Best Car Loan Companies
Car dealerships provide financing, but you can often find better rates through third-party lenders. Our research team vetted 23 auto lenders that are rated by more than 5,166 consumers. Read our guide to choose the best car loan company by comparing credit score requirements, application processes and special financing options.
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Compare Top Auto Loan Companies
Read 1,295 Reviews
Offers dynamic search filters and 360-degree photos. Prequalify for financing in two minutes. Vehicle pickup and delivery options. Purchases include a 100-day/4,189-mile limited warranty and a seven-day money-back guarantee.
Read 158 Reviews
Helps people find refinancing loans and lease buyouts. Lets you add a vehicle warranty or gap insurance. Simple online application with no fees. Immediate loan decisions. Loan offers valid for 30 days. APRs as low as 2.25%.
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Read 1,553 Reviews
Online marketplace for secured and unsecured loans. Free to compare rates and quotes from lenders for mortgages, car loans, personal loans and more. Most loans require a 500 to 640 credit score. Available nationwide.
|Get Started Call Now Toll Free (800) 496-8733|
Read 13 Reviews
Auto financing comparison tool for borrowers with bad or no credit. Offers loans with $0 to $500 down. Accepts trade-ins. Network of over 1,000 dealers nationwide. Leasing and buying options. Online application.
Read 80 Reviews
Auto loan refinancing company. Connects customers with direct lenders. Personal representatives guide customers through the process. No hard credit pull until you apply with a lender. Works with a variety of credit scores.
Read 171 Reviews
Auto loan refinancing broker. Works with banks and credit unions to find the best options. No money down. Works with low credit scores. Customers can refinance a variety of vehicles. Approval can take less than a week.
|Get Started Call Now Toll Free (844) 203-5338|
Read 7,800 Reviews
DriveTime’s corporate office is located in Phoenix, Arizona with 143 dealerships nationwide. With over 500,000 vehicles sold and over 11,000 vehicles available, it helps consumers with credit issues find a reliable used vehicle.
|Call Now Toll Free (888) 418-1212|
Read 40 Reviews
Credit union that offers traditional services and auto loans and refinancing. Fill out the online application to get approved. No prepayment penalties. Loan terms up to 84 months. Calculate your vehicle payments online.
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Read 110 Reviews
Provides auto financing to buyers through Lexus Financial Services. Purchase or lease a new or used Lexus from a Lexus dealer. Apply for credit online. A division of Toyota Motor Insurance Services.
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Read 57 Reviews
Offers auto financing through dealerships across the country. Lending division of Citizens Bank. Doesn’t offer financing directly to consumers. No preapproval or online applications.
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Our top picks for car lenders
We chose our top picks car lenders by comparing possible loan amounts, credit score requirements and overall loan experience. In order to be chosen for a feature, the loan company had to offer the specified services and provide transparent information about its lending processes on its website or through its customer service department. All information is accurate as of publishing.
Our pick for bank car lenders
Why we like Bank of America’s car loans: Bank of America is a nationwide lender that offers in-person and online services, making it a solid option for both kinds of shoppers. Its car loans are ideal for new and used car purchases, and it has specialized financing options for small business vehicles.
Our pick for credit union car lender
Why we like PenFed Credit Union’s car loans: Pentagon Federal Credit Union, also known as PenFed, has financing for new and used cars as well as a car buying service powered by TrueCar. Its online car loan rate calculator gives you an estimate of your monthly payments based on your vehicle’s purchase price, down payment amount, loan term and interest rate. PenFed also offers great add-ons for car buyers, including an extended warranty program and gap protection for qualifying car purchases.
Our pick for used car purchases
Why we like Carvana’s car loans: Carvana combines used car lending and purchasing on its website, which lets you shop and finance your vehicle on one platform. Carvana has an efficient tool that lets you calculate how much car you can afford and determine what your monthly car payments will be based on your desired loan amount.
Our pick for fully online experience
Why we like LightStream’s car loans: LightStream markets its online car loan process as simple and quick. Some borrowers are eligible for same-day loan funding. LightStream offers loans from as low as $5,000 up to $100,000, making it a solid option for borrowers with a variety of needs. LightStream also has a “Lending Uncomplicated” program that simplifies the lending process and lets you apply from your smartphone or tablet. Borrowing $10,000 at 4.94% APR with a term of five years would result in 60 monthly payments of $188.44
Our pick for comparing multiple car loans
Why we like LendingTree’s car loans: LendingTree’s online loan marketplace lets you compare car loan rates from multiple lenders. Fill out its online form, and you’ll be matched with up to five lenders. Its service is completely free for borrowers, making it a great and easy tool to compare rates and fees.
Our pick for bad credit
Why we like Auto Credit Express: If you have a less-than-ideal credit history, Auto Credit Express may be the right lending platform for you. It specializes in helping consumers with bad credit find car loans by working with dealerships nationwide that provide special financing options. Auto Credit Express walks you through the bad credit loan application process and provides resources to help you improve your credit score.
How to get a car loan
Getting a car loan is similar to other lending processes. While comparing car loan companies can seem overwhelming, finding a lender who offers competitive rates and terms saves you money over the course of your loan.
1. Determine how much you can afford
Before searching for financing, it’s important to determine how much car you can afford. The right car loan amount for you varies based on the stage of life you’re in, your financial situation and how large of a down payment you can make. Take some time to examine your current financial responsibilities. If you’re repaying student debts or making other loan payments, borrowing a smaller amount with a shorter loan term and lower interest rate may be the right choice for you.
2. Check your credit score
Your credit score is a significant factor in determining your rates for a car loan. You can check your credit score by using a variety of online credit reporting services, and many credit card providers have free credit score monitoring services. Also, everyone is allowed one free copy of their credit report each year, which gives an in-depth look at what’s on your credit report but does not provide a credit score.
Generally, consumers with high credit scores tend to receive lower car loan rates and better terms from auto lenders, while consumers with lower credit scores can have a difficult time finding a lender that offers affordable payment options. While buying a car with bad credit is possible, we recommend taking time to improve your credit score before purchasing a vehicle if you can.
3. Compare rates from multiple auto lenders
With so many car lenders out there, researching and comparing rates can seem like an overwhelming task. Start by applying for a car loan from each of the four types of lenders (banks, credit unions, online lenders and dealership financers) and comparing available interest rates and loan terms. Even if you plan to use a specific lender, it’s worth it to apply with multiple auto loan companies so you can negotiate your car loan rate with your preferred lender.
Types of car loans
There are a few different types of car loans available. Read about the available loan types below to see which one is right for you.
- Secured auto loans: Most auto loans are secured loans that use the car being purchased as collateral. Secured auto loans tend to have lower interest rates, but the lender can take possession of the vehicle or property you put up as collateral if you stop making payments.
- Unsecured auto loans: Unsecured loans don’t involve collateral. Given the risk involved, these loans normally have higher interest rates than secured auto loans and require a good credit score.
- Precomputed interest loans: Precomputed interest loans have precalculated interest and principals that are determined before a borrower and lender agree and sign the financial paperwork.
- Simple interest loans: Most car loans are simple interest loans. These loans use the amount you owe at the time of payment to determine how much interest your lender charges.
- Lease buyout loans: A lease buyout loan is an option for borrowers that are unable to buy out the remaining amount on their car lease. A commercial lender will pay out the remainder of the balance on their lease, and the borrower will need to make regular payments to the lender.
- Car refinance loans: Car refinancing is a great option for car owners who want a lower interest rate on an existing car loan. If you’ve recently raised your credit score, refinancing can be a great way to lower your monthly car payments.
Car loan requirements
Before committing to work with a car lender, be sure you're familiar with the company’s lending requirements. Lending requirements differ depending on the auto financing company you choose to work with but can include:
- Minimum loan amount
- Minimum income amount
- Minimum down payment percentage
- Minimum credit score
If you’re currently working with a car lender, be sure to ask about the requirements above in order to avoid any extra fees or charges.
Auto loan rates
Auto loan rates vary depending on a few factors, including income and desired loan amount, but one of the most important factors in determining your car loan rate is your credit score.
Know the terms of the car loan
Before you dive into the financing process, take some time to familiarize yourself with the language used in car lending.
- Annual percentage rate (APR): Loan companies offer different annual percentage rates based on an applicant's credit history, financial background and other factors. The lower your APR, the less you’ll pay over the life of the loan.
- Monthly payments: Your monthly payment is the amount you’ll be billed each month. Generally, if your monthly payment is higher, you’ll be able to pay off your car loan quicker.
- Short-term auto loans: Companies that offer short-term auto loans give customers a maximum amount of weeks in which they can pay the loan. They often do not have fixed dates for repayment installments, simply a date by which the total must be repaid.
- Total cost: The total cost of a vehicle is calculated by knowing the loan amount, interest rate and length. A common mistake with car loans is to focus on the monthly cost of the car payment and lose sight of the overall total cost of the loan. Make sure you know the total you are willing to pay for the car before you focus on monthly rates.
Where to get a car loan
Many different loan providers offer car loans, and you may need to do some research to discover which is best for you. Be sure to apply for loans at a few different types of lenders to understand what each type is willing to offer.
Many banks and large financial institutions double as lenders and have specialists that work on auto loans. Instead of working with other lending institutions, these companies typically supply the loan money themselves.
Some companies partner with dealerships directly to connect with consumers, check lenders’ credit histories and set them up with a new or used car and a special loan repayment schedule. These companies are different from lenders that actually offer the loan money and approve it themselves — they work with dealerships to help consumers get approved for the loan through the dealership.
Poor credit specialists
Many auto loan companies specialize in working with customers with poor credit or those who have just gone through a bankruptcy. These companies can often help negotiate loans and secure better terms than if borrowers go directly through a car dealership.
Many auto loan companies work with other lenders to refinance those lenders' existing loans. Refinancers can usually offer lower fees and better terms. Depending on where you live, it is a good idea to find an auto loan that has rates that are both locally competitive and nationally competitive.
Credit unions only lend money to their members. They are nonprofit organizations, so they often have very competitive lending rates. It’s always an advantage to have a personal relationship and history of being part of the credit union.
Manufacturers may have their own credit companies or relationships with banks that can offer better rates. Make sure to compare all offers before choosing one.
Auto loans FAQ
- What is a good APR for a car loan?
- Interest rates and APRs on car loans vary based on your desired loan amount, credit score and income. For someone with excellent credit, a good APR on a new car is around 3.65% or lower, depending on the lender. APRs for used cars may be closer to 4%, though.
- Is it better to finance a car through a bank or dealership?
Bank and dealership financing have their own advantages and disadvantages. If you’re buying a new car and have great credit, dealerships sometimes offer 0% annual percentage rate (APR) loans. However, getting preapproved by a bank or financial institution has several advantages, including:
- Letting you shop around for the best APR
- Providing more flexibility for people with bad credit
- Giving you leverage when negotiating the price of your car
- Is a 72-month car loan bad?
While a lower monthly payment is tempting, we don’t recommend 72-month car loans because they:
- Dramatically increase the overall cost of your loan
- Quickly put you in a position where you owe more than the car is worth
- Often leave consumers trading in their cars with negative equity
- How can I get an auto loan with poor credit?
If you need to buy a car with bad credit, consider:
- Finding a co-signer
- Shopping around for preapproved loans
- Improving your credit
- Saving to make a more substantial down payment
- Can you apply for auto loans online?
- Yes, many banks and financing companies let you apply online, and looking for online lenders lets you find more options than what’s available in your local area. Having more choices is useful if you have bad credit.
- How do you buy a car from a private seller?
When buying a car from a private seller, you’ll generally need to pay the full price of the car upfront (though this money can still be obtained through a bank or credit union loan). Be sure to have the seller or their lender sign the title over to you. You’ll also need to register the car in your name.
To register the car, you may need to provide documentation, such as the title and a bill of sale, and pay taxes and fees to your state government.
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Car loan company reviews
RoadLoans offers loans on new and used cars from dealers, as well as purchases from individuals. The company also offers cash-back refinancing options and specialize in providing great rates for customers with poor credit history. This online financing company works with online sales and offers pre-approved auto financing.
Chase is one of the leading providers of auto loans in the country. They provide loans at competitive interest rates for a variety of automobile purchases.
Auto Credit Express offers loans and dealer connections, and it caters particularly to borrowers with bad credit. The company works in both the U.S. and Canada. They also have special financing programs for people with credit problems.
- Easy application: Auto Credit Express makes it super easy to apply for loans on the phone or online, and they process thousands of applications each day. Customers can use their simple online portal to provide income, credit history and background information to receive a decision almost immediately. The application is easy and takes 3 minutes.
- Large network: The company works with numerous dealerships across the country and partner with1224 active dealers nationwide.
- Credit repair: In addition to approving loans for borrowers with bad credit, they also try to help their customers repair their credit by setting up realistic opportunities for auto loan approvals.
- Military financing: They have a special military auto loan that can help active duty and retired military members get auto financing.
- Low APR: They feature low annual interest rates in order to make sure that customers don't end up paying large amounts of interest and creating more financial burden for themselves.
Wells Fargo is one of the most widely recognized names in the finance and lending world. They have been in business for over 20 years and have a large, nationwide team.
Capital One Bank is a well-known financial institution that provides auto loans and financing for new and used cars. The company was founded in Richmond, VA in 1988.
USAA Auto Circle Program is known financial institution that provides auto loans and financing for new and used cars. They are a bank and insurance company. They were founded in 1922, in San Antonio, Texas, when 25 Army officers come together and decide to insure each other's automobiles. USAA provides a full range of highly competitive financial products and services to the military community and their families. And our world-class employees are personally committed to delivering excellent service and great guidance,
- Low rates: USAA can provide low rates with no hidden fees. No prepayment penalties, no application fees, no hidden closing costs and no payments for up to 60 days.
- Apply online: Apply online in as little as 5 minutes. In most cases, you'll get your decision instantly. You can E-sign your approved loan immediately. They can even store your documents online for 24/7 access. You must be a member of USAA. Open to all branches of the military and their families who are currently enlisted or retired from all ranks.
- Resources: The Auto Circle program offer research information and a car buying service.
- Variety of loan options: The company provides a huge range of auto loan options, whether buyers are purchasing used vehicles, new vehicles or refinancing.
Founded in 1935, Pentagon Federal Credit Union (PenFed) is an American financial institution that operates in all fifty states and some international military bases. Along with other financial services, PenFed members can apply for new and used auto loans, auto refinancing, auto buying service, and Payment Saver loans for new and used vehicles.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.
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