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Ask these 6 questions before getting a car loan

A few answers now can save you money on your car loan down the road.

Updated

Putting as much effort into getting a car loan is as important as finding the perfect car. Since no loan is perfect for every financial situation, you have to do your homework. Getting a bad deal may force you into paying extra every month or cost you more over the life of your loan.

6 questions to ask before getting a car loan

To find the best deal, you have to ask questions. Here are the top 6 car loan questions you should ask yourself before getting a car loan.

4 tips to comparing lenders

It pays to shop around when you’re looking for the best car loan. Knowing these four tips is a move in the right direction.

  1. Prequalify. While it’s not a guarantee your application will be accepted, prequalifying for an auto loan can give you the rate and term you might qualify for without a hard credit pull. This allows you to compare several providers without taking as many hits to your credit score.
  2. Compare apples to apples. In general, the interest rate you get depends on your income, credit score, the loan term you choose and the vehicle. Make sure any rates you’re comparing have similar loan terms and that the vehicle and your personal and financial information is the same.
  3. Make sure there are no restrictions. Some lenders will only write a car loan when you purchase a car from a network of partnered dealerships. Others won’t lend money if you purchase a vehicle from a private seller, or won’t refinance your current vehicle. Lenders may also exclude vehicles with high mileage or specific car makes.
  4. Don’t just go with dealership financing. Dealerships often charge a higher interest rate than what you can qualify for elsewhere and likely shouldn’t be your default choice.

Documents to bring when you apply

Have the following ready when you apply for a car loan:

  • Drivers license or another government-issued ID
  • Recent pay stubs and bank statements
  • Proof of residence — usually a utility bill, mortgage payment or similar document that has your full name and residential address
  • Vehicle information — including the make and model, year, VIN number and purchase price
  • Method of payment for your down payment
  • Current vehicle registration if you’re trading in your vehicle
  • Proof of insurance

Find a car loan to apply for today

Data indicated here is updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
Carvana
No minimum credit score
3.9% to 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
car.Loan.com Car Loans
300
Varies by network lender
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
CarsDirect auto loans
Varies by network lender
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
Auto Credit Express Car Loans
300
Varies
Varies
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
Get connected with an auto lender near you, even if you have bad credit.
Monevo Auto Loans
500
3.99% to 35.99%
3 months to 12 years
Credit score of 500+, legal US resident and ages 18+.
Quickly compare multiple online lenders with competitive rates depending on your credit.
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
LendingTree
Good to excellent credit
Starting at 3.09%
Varies by lender
18+ years old, good to excellent credit, US citizen
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
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Compare up to 4 providers

Bottom line

When shopping for a car loan, you’ll want to weigh the total cost with the monthly payment you can afford. It pays to shop around. It also pays to compare different types of auto loans and different lenders.

When you’re ready, check out our auto loan finder to compare all of your options. Or to narrow your search, take a look at our top car loan picks.

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