Editor's choice: Carvana
- Most credit types welcome
- 45-day preapproval
- Seven-day guarantee
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Best car loans of 2020
Consider these lenders when you finance your next ride.
Select from several lenders that offer a variety of loan options to cover you no matter what type of car you want to buy. Many accept a range of borrowers, so you can get funding no matter your credit score.
To find the best car loans, we checked the types of car loans, APR and total loan amount of each lender. We chose lenders that accept a wide variety of borrowers and offer lower maximum rates. We also confirmed each lender’s legitimacy, business practices and customer rating with the Better Business Bureau and Trustpilot.
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- Best for same-day funding: LightStream
- Best for buying a car completely online: Carvana
- Best for comparing lenders that accept good credit: LendingTree
- Best for comparing lenders that accept bad credit: myAutoLoan.com
- Best for refinancing: LendingClub
- Best for low rates from a bank: Bank of America
- Best for low rates from a credit union: Alliant Credit Union
- Best for financing leisure vehicles: M&T Bank
- Same-day funding available
- Large maximum loan amount of $100,000
- No restrictions on used cars
- Good to excellent credit required
- No preapproval process
- Low annual income requirement
- 7-day return period
- Long preapproval period of 45 days
- Only offers used cars
- No option to negotiate price
- Financing must be used for Carvana
- Simple online form
- Large network of auto lenders
- Multiple vehicle financing options available
- Good to excellent credit required
- Complaints about too much marketing materials
- Transparent rates
- Multiple car loan options
- Low minimum credit score requirement of 550
- High minimum loan amount of $8,000
- Strict minimum income requirement
- May receive marketing materials
- Competitive rates
- Limited fees
- Accepts older vehicles
- Not available in every state
- Loan balance must be at least $5,000
- Turnaround up to 14 days
- Extremely low starting APR
- Multiple car loan options
- Large maximum loan amount of $100,000
- Limited dealership network
- Must have BofA bank account to apply for private-party purchase
- Long list of ineligible vehicles
- Extremely low starting APR
- High maximum loan amount of $1 million
- Fair credit OK
- Multiple rate discounts available
- Must become a member
- No private party financing
- Limited car loan options
- Low starting rates for boat and RV loans
- APR discount for current customers
- Long loan terms available
- Limited state availability
- Not all fees are transparent
8 top car loan providers
Best for same-day funding: LightStream Auto Loans
$5,000 – $100,000
Loan amount
Loan amount
N/A
APR
APR
Starting at 24 months
Term
Term
LightStream is an online lender backed by Truist Bank. It has competitive rates, and unlike many lenders, offers same-day funding on car loans. But you'll need good to excellent credit to qualify. And there's no preapproval process, which means applying with LightStream will result in a hard pull of your credit — whether or not you're approved.
| Loan amount | $5,000 – $100,000 |
|---|---|
| APR | N/A |
| Term | Starting at 24 months |
| Interest Rate Type | Fixed |
| Min. Credit Score | 700 |
Best for buying a car completely online: Carvana
N/A
Loan amount
Loan amount
3.9% – 27.9%
APR
APR
Starting at 12 months
Term
Term
Carvana is an online lender and dealership without the dealership sales tactics. It offers a simple financing process for its used car inventory, and rates start decently low at 3.9% — although they can reach a high 27.9%. And while financing can only be used at Carvana, you have up to 45 days to choose your car. Combined with Carvana's seven-day return period, it's an easy way to avoid getting stuck with a car — and a loan — that doesn't suit your needs.
| Loan amount | N/A |
|---|---|
| APR | 3.9% – 27.9% |
| Term | Starting at 12 months |
| Interest Rate Type | Fixed |
| Annual Fee | $0 |
| Origination Fee | 0% |
Best for comparing lenders that accept good credit: LendingTree
N/A
Loan amount
Loan amount
Starting at 3.09%
APR
APR
Starting at 12 months
Term
Term
LendingTree simplifies the search process. With one form, you can see what car loans you could qualify for — no matter what type of vehicle you want to finance. The lenders in its network offer rates as low as 3.09% and competitive terms. But if you don't have good to excellent credit, you may not qualify for a loan.
| Loan amount | N/A |
|---|---|
| APR | Starting at 3.09% |
| Term | Starting at 12 months |
| Interest Rate Type | Fixed |
| Min. Credit Score | 670 |
| Turnaround Time | Varies by lender |
Best for comparing lenders that accept bad credit: myAutoloan.com Car Loans
$8,000 – $100,000
Loan amount
Loan amount
1.79% – 27%
APR
APR
N/A
Term
Term
Like LendingTree, myAutoLoan.com is a connection service that uses your information to help you find a lender. It accepts borrowers with low credit, and its network of lenders are transparent about their rates. However, you have to borrow at least $8,000. And because it sends your information to multiple lenders, you may receive marketing materials even after you get a loan.
| Loan amount | $8,000 – $100,000 |
|---|---|
| APR | 1.79% – 27% |
| Term | N/A |
| Interest Rate Type | Variable |
| Min. Credit Score | 550 |
Best for refinancing: LendingClub Auto Refinancing
$5,000 – $55,000
Loan amount
Loan amount
7% – 24.99%
APR
APR
N/A
Term
Term
LendingClub exclusively offers refinancing for car loans — at decently low rates. It accepts cars up to 10 years old or under 120,000 miles and could potentially help lower your rates or monthly payment. But it isn't available in every state, and the refinancing process may be slower than other lenders.
| Loan amount | $5,000 – $55,000 |
|---|---|
| APR | 7% – 24.99% |
| Term | N/A |
| Interest Rate Type | Fixed |
| Min. Credit Score | 580 |
Best for low rates from a bank: Bank of America Auto Loans
$5,000 – $100,000
Loan amount
Loan amount
Starting at 2.69%
APR
APR
Starting at 12 months
Term
Term
Bank of America is one of the top banks out there — and you'll be hard pressed to find a lender with lower starting rates. Its wide selection of loan options also makes it a good choice for almost any borrower. And while you're generally stuck buying from its network of dealerships, Bank of America will finance private-party loans if they meet some set requirements. Just be sure any vehicle you're looking at meets its long list of minimum requirements.
| Loan amount | $5,000 – $100,000 |
|---|---|
| APR | Starting at 2.69% |
| Term | Starting at 12 months |
| Interest Rate Type | Fixed |
Best for low rates from a credit union: Alliant Credit Union Car Loans
$5,000 – $1,000,000
Loan amount
Loan amount
Starting at 2.74%
APR
APR
Starting at months
Term
Term
Alliant Credit Union often makes our various lists of best lenders, and its car loans are no exception. It may only offer three standard types of car loans — and you will have to open an account — but its rates are some of the lowest you'll find. Even borrowers with fair credit may qualify, although you won't get the lowest possible APR.
| Loan amount | $5,000 – $1,000,000 |
|---|---|
| APR | Starting at 2.74% |
| Term | Starting at months |
| Interest Rate Type | Fixed |
| Min. Credit Score | 640 |
Best for financing leisure vehicles: M&T Bank Auto Loan
Starting at $2,000
Loan amount
Loan amount
3.39% – 13.99%
APR
APR
Starting at months
Term
Term
M&T Bank is one of the few banks that offers financing for RVs, boats, motorcycles and other leisure vehicles. It offers clear rates and terms, although the fees you might pay aren't easily found. And while you'll find a wide variety of vehicles covered, M&T Bank has a limited reach — it only has branches in eight states and Washington, DC.
| Loan amount | Starting at $2,000 |
|---|---|
| APR | 3.39% – 13.99% |
| Term | Starting at months |
| Interest Rate Type | Fixed |
How can I get a good rate on a car loan?
Here are a few pointers to nab a good deal on your next car loan:
- Consider a newer vehicle. New car loans come with lower interest rates because the lender is taking on less of a risk. Most new car loans allow you to secure a vehicle that’s less than two years old, although some may only be for cars that haven’t been previously owned.
- Apply within 45 days. When you apply for multiple car loans, keep your applications within a short period — typically no more than 45 days. Most credit bureaus will count it as one line on your credit report, saving you from lowering your score every time you fill out an application.
- Get preapproved. The easiest way to avoid an inquiry is to apply for preapproval. Many lenders are able to quote you an estimated rate without doing a hard credit check.
- Note all of your assets in your application. Some lenders offer lower interest rates if you have a large sum of money to fall back on. Even if you’re applying for a secured car loan, listing other assets may help you get a better rate.
- Borrow less than you’re buying the car for. Having a down payment or trade-in can make you eligible for a lower rate if a lender sees you don’t need to borrow 100% of the purchase price of the vehicle.
- Compare your options before you apply. Comparing offers from different car loan providers can help you find the lowest rate available to you. If you don’t want to do this yourself, you can consider using a car finance broker or online connection service.
How is my interest rate determined?
Car loans can come with rates as low as 2%, but the rate you qualify for depends on several factors, including:
- Credit score. The best rates go to borrowers with the best credit score.
- Income. The higher your income, the more likely you are to get a good deal.
- Debt-to-income ratio. Having regular monthly debt expenses worth 20% or less than your income can also get you a better deal.
- Car type. New cars typically come with lower rates than used cars.
- Loan term. Often longer loan terms come with higher rates — especially at credit unions.
3 types of car loans to consider
Low interest
Compare low interest car loan options and keep payments down.
Secured
Use your vehicle as security and benefit from lower rates.
Bad credit
Compare lenders that specifically assist people with poor credit.
Should I use manufacturer financing?
Manufacturer financing can be a good option if you have excellent credit and a strong credit history. This is because many manufacturers offer special deals on new and certified preowned (CPO) cars. These can include cash back, 0% financing and other discounts — all of which can drastically lower your monthly repayment.
But these deals are difficult for most borrowers to qualify for. If you want to get the best rate, take the time to see what other lenders will offer. Then you can compare it to the manufacturer — or dealership — financing option to ensure you’re picking the right loan.
Will I get a better deal with a larger down payment?
In general, yes. Lenders may be more willing to offer favorable terms if you have money saved up to use as a down payment. A larger down payment also means you have to borrow less, which reduces your monthly payment and how much you’ll pay in interest.
For instance, say you’re looking to borrow $15,000 for a new vehicle. The lender you’ve chosen to go with offered you a 60-month term with a 7.45% APR.
By calculating your monthly payments with different down payment amounts, you can see how much money you’ll save each month and overall:
| Down payment | Monthly payment | Interest paid |
|---|---|---|
| 0% ($0) | $300.21 | $3,012.78 |
| 10% ($1,500) | $270.19 | $2,711.50 |
| 20% ($3,000) | $240.17 | $2,410.22 |
In this example, by having $3,000 saved up, you end up spending about $600 less on your loan and reduce your monthly payments by $60.
A sizable down payment can make the best loan even better by potentially saving you hundreds of dollars in interest over the life of your loan.
Compare more car loan options
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Bottom line
The truth? There’s no single best car loan out there. Not everyone looking for a car loan is buying the same car, earns the same income or is in the same financial situation. It’s up to you to compare your car loan options and find the lender that best fits your needs.
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