applying for a car loan commonly includes the following steps:
Having a good credit score plays a big role in receiving a lender’s best APR on a car loan. According to Experian, during Q3 2023, those with the highest credit scores were offered an average APR of 5.61% for new cars and 7.43% for used. However, those with the lowest credit scores were offered average APRs of 14.18% for new cars and 21.18% for used.
Yes, you can negotiate APR. Ask the dealer to beat the auto loan preapproval rate you got directly from an auto lender. Offering a larger down payment or getting a car loan cosigner could also help reduce the APR on your loan.
The average APR for an auto loan in the first half of 2023 was 6.58% for new cars and 11.17% for used cars. To receive a lower APR than the industry average, you’ll need a credit score of at least 781 for new cars and 661 for used cars.
Automakers, credit unions, banks and online lenders could all potentially provide a low rate, but credit unions tend to offer the lowest rates. Rate shopping for auto loans within a two-week window will not hurt your credit score any more than applying to one lender. Any drop to your credit score from a credit inquiry should be slight and temporary.
While car dealerships can offer turnkey services, they also tend to charge higher rates than banks and credit unions. If you want lower rates, consider getting preapproved with an independent lender before applying for a loan at a dealership. Then you can compare the two and choose the least expensive option.
As long as you make your monthly payments on time, car financing can help to build your credit and improve your score. Keep in mind, however, auto loans can affect your credit score negatively, too, since your lender will run a hard credit pull.
December tends to be the best time of year to buy a car because of MSRP discounts. Typically, newer models are introduced toward the end of the year, so dealers may be more likely to offer discounts on older models. July to October tends to be the worst time to purchase a car.
