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Compare variable-rate car loans

They're rare — and fluctuating rates mean you're gambling on the market.

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Kellye Guinan
Updated . What changed?
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Variable-rate car loans result in fluctuating monthly payments. Most lenders don't offer them. And even if they do, you may be better off sticking to a predictable fixed rate to avoid a rising interest rate when the market shifts.
Data updated regularly
Data updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
PenFed Auto Loans
PenFed Auto Loans
Varies
Starting at 1.79%
3 to 7 years
Active membership with PenFed
Low APR car loans from a well-known credit union.
Go to site
More Info
Carvana
Carvana
No minimum credit score
3.9% to 27.9%
Varies
18+ years old, annual income of $4,000+, no active bankruptcies
Get pre-qualified for used car financing and receive competitive, personalized rates.
Go to site
More Info
car.Loan.com Car Loans
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.
Go to site
More Info
CarsDirect auto loans
CarsDirect auto loans
No minimum credit score
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.
Go to site
More Info
Auto Credit Express Car Loans
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.
Go to site
More Info
Monevo Auto Loans
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.
Go to site
More Info
LendingTree
LendingTree
Good to excellent credit
Starting at 0.99%
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.
More Info
myAutoloan.com Car Loans
myAutoloan.com Car Loans
550
Starting at 1.89%
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.
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More Info
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You’ll have a tough time finding a lender that offers variable-rate car loans. Instead, select your credit score and state to see what fixed interest rate you could qualify for with one of these lenders.

Data updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
PenFed Auto Loans
PenFed Auto Loans
Varies
Starting at 1.79%
3 to 7 years
Active membership with PenFed
Low APR car loans from a well-known credit union.
Go to site
More Info
Carvana
Carvana
No minimum credit score
3.9% to 27.9%
Varies
18+ years old, annual income of $4,000+, no active bankruptcies
Get pre-qualified for used car financing and receive competitive, personalized rates.
Go to site
More Info
car.Loan.com Car Loans
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.
Go to site
More Info
CarsDirect auto loans
CarsDirect auto loans
No minimum credit score
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.
Go to site
More Info
Auto Credit Express Car Loans
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.
Go to site
More Info
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Compare up to 4 providers

What is a variable-rate car loan?

A variable-rate car loan means that the interest rate of your loan may fluctuate if the market interest rate changes. This could lead to your interest rate — and monthly payment — increasing or decreasing over time. 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 cap on it’s variable rate, your interest rate could be as high as 35.99%.

5 factors to consider with variable-rate car loans

Like any car loan, you’ll want to pay attention to these factors before borrowing a variable-rate loan:

  1. Base interest rate. Even though the interest rate is variable, looking at the base interest rate that applies to the loan will help you determine how competitive your lender is — especially against fixed-rate car loans.
  2. Rate cap. Look into whether your lender offers a maximum variable rate — if not, you could be stuck with an annual percentage rate (APR) of 35.99%. This could also lead to monthly payments you can’t afford, increasing your risk of default.
  3. Loan term. A variable-rate car loan with a longer term means there’s more time for your rate to increase, which increases the risk of ending up with high monthly payments that are difficult to afford.
  4. 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.
  5. Fees. Look for upfront fees such as origination fees as well as ongoing fees such as monthly and annual fees. Some lenders also charge prepayment penalties if you choose to pay off your loan early, which can add to the total cost.

What types of car loans have 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.

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 monthly payments you can’t afford if the prime rate increases — especially if your lender has no variable rate cap.

Keep in mind that variable-rate car loans are rare: Consider more care loan options to find a loan that’s the right fit for your budget.

Frequently asked questions

Our answers to more questions you might have about variable-rate auto loans.

Can I refinance a variable-rate car loan?

Yes, you can refinance a variable-rate car loan with another lender. In some cases, you may be able to lower the total cost of your loan or reduce your monthly payment. To learn more, read our guide to refinancing a car.

How can I calculate my monthly payment on a variable-rate loan?

You can use our car loan calculator to estimate the monthly payments for the car you’re interested in. Keep in mind that this number is based on the current variable rate and could go up or down depending on changes in the lending market.

Can I switch from a variable-rate loan to a fixed-rate loan?

It depends on your lender, but probably not. If it doesn’t offer the option to switch, you’ll need to refinance your existing car loan for a new loan with a fixed rate.

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