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Hear from our editors: The best auto loan rates of 2021
Updated December 1, 2020
This date indicates our editors’ last comprehensive review and may not reflect recent changes in individual terms.
Editorial Note: Credit Vana receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted.
Best auto loan rates
Best rates for new-car loans: Bank of America and PenFed Credit Union
Bank of America
- If you choose to purchase from a dealership, you’ll be limited to franchise dealerships and a few independent dealers, including CarMax, Carvana and Enterprise Car Sales.
- Repayment terms range from 12 months to 75 months. Keep in mind that the lender may offer different terms on Credit Vana.
- If your application is approved, your rate is locked in for 30 days, which gives you time to shop around.
PenFed Credit Union
- You must become a member to get a car loan with PenFed Credit Union. Qualifying groups include members of the military, eligible veterans and retirees and their families. You may also be eligible for membership if you’re a member of certain organizations.
- Loan terms range from 36 months to 84 months. Remember that while choosing a longer term could reduce your monthly payment, you could end up paying more in interest over the life of the loan.
- If you’ve been a member of the credit union for at least 90 days, you can apply for preapproval (a conditional loan approval that includes an estimated loan rate and terms). Preapproval can tell you how much you may be approved to borrow and can help you focus on finding a car that fits your budget instead of worrying about what financing the dealer may offer you. Just keep in mind that preapproval isn’t a guarantee of approval, and your loan terms may change after you submit a formal application.
Best rates for used-car loans: Chase and U.S. Bank
- You can get an interest rate discount if you’re a Chase Private Client, though this requires an average daily balance of at least $250,000 in qualifying deposit and investment accounts.
- Chase doesn’t require a down payment on auto loans. But if you’re able to, it may be a good idea to make one. It could help improve your chances of approval, lower your interest rate and reduce your risk of becoming upside down on your auto loan.
- You must finance a car from a dealer in Chase’s network.
- You need to live in one of the 26 states where U.S. Bank has a branch.
- Loan terms range from 12 months to 72 months.
- The bank charges a prepayment penalty if you pay off your loan within the first year.
Best rates for private-party loans: LightStream and PNC
- LightStream doesn’t offer the opportunity to apply for preapproval.
- Repayment terms range from 24 months to 84 months.
- LightStream has no restrictions on the model year, make or mileage of vehicles it will finance. This can be helpful if you plan to buy an older vehicle.
- PNC doesn’t appear to finance car models older than 2012.
- You need to live in a state where PNC does business to apply (enter your ZIP code on the online appointment request form to find out if you’re eligible). PNC branches are located in the Mid-Atlantic, Southeast and Midwest regions of the U.S.
- PNC offers private-party loan terms of 12 months to 72 months.
Best rates through lending platforms: AutoPay and MyAutoLoan
- AutoPay lenders offer a range of auto loans, including loans for new and used cars purchased from a dealership, private-party loans, and refinancing options such as traditional, cash back and lease buyout loans.
- AutoPay offers the ability to apply for prequalification. If you prequalify, you can check your estimated rates and loan terms without affecting your credit scores. Just be aware that prequalification isn’t a guarantee of loan approval. And if you’re approved after you submit a formal application, your loan terms may change.
- The company has a high approval rate — it claims on its website that on average, 94% of marketplace customers who apply for a loan through AutoPay are approved.
- Lenders in the MyAutoLoan network offer new- and used-car loans, private-party loans, lease buyout loans and refinance loans.
- MyAutoLoan considers people who have less-than-perfect credit. Lender requirements vary, but in general, you must be at least 18 years old, have a FICO® score of at least 575, and have a minimum income of $21,000 to qualify ($18,000 for refinance). Lenders in the MyAutoLoan network may also consider people who have filed for bankruptcy, but the bankruptcy must be discharged or dismissed.
- MyAutoLoan doesn’t offer loans in Alaska or Hawaii.
How we picked these lenders
What to consider with starting auto loan rates
What is a good interest rate on an auto loan?
But remember that a range of factors, including the type of lender, can affect the rate you’re offered. Credit unions tend to offer lower rates than banks. And if you qualify, you may be able to get the lowest possible rate — 0% APR — when you get a new-car loan through an automaker’s finance company.