Best Car Loans and Lenders for April 2022 – CNET [CNET]

March 30, 2022 Pallavi Kenkare technology

Buying a new or used car? With car insurance rates rising and auto loan rates expected to increase, make sure your lender will offer you an auto loan with low rates and flexible terms.

This type of loan is usually secured, which means the vehicle you purchase acts as collateral and can be subject to repossession if you fail to repay it. But the trade-off is that you’ll get a lower interest rate than with unsecured borrowing, such as a personal loan. Although auto loan rates are relatively low, it’s still important to shop around to find the best rates and terms for you. You can apply for a car loan at a car dealership, bank, credit union or via an online lender.

We’ll lay out some of the basics here. Plus, we’ve evaluated the major national auto loan providers and highlighted the best options for new, used and private party (purchase of a car from a private seller) loans below. We’ll update this list regularly as terms change and new loan products are released. Note that all the starting APRs listed assume an “excellent” credit score of 800 or above.

PenFed Credit Union

Best for new and used car loans

See at PenFed Credit Union

Consumers Credit Union

Best for new and used car loans, runner-up

See at Consumers Credit Union

LightStream

Best for private party car loans

See at LightStream

Bank of America

Best big bank option

See at Bank of America

U.S. Bank

Best for longer loan terms

See at U.S. Bank

Carvana

Best for those with poor or no credit

See at Carvana

Best car loan lenders, compared

Lenders	PenFed CreditUnion	Consumers Credit Union	LightStream	Bank of America	U.S. Bank	Carvana
Best for	New and used car loans	New and used car loans, runner up	Private party car loans	Big bank option	Longer loan terms	Those with poor or no credit
APR for new car loans	Starting at .99% or 1.79%	Starting at 2.24% or 2.74% (car loans for 2020 or newer vehicles)	Starting at 2.49%	Starting at 2.49%	Starting at 2.59%	N/A
APR for used car loans	Starting at 1.99% or 2.39%	Starting at 2.49% or 2.99% (car loans for 2016-2019 vehicles)	Starting at 2.49%	Starting at 2.69%	Starting at 2.59%	Starting at 3.9%
APR for private party loans	N/A	N/A	Starting at 3.49%	Starting at 5.69%	N/A	N/A
Loan amount	$500 to $100,000	$250 to $100,000	$5,000 to 100,000	$7,500 ($8,000 in Minnesota) to $100,000	$5,000 to $100,000	Not specified
Repayment terms	36 to 84 months	0 to 84 months	36 to 84 months	48 to 72 months	12 to 72 months	36 to 72 months
Credit requirement (estimate)	Not specified	Not specified	Not specified	Not specified	Not specified	Accepts all credit, no active bankruptcies
Availability	All 50 states	Branches across Illinois, shared branches nationwide	Online	All 50 states	Branches in 26 states	Not available in Hawaii or Alaska

What to know when applying for an auto loan

While car loans usually have fixed interest rates and loan terms, they can often be negotiated, depending on your lender. Your loan rate will generally depend upon your credit score — the higher your credit score, the lower your annual percentage rate. A higher credit score may also give you access to a larger loan amount or more favorable repayment terms.

Next, you should consider loan terms. Let’s say you qualify for a 2.5% APR loan. You’ll pay less interest over time with a shorter term loan, but your monthly payments will be higher. Similarly, you’ll pay more in interest over time with a longer loan term, but your monthly payments will be lower. Consider your budget and financial goals to determine which loan term will work best for you.

As you consider lenders, find out if they offer a preapproval process. Preapproval allows you to see the rates you qualify for without a hard inquiry — when a creditor pulls your credit history — which can cause your credit score to slightly dip. It also allows you to review options upfront without having to commit to a particular lender.

Lenders reviewed:

Autopay
Bank of America
Capital One
Carvana
Chase
Consumers Credit Union
LightStream
MyAutoLoan
PenFed Credit Union
PNC
U.S. Bank