Guide to Getting the Best Auto Loans

the Best Auto Loan

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I remembered the time when I first bought a car. It was a 1996 Volkswagen Jetta (used one though) for just $550. what more can you ask from a highschooler, I could not drive a stick so never registered it but still at that time a brand new car could cost somewhere between $25000-$28000.

If I were to ask you to guess the average new car price is nowadays, what would you say? According to Experian, the average car price now tops over $35,000! Holy moly that’s ridiculous. It’s practically impossible for anyone to buy a car plainly from cash unless you can pay for the entire purchase price. So, the only way left is to borrow and pay off your vehicle with monthly payments. In short auto loans are what we pretty much we need.

Now if you are a first timer it is important for you to follow the basic steps in getting an auto loan.

Let me break this down for you. There are 3 factors to consider when getting an auto loan – interest rate, credit score and terms (number of months in which you pay your loan). Of course, many other factors come into play as well like some special days which gives discount offer like memorial day or labor day, or if you decided to go for banks or car dealer or just by going online. But if you were to look in a broadway those 3 things are what comes down in deciding the auto loan which is best for you.

Competition is high for an auto loan be it online or offline. To help you get the best of both worlds I am listing down the auto loan according to 3 criteria.

  1. Online Auto Loan Services
  2. Banks for Auto Loan Services
  3.  Auto loan for Bad credit.

1. Best Online Auto Loan Services

MyAutoLoan

My auto loan is the brokage which connects you with multiple dealer and financial institution. It is ideal for those who are first time buyer. On the basis of your area, credit score, loan amount you could get extremely helpful information. Also beneficial for those who need beyond a straightforward loan, For example, you can refinance an existing loan.

Rate– 2.19%-24.99%   Terms -24-72 months   Min. Credit Score-500

The good

  1. You can be pre-approved the same day you apply for a loan.
  2. No application fees.

The bad

  1. Your minimum monthly income must be $1,800.
  2. You must apply for a minimum of $8,000.

CarsDirect

CarsDirect is a car buying service where you can search and compare. It holds tons of information, unlike its competitor which includes loan calculator, trade-in-value calculator, and dozens of articles about car loans and buying strategies. You can find a perfect match for your loan regardless of the amount as it provides multiple lenders.

Rate– Varies   Terms -Varies   Min. Credit Score– Accept all scores

The good

  1. Accept all credit type.
  2. No Minimum loan amount required.

The bad

  1. Your information is shared with multiple lenders.
  2. Numerous calls and emails from lenders even after making your selection.

LendingTree

If you are looking for a multipurpose place which can provide a place to compare – car loan, auto refinances, RV loan, motorcycle loan, then look out for LendingTree.

Using its auto loan calculator, one will be able to determine their monthly payment. Since it is a marketplace, you will be able to compare different loan at once.

Rate– For new – 3.99% For used – 3.19%   Terms -18 – 84 months   Min. Credit Score– Accept all scores

The good

  1. Multiple auto loan type.
  2. Various financing type and multiple lenders to choose from.

The bad

  1. Your information is shared with multiple lenders.
  2. Numerous call and emails from lenders even after making your selection.

2. Best Banks For Auto Loan Services

Bank Of America

The best thing about the banks are even if you lack in the online department you can always show up at the bank and bank of America has plenty of branches all around the nation. They are also eligible for interest rate reduction. One of the best things about this bank is that it allows a 30-day rate lock so you can shop without stressing about increasing interest rate.

Rate– As low as 2.84%   Terms -12-60 months   Min. Credit Score-580

The good

  1. No minimum annual income required.
  2. No application fees.

The bad

  1. Down payment may be required for certain applicants.
  2. Will not finance purchases from independent dealers.

LightStream

Lightstream is not exactly a bank but you could say it is the online arm of SunTrust Bank, which offers secured and unsecured loans for almost any purpose. It is good for car buyers with good or excellent credit score and gives almost every car loan offer. There is also a $100  scheme for the unsatisfied customer within the first 30 days. But major turnoff is that it is very peculiar in selecting its customer.

Rate– 3.09%-9.54%   Terms -24-84 months   Min. Credit Score– 660

The good

  1. Fast loan processing.
  2. Excellent option for good credit.

The bad

  1. Minute credit problem could disqualify you.
  2. You’ll likely need to show a very healthy income and assets to be approved.

3. Best Auto Loan for Bad Credit

Auto Credit Express

For car buyers having a poor or bad credit, auto credit express is your go-to loan services even for those who have declared bankruptcy. You can even qualify for $0 or low down payment amount. But still, you need to meet the basic requirement of having a minimum annual income of $18,000. The company has an A+ from the Better Business Bureau.

Rate– Varies   Terms -36-72 months   Min. Credit Score– Accept poor or bad score

The good

  1. No restrictions based on loan amount, vehicle age, or mileage.
  2. Best for Poor credit score.

The bad

  1. You won’t get a loan to purchase from a private seller.

Capital One

Capital one is the largest lender who is willing to accept customer having a fair or poor credit score. But it only provides loan for new or used cars. For lease buyout and refinance you will have to look somewhere else. It has an extensive arm in the mid-Atlantic and southern state if you are keen on meeting personally. It only offers a particular band of loan amount so luxury or cheap purchases are out of option.

Rate– Starts at 2.49%   Terms –max 60 months   Min. Credit Score– Accept fair to poor score

The good

  1. Allow loans for vehicles which are at max 10 years old and have 125.000 miles.
  2. Best for fair to poor credit.

The bad

  1. Loan amount ranges from $4,000-$40,000.
  2. Won’t make loans for private-seller transactions.

Final Thoughts

Now that you have come across some of the best auto loans, before you start exploring them sit down and weigh all of your options, wait for some time to see changes in APR rates as they tend to move rapidly but don’t wait too long, chances are you might lose an enticing option.

Chose your option very careful as it is going to impact your finances in the next coming years. Each loan offers a different timeline, different rates and requirements. So set a timeframe to search and compare different offers. And always remember in case of an auto loan knowledge is your best friend.

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