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Methodology for rating car loans

With so many car loans on the market, we've created a rating system to help you decide which loan is right for you.

Our editors objectively compare car loans and rank them on several benefits and features to give you an overall rating of how useful each loan might be when compared to others on the market.

Our ratings

We rate car loans using a system of one to five stars.

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Keep in mind, however, that our “top” picks may not always be best for you. Based on your situation, you may find certain features to be more or less important, so compare your car loan options before you apply. While we looked at a range of loans available for our “top” picks, we did not compare all the car loan products available in the market.

How we rank car loans

We consider 9 factors when comparing car loans.

How we rate minimum loan amounts

★★★★★ — Under $500

★★★★★ — $501 to $1,000

★★★★★ — $1,001 to $4,999

★★★★★ — $5,000 to $10,000

★★★★★ — $10,001+

Typically, car loans start around $500 or $1,000. We consider any starting amount under $500 to be the most competitive and worthy of 5 stars, since it provides the most flexibility for borrowers.

How we rate maximum loan amounts

★★★★★ — $75,000+

★★★★★ — $50,000 to $74,999

★★★★★ — $25,000 to $49,999

★★★★★ — $10,000 to $24,999

★★★★★ — $9,999 and under

Most lenders cap out at around $50,000, however a few offer much more. We gave the highest rating to any lender that offers loans at or above $75,000. The lowest rating goes to lenders that offer loans under $9,999, since that meets fewer needs.

How we rate turnaround time

★★★★★ — Same day

★★★★★ — 1 to 2 business days

★★★★★ — 3 to 5 business days

★★★★★ — Over 5 business days

Turnaround time is how long it takes to get a loan from the moment you start an application to the moment the money appears in your bank account.

The most common turnaround time for a car loan provider with an online application is one or two business days. Lenders that beat that with same-day financing earn a perfect score. Those that lag behind didn’t do as well.

How we rate minimum APRs

★★★★★ — Below 3%

★★★★★ — 3% to 6.99%

★★★★★ — 7% to 10.99%

★★★★★ — 11% to 20.99%

★★★★★ — Over 21%

The most competitive starting APRs clock in somewhere under 3%, with some lenders offering $0 down. Any lender with an APR starting above 21% is considered to be a bad deal — your credit card might have a better rate.

How we rate maximum APRs

★★★★★ — Below 18%

★★★★★ — 18.01% to 25%

★★★★★ — 25.01% to 30%

★★★★★ — 30.01% to 40%

★★★★★ — Over 40%

Chances are you’re not going to get the lowest rate a lender offers, which is why we consider the entire range. Car loan providers rarely offer APRs above 46.99%, which is where most lenders top off – but this will garner them a lower star rating.

Any lender with an APR cap below 18% means all customers get a better deal than most credit cards — earning it the full 5 stars.

How we rate fees

★★★★★ — No fees at all

★★★★★ — Charges late or NSF fees

★★★★★ — Charges origination, late or NSF fees

★★★★★ — Charges a prepayment penalty

Fees vary widely between lenders. If a lender charges no fees — including late or NSF fees — it earns 5 stars. If it only charges late or NSF fees, it earns a 4. Origination fees and prepayment penalties bump a lender down to 3 and 2 stars, respectively.

How we rate customer reviews

★★★★★ — Excellent customer service

★★★★★ — Good customer service

★★★★★ — Average customer service

★★★★★ — Subpar customer service

★★★★★ — Poor customer service

This rating is optional, since not all lenders have enough online reviews to give a meaningful picture of the customer experience. It only applies if a lender has over 100 reviews on Trustpilot or the Better Business Bureau (BBB). We use the customer review rating from whichever site has the highest number of reviews.

How we rate the online application

★★★★★ — Has an online application

★★★★★ — Doesn’t have an online application

If a lender has an online application, it earns 5 stars. If you can’t apply online or have to visit a branch to finish your application, it earns 1 star.

How we rate perks

★★★★★ — Offers at least 4 types of perks

★★★★★ — Offers at least 3 types of perks

★★★★★ — Offers at least 2 type of perk

★★★★★ — Offers at least 1 type of perk

★★★★★ — Offers no perks

Perks are considered a bonus factor. The more perks a lender offers, the higher the star rating it gets.

  • Offers prequalification
  • Can purchase any vehicle you’d like
  • Can purchase ATVs, RVs and other leisure/recreational vehicles
  • Free used car vehicle history report
  • Offers classic car financing
  • Offers private party purchases

What we don’t consider

While our star ratings can help guide you toward a decision, we don’t consider these 2 factors when determining a lender’s score:

  • Loan term. Car loan terms tend to range drastically between providers. Some offer terms as low as 3 months, while others offer terms as high as 120 months.
  • Eligibility requirements. Credit score, income, time employed and current finances all play a role in approval. But because these vary widely from lender to lender, you’ll need to compare these separately when deciding on your car loan provider.

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