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Compare variable-rate car loans

Fluctuating rates mean you're gambling on the market.


Though fixed-rate car loans are still the most popular, lenders are slowly beginning to offer variable-rate options as well. A variable-rate loan can offer lower rates if the economy takes a downturn. But they can also rise suddenly, making it a somewhat risky option.

Compare variable-rate car loan providers

Data indicated here is updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
BlueSky Auto Finance car loans
Starting at 3.99%
24 to 72 months
Boro Auto Loans for Students
Starting at 6%
US citizen, permanent resident or F-1, OPT, H-1B, J-1, L, O-1, G, A5 or C8 visa holder, minimum GPA, dealer in eligible state
Car loans for international and college students with @pl_product_var_rate@ APR.
Capital One Auto Financing
3.24% (As low as)
3 to 6 years
Valid street address, existing Capital One account in good standing, buying 2009 model or newer with less than 120,000 miles
You could qualify for a car loan of up to $40,000, but not all dealers accept this bank's financing.
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.
Tresl auto loans
Varies by lender
Varies by lender
500+ credit score or higher, employed with $1,500 of verifiable gross monthly income
A loan connection service that specializes in refinancing, lease buyouts and company car purchases. Car Loans
1.79% to 27%
550+ credit score, no open bankruptcies, $24,000+ annual income, US citizen or permanent resident, 18+ years old
Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.
RateGenius Auto Loan Refinance
2.99% (as low as)
Income of $2,000+/month, vehicle has less than 150,000 miles and is no older than 8 years, loan balance is between $10,000 and $100,000, debt-to-income ratio is less than 50%
Connect with a network of over 150 lenders to refinance your car loan.
RoadLoans Car Loans
Up to 72 months
Be 18+, monthly income of $1,800+, reside in a state where RoadLoans operates and do not have open car loan with RoadLoans, parent company Santander Consumer USA or Chrysler Capital is an online direct-to-consumer lender that focuses on customers with poor or no credit with no specific credit score requirement. Car Loans
Up to 72 months
Car must cost between $7,500 and $45,000, less than 125,000 miles, 2009+ model, personal-use vehicle, brand recognized by, not electric or leased car, reside in a state served by
With competitive rates and a quick application, offers a solution for people with poor credit who need to find a car and have trouble qualifying for a loan.

Compare up to 4 providers

What is a variable-rate car loan?

A variable-rate car loan has an interest rate that changes based on the Wall Street Journal prime rate. This is the rate most big US banks give their most creditworthy borrowers, which fluctuates based on changes in the lending market and economy.

Because of this, the variable interest rate you first receive when you take out your car loan isn’t guaranteed to stay the same throughout your loan term — it could go up or down depending on market trends.

While this means you could see lower rates when the economy is stable or on the decline, there’s also the risk of the prime rate skyrocketing during periods of prosperity. And if your lender doesn’t have a variable rate cap, there’s no limit to how high your interest rate could go.

3 factors to consider with variable-rate car loans

To avoid ending up in a bad financial situation, pay extra attention to these factors before taking out a variable-rate loan:

  • Loan term. A variable-rate car loan with a longer term means there’s more time for your rate to increase, which ups the risk of ending up with high monthly repayments that are difficult to afford.
  • Rate cap. Look into whether your lender offers a maximum variable rate — if not, there’s no limit to how high your rate could soar. This could lead to unaffordable repayments, increasing your risk of default.
  • State of the economy. If the prime rate is expected to rise in the coming months, you might want to opt for a fixed rate. On the other hand, if the economy’s hit a slump and the prime rate is expected to decrease, you might save with a variable rate.

What are the different types of car loans with a variable rate?

When it comes to car loans with variable rates, there are two main loan types:

  • New car loans. Lenders tend to offer lower rates across the board for new vehicles, since these cars offer something more valuable to the lender should you default.
  • Used car loans. Whether you’re looking to buy a used car from a dealership or private seller, used car loans tend to have higher starting fixed and variable rates. This is because there’s more of a risk to the lender should you default, since your car isn’t as valuable as a new car would be.

4 questions to ask when comparing variable-rate car loans

Consider the following factors to compare your variable-rate loan options and find the right one for you:

  • What interest rate will I be charged? Even though the rate is variable, looking at the rate that applies to the loan when you’re comparing will give you an idea of the competitiveness of the product.
  • What fees come with the loan? Look for upfront fees such as origination fees as well as ongoing fees such as monthly and annual fees.
  • Can I make additional payments? Variable-rate loans tend to be more flexible in terms of allowing additional payments to quickly pay off the loan. But in some cases you can be charged a fee, so check with your lender.
  • Can I repay the loan early without penalty? Check if an early prepayment or early termination fee applies.

Bottom line

Variable-rate car loans have the potential to save you money on interest should the market take a hit. But you also risk ending up with unaffordable monthly repayments if the prime rate increases — especially if your lender has no variable rate cap.

If you’re not willing to take the gamble, compare other car loans to find one that’s the right fit for your financial situation.

Frequently asked questions

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