Best Auto Loans December 2021

For most Americans, “Buying” means exploring financing options or secured loans for most major purchases.

In today’s technological world, this can be as easy as filling out an online application, but before you purchase, you should arm with the information you need to make an informed decision before signing on to your next car payment.

Buyers typically have questions like:

How long does it take to get approved for your auto loan?

Which credit scores qualify for the best auto loan rates?

What credit score do you need to apply and qualify for an auto loan?

So to take the guesswork out, we have compiled our best recommendations to help you answer these questions as a savvy consumer.

Check Your Credit

Purchasing a car is a significant investment, and you need to prepare before taking out a loan. It is essential to know your credit score. Your credit score is a three-digit number that predicts the likelihood of repayment of borrowed funds. The minimum credit score required is not fixed but depends on the lender’s policies and preferences. Understanding your credit score will help you gather information about the lender financing your loan. You can access your credit report from the major reporting bureaus free of charge.

If you check your credit and find yourself needing to build a credit score, applying for a secured credit card can help.

There are several websites that you can use to access your free credit report.

The only agency authorized to bring you Equifax, Experian, and TransUnion at no cost is

Have a Budget in Mind

As much as you should feed your eyes, it should be within a set boundary. You need to determine your monthly budget for the car to get the one you can afford. Hence, focus on the overall cost of the vehicle and the number of payments and interests you will need to pay. Dealers will always fill the table with sweet deals and suggestions, some of which may be unnecessary. Having a budget will provide an escape from extra car features that are above your budget. Lesson? Don’t allow dealers sweet-talk you into paying a higher purchase price.

If you need help getting a grasp on your finances and making a budget check out YNAB (You Need a Budget).

Research Loan Rates

With your credit stand in mind and a set budget, you can look around for auto loan rates that apply to your needs. You can submit a loan application online to obtain an auto loan preapproval. Applications can also be completed through the phone and can then be delivered in person at a bank or credit union. Finding the best car loan rates also means that you need to ask for a quote to see their requirements and charges as they differ from lender to lender. We will take you through some of the lenders in the course of this article.

Obtain Loan Preapproval

Do not engage in mindless car shopping when you don’t have enough money for a car. Getting a pre-approval loan is possible with most credit unions, banks, and online lenders who will give you a loan preapproval letter to take with you for your shopping. With the preapproved car loan, you can set realistically budget your money to get the best interest rates. Having a pre-approval letter from the lender will also give you an added negotiating advantage with the dealership. Having this letter adds leverage and gives you a stronger bargaining power at the dealership. With the guarantee, you can confidently walk into the store and feed your eyes. However, preapproval does not mean secured loans. You can still reduce the loan amount if you find a more affordable car.

What do lenders look at in your application for a pre-approved loan?

Before you can gain approval for a loan, your full financial profile, including credit history, will be checked. To evaluate credit history, your credit score and will be used. The reports cover unpaid debts, foreclosures, and the number of credit applications, which may affect your interest rate. Your employment history can also be considered to measure the stability of your income. If your employment history is not stable, it may attract a higher interest rate.

Careful examination of your income and expenses is done. The lender will be more willing to give you the loan if your income exceeds your expenses. This will provide evidence that you are able to meet your obligations every month. The down payment on the car purchase is also considered. If the loan amount is small, it is less risky to the lender. When there is a large down payment, the lender will give a reduced interest rate and vice versa. It is important to reserve a portion of your money in savings rather than using all for a down payment.

The length of the car loan is another consideration. Longer loans will reduce monthly payments but increase the interest paid over the life of the loan. With shorter distances, monthly car payments are high with less interest over the loan period. The value of the collateral used can impact on the acceptance of your loan application. There is a lower interest rate when there is a secured guarantee. When an asset is used as collateral, it can be lost if you are not able to repay the loan. Hence, caution should be exercised before putting up assets like a house as collateral.

What Companies Can Help Me With Finding the Best Auto Loan?

It is possible to get great auto loan rates even with bad credit. Some of the best options for all credit types are briefly described below.

Carvana: Online Car Dealer with Financing Options

If you are looking to get financing for quality cars from online dealers, Carvana is an option you should explore. With Carvana, direct financing is only provided for vehicles in its online inventory. Thus, your car purchase can be completed from the comfort of your bed and delivered to you. Those with bad credit can also apply for loan financing as no minimum credit score is required. However, there is a minimum loan requirement of at least $10,000 annual income.

Their auto loan rates have a soft credit pull with free delivery available in some cities. Its maximum loan term is 72hours, and Carvana offers a stress-free 7-day return policy. You can use the Carvana Auto Loan Calculator to determine how much loan you can afford. Applicants have to be at least 18years with a single-buyer offer. The Annual Percentage Rate (APR) is not fixed but depends on the car and financing terms. The services of Carvana are only available in the United States.


If you are going to use LightStream, you need to make sure you have an excellent credit profile. Applicants with excellent credit can be funded the very day they make the applications. This is what makes it one of the top choices for applicants that need immediate or fast funding.

However, if you don’t have a credit history or you defaulted in your payment before, this option isn’t for you. Lightstream will ask for at least five years of credit history and offer APR between 3.99% and 8.34%. Lightstream offers borrowers competitive rates and quick car loans from $5,000 to as high as $100,000. However, there are no preapproval options provided.

To qualify, applicants must be at least 18years and must be a US citizen or a permanent resident. More importantly, their existing assets and income must be enough to cover the new loan and any outstanding debt. The interest rate is determined by considering credit standing, loan term, vehicle cost, and method of payment. No restrictions are placed with regards to the make or model of the car into consideration. They offer unsecured and secured loan options.

Capital One: Auto Finance

This lending is provided by Capital One, a national bank for new and used cars. However, it is restricted to some types of vehicles. The bank’s Auto Navigator will ensure that selection is dependent on the vehicle available near your location. For new purchases, loan terms cover 24 to 84months. It is well-known with a vast network of car dealerships.

The loan amount ranges from $4,000 to $40,000, with APR offers as low as 3.59%. Applicants must be at least 18years with a valid street address to qualify. They must have a minimum monthly income of $1,500 to $1,800, which is dependent on their credit score. The average credit score is 550, with a minimum of 500.

Capital One facilities are available in all states except for Alaska and Hawaii. A prequalification offer from Capital One is not an immediate guarantee that the loan will be approved.


MyAutoloan acts as a car-buying concierge, matching borrowers with lenders for new and used car purchases. If you do not mind being contacted by many companies from your single submission, then this is for you. It is a platform that allows one shop around for the best rate, even without proper credit. The process may require hard credit pull which may temporarily affect credit.

The loan amount ranges from $8000 to $100,000. You can apply for a loan if you earn a monthly income of $1,800 per month and have a credit score of at least 500. Services are available in all states except Alaska and Hawaii. Applicants are expected to enjoy a fast preapproval process without paying a dime on the application. APR can range between 2.74% to 27% with the minimum granted to those with an excellent credit score. It also provides several tools that can help you decide on the best loan to use.

Consumers Credit Union: Credit Union Auto Financing

Based in Illinois, ConsumersCredit union is a full-service union that offers different financial services. They can lend to applicants with both good and fair credits. This means that the credit union can give to those with as low as 640 credit score. To qualify for this loan, applicants must be members of the credit union. Loan amounts of $250 to $500,000 can be obtained with APR of 2.99% to 21.99%.

The minimum loan rate of 2.99% is offered to those with excellent credit and with loans of 36months and below. It is widely available in all states. The membership fee is $5 plus a $5 per month. They require a hard credit pull to ascertain the creditworthiness of members, which affects your credit score. Loan decisions may be made in as quick as 24hours. Refinancing options are also offered with restrictions on vehicle mileage and age. Members enjoy discounts on loan rates when automatic payment arrangements are made.

LendingTree: Auto Loans

Within a single platform, applicants can be connected to Lending Tree’s trusted partners on the submission of their forms. Through the online platform, applicants are exposed to other options that may not have been considered before. Once necessary details like loan type, down payment, vehicle make, and financial standing is entered, it matches applicants with lenders.

The online application process is quite simple and does not affect your credit. It allows for more comparison of auto loan options to make choices that are within your budget, from your home. Loans are offered for new cars, used cars and refinancing options. Applicants must be 18years and above and a United States citizen with good to excellent credit.

Lending Tree offers additional tools like loan payment calculator, credit score check, and live rates based on the current market situation. Loan rate varies between 2.29% to 3.99% with repayment terms of up to 84 months for new car loans. The ARPs are slightly higher for loans regarding used cars. However, it should be noted that the rates vary from lender to lender. Down payment may be required for some of the loans.

RateGenius: Refinance Auto Loan

RateGenius is the lenders’ choice for those with good-excellent credit scores, as the average credit score accepted is 690. However, the minimum credit score is 550, with a household income minimum of $2000 every month. RateGenius offers auto loan refinance for any vehicle including motorcycles and boats.

Founded in 1999, RateGenius helps you get access to loans from its extensive network of more than 150 partners. However, the process can be quite rigorous as some lenders may demand more paperwork than others. With RateGenius, multiple options can be obtained through a single application. This affords you many options to select from and potentially lower payment.

Their APR is between 3.49% and 25.87%. Loan amounts of $10,000 to $90,000 can be accessed. A full credit check is done on all applications. When a lender is selected, a hard credit pull is performed, which temporarily reduces his or her credit score. This is done to provide a preapproved loan offer. RateGenius is meant for qualified applicants interested in obtaining a new loan and not merely to inquire about auto loan rates. However, the best rate of 3.49% will only be available to those with excellent credit. RateGenius is available in about fifty states.

AutoPay: Financing Option

With Autopay, poor credit doesn’t have to stop you from buying a car you love. While credit score can play a role, some loans are still available for those without proper credits. AutoPay specializes in new and used car loans, lease buyouts, and loan refinancing of up to $100,000. They act as a middle party between lenders and their customers, offering low-interest financing.

There is no minimum income requirement to apply. Eligibility is determined by vehicle cost, market value, and your credit standing. If you are looking for a low monthly payment, AutoPay claims to have some of the lowest rates you can find. They also claim to reduce APR by more than 50% with increased annual savings of over $1000.

APR ranges from 1.99% to 17.99%. The lowest interest rate of 1.99% is reserved for people with excellent credits. The minimum document fees of about $400 to $500 are required if you want to escape the stress of doing paperwork. Using the provided refinance calculator, you can estimate your savings through their refinancing program. If you are tired of exorbitant rates, Autoplay can find affordable loans for you or help you refinance your current one.

Clearlane: Auto Financing

Clearlane requires that applicants must make at least $2,000 every month with a minimum credit history of three years. Their services should only be used for those who are looking to refinance their current car loan. The minimum loan amount is $5,000, with an APR range of about 3.64% – 21.9%. The minimum credit score acceptable is 600. It is an excellent option for those who may find it difficult to obtain loans from the bank. Since Clearlane is not a lender in itself, you may be restricted to only lenders in Clearlane’s network. Credit score, the market value of the car, and the remaining balance of your loan will be considered. Powered and backed by Ally Bank, Clearlane offers gap insurance for events of uncertainty.

Auto Credit Express

If you are discouraged by your poor credit or previous bankruptcy status, Auto Credit Express has got you covered. It is a preferred referral source that helps you find a lender according to your budget for new or used cars. It does this by connecting applicants to lenders and dealers that specialize in bad credit holders.

Your credit history doesn’t have to limit you from accessing a loan to buy your dream car. However, it is not available for applicants making less than $1,500 monthly or without full-time employment. There is no fixed APR as it varies according to the lender. It is open to current residents of the United States or Canada who are above 18years, and it has no origination fee.

Final Words…

No matter what anyone says, paying for something isn’t as fun as using it. Before you buy, we can’t stress enough about having a budget in mind. You don’t want to overbuy. The benefits of getting the best auto loans are numerous. Please take advantage of each lender and do your research to understand their loan terms better. Check your credit regularly and develop good credit behavior to increase your chances of a favorable loan.