What are my $30,000 car loan options?
You have a few options when you’re looking to borrow $30,000 for a car loan, including:
- Secured car loans. Secured car loans use the vehicle you’re buying as collateral. Although this means more risk for you — you’ll lose your car if you can’t repay the loan — it typically results in a lower interest rate and better terms. Most car loans will be secured, so these will make up most of your $30,000 car loan options.
- Unsecured car loans. Unsecured car loans work similarly, but you won’t have to use the car you’re purchasing as collateral. You don’t risk losing your car if you’re unable to afford repayments, but you’ll likely have a higher interest rate and less competitive terms. These types of car loans aren’t very common, so you’ll have to do some digging to find a lender that offers them.
- Car leases. Rather than buying a new car outright, a car lease allows you to drive one for a select number of years or miles. At the end of your term, you can usually choose to return your car, extend the lease or buy it out. Most dealerships offer financing to help you pay for this monthly expense.
- Personal loans. A $30,000 personal loan can also be used to buy a car. If you’re interested in an unsecured option, you likely won’t find as competitive rates as you would with a secured car loan. However, if you want to take out a loan to cover both the cost of a new car as well as other expenses, then a personal loan may suit your needs better.
Where can I find a $30,000 car loan?
From online lenders to financing through a dealership, there are several places to turn to when on the hunt for a $30,000 car loan:
- Bank. Your bank might be the first place you check for a car loan, but don’t stop there. If you have good to excellent credit, compare prequalification offers from other banks, too — many don’t require you to hold an account in order to apply for a car loan.
- Credit union. Credit unions are less strict about eligibility criteria, but generally require you to be a member in order to take out a loan. If you’re already part of a credit union, check to see what rates you might qualify for. Or consider your options with other credit unions in your area — some may allow you to apply for membership and a car loan at the same time.
- Online lender. Online lenders may not be your first choice, but they often offer competitive rates — especially if your credit isn’t good enough to qualify for a bank loan. Many lenders will even allow you to add the cost of taxes, titling, registration and other fees into the total amount you borrow.
- Dealership. Nearly every dealership offers financing — usually through the manufacturer or a local bank. You’ll likely be able to get a $30,000 car loan and drive off the lot the same day, but watch out: You may end up spending more on interest with dealership financing than going through an online lender or bank.
Can I afford a $30,000 car loan?
While $30,000 car loans are becoming more common, you’ll still want to consider if this is an amount you can comfortably afford to pay back. Your interest rate and loan term both play a role in your monthly repayments and the total cost of your loan. Choosing a longer term will help keep repayments lower, but you’ll end up paying more in interest over the life of your loan. Most car-buying experts recommend dedicating no more than 15% of your monthly budget toward all car expenses — including your loan payment, fuel costs, insurance premium and regular maintenance.
Popular cars you can buy for around $30,000
Convinced a $30,000 car loan is for you? Whether you’re on the hunt for a sports car or truck, you have plenty of options to choose from. Below are the manufacturer suggested retail prices (MSRPs) of some popular 2019 models. The actual cost you end up paying will depend on where you live, your negotiation skills and any special promotions you qualify for.
|2019 model||Starting MSRP||Body|
|Dodge Challenger||$27,595||Sports car|
|Chevy Silverado 1500||$28,300||Truck|
|Hyundai Santa Fe XL||$30,850||SUV|
How to compare $30,000 car loans
When you’re sorting through your $30,000 car loan options, keep these features in mind:
- Interest rate. In general, the better your credit, the lower your interest rate will be. This is a good rule of thumb, but it will also depend on whether your rate is fixed or variable and the loan term you choose. Typically, shorter loan terms come with more competitive rates.
- Loan term. Most car loans come with terms from three to seven years. Longer loan terms lead to lower monthly repayments, but you’ll pay more in interest in the long run.
- Secured or unsecured. Most of your car loan options will be secured, meaning the car you’re purchasing is used as collateral. If you default on the loan, your lender can repossess your car. On the other hand, if you borrow an unsecured car loan, you won’t risk losing your car if you default — but your interest rate will typically be higher.
- Fees. Different lenders have different fees, which may include application, origination and late payment charges. You may also be on the hook for prepayment penalties if you make extra payments on your loan or pay it off before the term is up.
You have a few options when looking to borrow $30,000 to buy a car — from online lenders to banks and credit unions to dealership financing. You may want to brush up on your negotiation skills before you head to the dealer to make sure your car’s price stays within an affordable range.
Read our guide to car loans to learn more about how they work and compare even more lenders.
Frequently asked questions
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