Best Auto Loans Rates of 2021

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Updated: 27th Jul 2021
Written by Kim Pinnelli
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Auto loans are a necessity for most people, especially if you’re buying a new car. Before you take the first loan that comes your way, know how to find the best auto loan rates to ensure you get the best deal available to you.

This list of the best auto loan rates includes traditional loan originators and various auto loan marketplaces that allow consumers to compare quotes.

Comparing auto loan rates (side-by-side) will help you pick the best offer, will save you time, and is the most advantageous for consumers.

Best Car Loan Rates

  • Best for Refinance: MotoRefi
  • Best for Comparing Auto Loan Rates: myAutoloan
  • Best for Bad Credit Auto Loan Rates: Auto Credit Express
  • Best for Online Auto Loan: LightStream
  • Best for Quick Approval: MaxCarLoan
  • Best for Lowest Auto Loan Rates: PenFed Credit Union (Membership Required)
  • Best Credit Union Auto Loan: Consumers Credit Union
  • Best for Online Experience: Carvana
  • Best for Refinancing: OpenRoad Lending
  • Best for Comparing Auto Loan Rates: LendingTree
  • Best for Shopping Around: LendingClub
  • Best for Bad Credit or No Credit Auto Loans: Car.Loan.Com
  • Best for Bad Credit Auto Loan Rates: Oportun
  • Best for Shopping Around: Vroom

Best Auto Loan Rates

#1. MotoRefi

MotoRefie Auto Loan Rates
  • APR Range: MotoRefi doesn’t explicitly state the average rate, but they advertise rates as low as 1.49% on their website.
  • Minimum Credit Score: 650
  • Loan Amount: $5,000 – $60,000

Pros:

  • Best for Auto Loan Refinancing. Compare quotes in a matter of minutes.
  • Preview Pre-Qualified Auto Loan Rates without impacting your credit score.
  • A Customer Representative will help you throughout the entire process.
  • A Rating from the Better Business Bureau
  • Transparent Pricing, Process, & Fees

Cons:

  • Primarily Focuses on Auto Loan Refinancing
  • Consumers Need a Decent Credit Score to Utilize the MotoRefi Service to its full advantage. However, the process is quick, easy, & transparent.

Overview:

MotoRefi is redefining the way consumers refinance auto loans. They have created the easiest process for consumers to refinance auto loans, shop around for new rates, and avoid bad car loan deals.

So, if you are on the market to refinance your auto loan, then MotoRefi is truly the only place we would recommend for you to go. It is important to note that MotoRefi is an auto loan refinance marketplace. This means they will help you comparison shop.

Simply fill out the form, and they will work with their network of Auto Loan Refinance Lenders to provide you with tailored (low) auto loan refinance rates.

>> Learn More: MotoRefi Review

#2. myAutoloan.com

myAutoLoan best Auto Loan Rates
  • APR Range: 2.49% – 29.40%
  • Minimum Credit Score: 575
  • Loan Amount: $8,000 – $99,000

Pros:

  • Complete one application and receive up to 4 offers
  • MyAutoLoan.com offers loans for new cars, used cars, and car loan refinancing
  • You don’t need perfect credit to get approved

Cons:

  • Borrowers must have a minimum annual income of $21,000
  • Borrowers must be at least 18 years old
  • High minimum loan amount requirement of $8,000

Overview

MyAutoLoan.com is an auto loan lender marketplace. They don’t underwrite or fund loans but instead bring together borrowers and lenders in one place.

You complete one application and receive up to 4 offers from different lenders. There’s no obligation to use any of the lenders, and there’s no charge to use MyAutoLoan.com.

If you choose a lender and move forward, you’ll work directly with the lender itself to finalize the loan details.

>> Learn More: myAutoLoan Car Loans Review

#3. Auto Credit Express

  • APR Range: Auto Credit Express doesn’t state the average rate, but subprime loans start around 10% – 13% and higher
  • Minimum Credit Score: 500
  • Loan Amount: Varies by lender

Pros:

  • Many options for subprime lending, including loans for borrowers in bankruptcy or repossession
  • Low down payment requirements (some as low as $1,000 or 10% of the vehicle price, whichever is less)
  • You’re assigned a case manager who helps match you with the right loan
  • You’ll know within 24 hours if you’re approved for a loan

Cons:

  • The APRs can be high on subprime loans
  • You must have a monthly income of at least $1,500
  • You may be restricted to buying from one of the dealerships in their network

Overview

Auto Credit Express caters to borrowers with less than perfect credit and even helps borrowers in the middle of a bankruptcy or repossession get approved.

The professionals at Auto Credit Express provide a custom-tailored solution to determine which loan option works for you and helps you get matched (and approved) with one of their 1,200 lenders or dealers.

>> Learn More: Auto Credit Express Review

#4. LightStream

LightStream Best Auto Loan Rates
  • APR Range: 4.99% – 10.39% (0.5% discount for auto pay)
  • Minimum Credit Score: 660
  • Loan Amount: $5,000 – $100,000

Pros:

  • Offers secured and unsecured car loans (only for those with excellent credit)
  • You’ll receive an answer on your application within hours
  • LightStream has no restrictions on vehicle type or year
  • No down payment requirements (you can borrow 100% of the vehicle’s price)

Cons:

  • Excellent credit required to secure their lowest interest rates
  • LightStream doesn’t offer pre-approvals
  • LightStream is a direct lender, if you don’t meet their requirements, there aren’t any other options with them

Overview

LightStream is the online lending branch of SunTrust Bank. The entire loan process occurs online. You choose the funding date (upon approval), and LightStream deposits the funds in your account, making you a cash buyer at the dealer.

LightStream offers various loan options for new and used car purchases, car loan refinancing, and buyouts. If you have excellent credit, you may even get an unsecured car loan.

>> Learn More: LightStream Auto Loans Review

#5. MaxCarLoan

  • APR Range: APRs vary by lender. Since MaxCarLoan works with borrowers with great and not so great credit, the APR range is big
  • Minimum Credit Score: Works with borrowers with all types of credit
  • Loan Amount: Varies by lender

Pros:

  • Multiple opportunities to get approved for a loan with many lenders
  • You don’t need perfect or even good credit
  • Complete one application and have multiple offers to compare
  • Provides a pre-approval for easier price negotiating at the dealership

Cons:

  • MaxCarLoan isn’t transparent about the APR range its lenders offer
  • MaxCarLoan isn’t a direct lender, once you choose a lender, you switch gears and work with them
  • You may have to work with a specific dealer if you have bad credit, and MaxCarLoan matches you with a dealer

Overview

MaxCarLoan is another free online auto loan marketplace that matches borrowers with lenders. They specialize in borrowers with less than perfect credit and help you apply with multiple lenders with one application.

The application process itself takes 5 minutes, and there’s no obligation to take the loan you’re offered. If you accept it, you can access your pre-approval from any device, giving you more negotiating power when you walk into a dealership.

#6. PenFed Credit Union

PenFed Auto Loan Rates
  • APR Range: 0.99% – 4.54%
  • Minimum Credit Score: Requires excellent credit
  • Loan Amount: $500 – $100,000

Pros:

  • You can borrow up to 110% of the car’s price
  • Offers the lowest rates in the industry (if you use the car buying service)
  • Offers loans on new and used car purchases and refinances
  • Offers loan amounts up to $100,000

Cons:

  • You must be a member of PenFed Credit Union to apply for a car loan
  • The lowest APRs are only available on the shorter terms
  • Longer terms have higher loan amount minimum requirements

Overview

PenFed is a credit union providing its members incredible benefits, including low-interest rate car loans and a reputable car buying service.

While you get the lowest rates for using the car buying service, you don’t have to use it (only available with select dealers). PenFed offers loans on new and used cars and offers some of the lowest interest rates on the market.

Anyone can join PenFed – it’s free to join as long as you are 18-years old, have a savings account with at least $5, and are a US citizen.

>> Learn More: PenFed Auto Loans Review

#7. Consumers Credit Union

Consumers Credit Union Auto Rates
  • APR Range: 2.49% – 4.09%
  • Minimum Credit Score: 640
  • Loan Amount: No minimum loan amount and max depends on your qualifying factors

Pros:

  • Well-qualified borrowers can finance 100% of the purchase price
  • 0.5% rate reduction for autopay from a CCU account or 0.25% reduction for autopay from any other account
  • Offers car loans for new and used car purchases and car loan refinances
  • Almost anyone can join CCU to get the low rates

Cons:

  • You need decent credit to qualify for a loan
  • You must be a credit union member
  • A CCU checking account with autopay is required to get the lowest rates

Overview

Credit unions usually offer the lowest rates but have barriers to entry. Consumers Credit Union offers both low rates and easy membership qualifications.

To qualify, you pay just a $5 membership fee and keep a $5 balance in your Membership Share/Savings account. CCU offers low fixed interest rate loans with a variety of terms.

Their loans include 24-hour emergency service and mechanical care coverage, and you can get a rate reduction for setting up autopay.

#8. Carvana Auto Loans

Carvana Auto Loan Rates
  • APR Range: Varies based on the make and model of the car purchased
  • Minimum Credit Score: No minimum credit score required
  • Loan Amount: Varies based on the make and model of the car purchased

Pros:

  • You can shop online for a car and financing and even have the car delivered to you
  • There’s no hard inquiry on your credit report to see if you qualify
  • Carvana doesn’t do a hard credit inquiry to pre-qualify you for the loan
  • You only need an annual income of $4,000 to qualify for a loan
  • Cons:
  • You have only 45 days after getting pre-approved to select a car, buy it, and take delivery
  • Only works on used cars from Carvana
  • You need excellent credit to get the lowest rates

Overview

Carvana is a ‘car buying vending machine.’ You shop online for auto financing and the car you want. Carvana sells only used cars, but they meet Carvana’s tough standards.

Carvana offers real-time financing, so you can complete the entire transaction with one company. It’s easy and fast to buy a car and set up financing.

Carvana even gives you 7 days to ‘test’ the car to make sure it fits your lifestyle and needs. Choose from delivery to you or pick up at a local Carvana vending machine.

#9. OpenRoad Lending

OpenRoad Auto Loans
  • APR Range: Starting at 1.99%
  • Minimum Credit Score: Works with all credit types
  • Loan Amount: $7,500 – $100,000

Pros:

  • Has financing options for people with good and not-so-good credit
  • A simple application process that takes just minutes
  • No application or hidden fees
  • Great customer service

Cons:

  • Your loan must have a minimum balance of $7,500 to use OpenRoad
  • You must have a minimum monthly income of at least $1,500
  • Only works on vehicles 8 years or newer and 140,000 miles or less

Overview

If your financial situation changed since you bought your car, you may want to refinance to save money or shorten your term.

OpenRoad Lending helps you do just that with a simple application process that could save you money. The entire process is done online and takes only a few minutes, and it could save you as much as $1,200+ a year.

#10. LendingTree Auto Loans

  • APR Range: 2.49%+
  • Minimum Credit Score: Varies by lender
  • Loan Amount: Varies by lender

Pros:

  • Get multiple offers from one loan application
  • A LendingTree inquiry doesn’t affect your credit score
  • Offers options for new and used purchase, refinance, and lease buyouts
  • Offers superior tools to help you decide

Cons:

  • You won’t know the potential requirements until you complete an application and get offers
  • Need great credit to get the best rates and the most offers
  • A used car must have less than 120,000 miles to qualify

Overview

LendingTree is the original online marketplace for car loans. You can get offers from a variety of lenders without hurting your credit to see your options. LendingTree is free to use and matches you with lenders (they don’t offer loans).

You can compare your options side-by-side and choose one lender (or none) and move forward with your purchase. If you choose a lender, you’ll work directly with that lender to finalize the loan details.

#11. LendingClub Auto Loan Rates

LendingClub Auto Loan Rates
  • APR Range: 2.99% – 24.99%
  • Minimum Credit Score: Varies by lender
  • Loan Amount: $4,000 – $55,000

Pros:

  • The application process takes only a few minutes, and you’ll have answers instantly
  • No origination fee or prepayment penalty
  • You can check your rate without hurting your credit

Cons:

  • Eligible cars must be less than 10 years old and have fewer than 120,000 miles
  • Auto refinancing isn’t right for everyone
  • Not available in every state

Overview

Refinancing your car loan is easy with Lending Club. This online marketplace offers a simple application process that matches you with multiple lenders to find the refinance loan that’s right for you once you complete it.

Lending Club offers auto refinance loans for those who are in a better financial situation and want to save money and those who need help, such as a longer-term to lower your payment.

#12. Car.Loan.com

  • APR Range: 0% – 25%
  • Minimum Credit Score: Varies by dealer but works with low credit borrowers
  • Loan Amount: $7,500 – $45,000

Pros:

  • Makes it easier for low credit borrowers to buy a car
  • It’s free to use car.loan.com
  • Co-applicants allowed
  • No monthly income required

Cons:

  • Not available in all states
  • Car.loan.com does a hard credit pull which can hurt your credit score further
  • Most dealers offer high APRs

Overview

If you’re credit challenged, the Car.Loan.com platform may help you get the loan you need. Car.loan.com helps low credit borrowers get matched with a dealership in the area that can help them with financing.

They have a large network of dealerships that help borrowers with less than perfect credit get the car they need.

>> Learn More: Car.Loan.Com Review

#13. Oportun Auto Loan Rates

Oportun Best Auto Loan Rates
  • APR Range: Max 36%
  • Minimum Credit Score: 500
  • Loan Amount: $300 – $10,000

Pros:

  • No hard credit check with your application
  • No prepayment penalties
  • Caters to borrowers with low credit scores

Cons:

  • Requires minimum monthly income of $2,000
  • Your loan may have an origination fee
  • Only operates in 12 states

Overview

Opportun caters to borrowers with low credit scores. You can use the funding to buy a car from a dealership or private buyer, giving you more room for negotiation and/or buying power.

Oportun requires low credit scores but may have higher costs as most loans include an origination fee, but no loan has a prepayment penalty.

#14. Vroom Auto Loan Rates

Vroom Auto Loan Rates
  • APR Range: Varies by lender
  • Minimum Credit Score: Varies by lender
  • Loan Amount: Varies by lender

Pros:

  • Works with 12+ banks to get you approved, including Chase, TD Bank, and SunTrust
  • Vroom handles all aspects of buying a car, including registration and plates
  • Takes only minutes to apply

Cons:

  • Only sells used cars
  • You’ll pay a hefty delivery fee
  • There’s no room for negotiation, all prices are set

Overview

If going to the dentist is more appealing to you than going to a car dealer, you’ll love Vroom. You can buy a car and get the financing all online. Vroom will even deliver the car to you.

They make it easy to get the price you want (no haggling) and will arrange for financing with some of the largest banking names, like Chase and Ally. You get 7 days to decide if you like the car and the car is delivered directly to you.

>> Learn More: Vroom Review

Understanding Auto Loan Rates

How Do Car Loans Work?

A car loan is a secured loan. The lender uses the car as collateral. If you default on your payments, the lender can take possession of the car to get their money back. Most car loans have a fixed interest rate for a term between 2 – 7 years.

Car loans typically have interest rates lower than unsecured personal loans or credit cards because lenders have the car as collateral to back them up.

This makes it more beneficial to get a car loan, and it may even be easier to qualify since the bank knows they can fall back on the car if you default.

How to Find the Best Auto Loan Rates (Step-by-Step)

#1. Know Your Credit Score

Before applying for an auto loan, always check your credit score. If you can improve it, take the chance to do so.

If you don’t know what your credit history looks like, pull your free credit report here and look for any of the following:

  • Late payments, you can bring current
  • High credit card balances you can pay down
  • Collections or judgments you can settle
  • Mistakes you can dispute with the credit bureau

#2. Are You Looking to Refinance a Car? Or Purchase a New Car Altogether?

Decide your purpose in seeking auto financing. Are you buying a new or used car? It makes a difference not only in the financing options but the platforms you use.

Some lenders only offer new car loans, and others only used car loans. If you have a car loan and want to refinance or have a lease you want to buy out, you’ll need lenders that offer those options.

#3. Compare Your Options

Get at least 3 loans to compare side-by-side. Don’t look at just the interest rate but the total cost of the loan. Is there an origination fee? Is there a prepayment penalty? Look at the total cost to determine if the loan is right for you.

Jumping at the first loan with the lowest interest rate isn’t always the best choice. The rate may be low, but if the fees are high, the loan’s bottom line may cost more than if you took a loan with a higher rate.

#4. Stay Within Your Budget

Make sure you can afford the payment. Don’t just go by what you can afford on paper. Look at it realistically. Does it fit in your budget? Remember, you could have this payment for the next 2 – 7 years.

#5. Pick the Best Rate & Get Auto Insurance

Choose your loan based on the loan with the best rate and fees, and then get auto insurance. Your lender will require it.

You’ll need proof of paid-in-full insurance for the next year to close on your loan and get the funds to buy the car.

Auto Loan Terminology to Know

  • Loan Terms: Know the length of the loan and the type of loan. For example, a fixed-rate loan has one interest rate for the entire term. The term is the length of the loan, such as 2 years or 5 years. You’ll make monthly payments on the loan for the length of the term.
  • Interest Rates: All lenders charge interest – it’s how they make a profit and pay their interest rates for borrowing the money to lend to you. The lower the interest rate, the less the loan costs you.
  • Soft Inquiry: This doesn’t hurt your credit score. It’s like you pulling your credit to check it. It’s not an indication of intent to lend, and your credit score doesn’t change. Lenders don’t see a soft inquiry on your credit report either.
  • Hard Inquiry: Once you choose a loan, lenders do a hard inquiry, which shows up on your credit report. A hard inquiry means the lender has the intent to lend and is checking your credit score to determine if you qualify. Your credit score may drop 5 points for this.

Best Auto Loan Rates FAQs

What Is a Good Interest Rate for a Car Loan?

A good interest rate is a subjective thing, but on average, 3% is a great rate on a car. If you have great credit and qualify for manufacturer financing, you may get rates as close to 0% as you can get. Otherwise, any rate between 3% – 5% is good.

Can You Refinance a Car Loan?

You can refinance a car loan just like you can refinance a home loan. However, there are restrictions, including how much loan you must have outstanding, the car’s age, and mileage. Old cars or cars with high mileage may not qualify for refinancing.

>> Learn More: Best Auto Refinancing Lenders

How Does Auto Loan Refinancing Work?

If you refinance your auto loan, you pay off your existing car loan with a new car loan. Most people do this when their income or credit improves, and they qualify for better financing terms that would make their car loan more affordable.

When Should I Refinance My Car Loan?

It’s best to refinance your car loan after improving your credit or putting yourself in a better financial position. But you shouldn’t be upside down on your car loan (owe more than it’s worth) when you refinance.

>> Learn More: How to Refinance Your Car Loan

How Long Are Car Loans?

Car loans last for 2 to 7 years in most cases. The longer you borrow the money, the more interest you’ll pay and the more the car will cost. Focus on taking the loan with the shortest term that you can afford.

Should You Get an Auto Loan from a Bank, Credit Union, or Dealership?

Today you can get auto loans (or motorcycle loans) from banks, credit unions, and dealerships. The right place to get it is the one that offers the lowest rates and best terms.

Compare your options and see which is the most affordable monthly and long term. Dealership financing is usually the most expensive but include it in your comparisons to know for sure.

What’s the Difference Between an Auto Loan and a Personal Loan?

While you can use a personal loan to buy a car, you’ll pay higher interest for it because personal loans are unsecured and auto loans are secured.

This means for an auto loan; the lender uses the car as collateral. If you don’t make your payments, the lender can take possession of the car.

Can I Use a Credit Card to Buy a Car?

You may be able to use a credit card to pay for ‘some’ of the car’s purchase price, but most dealers won’t let you put the entire amount on your credit card because credit card companies charge dealers a transaction fee. The fee can be as much as 3% of the amount charged, which would decrease the dealership’s profits.

>> More: What Credit Score Is Needed to Buy a Car?

Do I Have to Make a Down Payment to Buy a Car?

Most banks require some sort of down payment on a car, but as you can see in our examples above, there are lenders who don’t require a down payment.

It’s in your best interest to make a down payment, though, since cars are a depreciating asset, you could quickly get upside down on your loan if you don’t make a down payment.

>> More: How Much Will A Car Loan Drop My Credit Score?

Bottom Line: Best Auto Loan Rates

Shop around and take advantage of the many auto loan marketplaces available today. There’s no excuse not to compare at least a few loan options to choose the one that’s right for you.

Look at the big picture and not just the monthly payment, so you choose the most affordable loan option.

Kim Pinnelli
Kim Pinnelli
Kim is a personal finance expert with a Bachelor’s degree in Finance from the University of Illinois at Chicago. She has been freelance writing for 13 years for a number of large publications. Kim thoroughly enjoys helping people take charge of their personal finances.