car loan
Taking out a car loan is one of the most common ways that people finance a new or used car purchase today. A car loan allows you to borrow money from a lender, such as a bank, credit union, or other financial institution, to cover the cost of a vehicle. You then repay the Car loan amount plus interest over a set period of time, usually between 2-7 years.
Car loans offer several key benefits compared to paying the full cost of a car upfront in cash:
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Affordability: Loans allow you to buy a more expensive car than you could pay for in cash, by spreading payments out over time. This makes cars more accessible.
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Build credit: By making regular on-time payments, a car loan helps you establish or rebuild your credit history. Good credit scores make you eligible for better loan terms in future.
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Lower upfront costs: Just a down payment is required at purchase, reducing the immediate cash needed.
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Ownership: You can drive the car while repaying the loan. Without a loan requiring a lump sum payment, you get transportation.
In recent years, car loans have become increasingly popular. According to Experian, the average amount financed for a new car loan in Q3 2019 reached $32,187, an all-time high. Used car loans also hit a record high average of $20,137. Easier access to financing has fueled new and used car sales growth.
What to Consider When Getting a Car Loan
When shopping for a car loan, there are several key factors to consider that will impact your overall costs and experience:
Credit Score Requirements
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Most lenders will require a minimum credit score in the 600-650 range, though some may accept scores in the 500s with higher interest rates. The better your credit, the lower rate you’ll qualify for.
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Shop around with multiple lenders to find the best rates for your credit score level. Getting pre-approved can show you what rates you qualify for.
Interest Rates
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Interest rates can vary dramatically between lenders, from 3% to over 20% for borrowers with bad credit. Compare rates between banks, credit unions, and online lenders.
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Opt for the shortest loan term you can afford, as longer terms equal more interest paid over the life of the loan.
Loan Term Lengths
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Term lengths range from 12 months to 84 months, with 36 and 60 months being common options. Shorter terms mean higher monthly payments but less interest.
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Take the shortest term you can afford to pay off the loan faster and save on interest charges over time.
Down Payment Amounts
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Most lenders require 10-20% down for new cars and 0-10% on used. Bigger down payments lower the amount financed so you pay less interest.
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Put down as much as you can afford to reduce interest costs and potentially qualify for better rates. Trade-in value counts toward down payment.
Fees and Penalties
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Watch out for origination fees, documentation fees, prepayment penalties and other lender fees that increase loan costs.
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Avoid loans with prepayment penalties that charge extra fees if you pay off the loan early. Ask about any fees upfront before signing.
#10 ABC Auto Loans
ABC Auto Loans is one of the top providers of auto financing in the United States. This company offers competitive interest rates and flexible loan terms to customers with varied credit histories.
Overview:
ABC Auto Loans has been in business since 2005. They are headquartered in Los Angeles but provide loans nationwide both online and through a network of dealer partners. ABC has a reputation for approving borrowers with poor or fair credit.
Pros:
- Fast online application process
- Loans approved for older vehicles
- Low down payments as low as $500
- No prepayment penalties
Cons:
- Higher interest rates for bad credit borrowers
- Limited branch locations
Loan Types:
ABC provides installment loans, leases, and lines of credit for new and used vehicles. Loan terms range from 12 to 72 months.
Interest Rates:
Interest rates start as low as 2.49% for borrowers with excellent credit scores. Subprime borrowers can expect rates from 15-30% APR.
Customer Satisfaction:
ABC Auto Loans has an A+ rating with the Better Business Bureau. Customers praise the easy application process and customer support. Complaints are minimal but usually involve higher than expected interest rates.
#9 Company Name car loan
Company Name is a top car loan provider known for its competitive interest rates and flexible loan terms.
Overview
Company Name has been providing auto loans for over 10 years. They work with a network of over 5,000 dealerships across the country to offer financing options to buyers. The company specializes in loans for new and used vehicles.
Pros
- Competitive interest rates, often lower than rates from banks and credit unions
- Flexible loan terms from 24 to 84 months
- Easy online application process
- Fast loan decisions, sometimes within minutes
- No prepayment penalties
Cons
- Higher interest rates for borrowers with poor credit
- Origination fees can be high
- Limited branch locations for in-person support
Types of Loans
Company Name offers loans for new and used cars, refinancing of existing auto loans, and leases. You can also get pre-approval before shopping for a vehicle.
Interest Rates
Interest rates start as low as 2.49% for borrowers with excellent credit. Rates range from 4-20% depending on your credit score.
Customer Satisfaction
Company Name has an A+ rating with the Better Business Bureau. Customers appreciate the fast service and competitive rates. Some complaints about high fees.
#8 XYZ Car Loans
XYZ Car Loans is one of the top auto lending companies in the United States. Founded in 2005, they specialize in providing auto loans directly to consumers across the country.
Overview:
XYZ Car Loans operates online and over the phone to provide quick and easy access to auto financing. They have built a reputation for great customer service and competitive interest rates. Their website allows customers to pre-qualify for loans and submit applications entirely online.
Pros:
- Fast online loan approvals
- Flexible loan terms up to 84 months
- No prepayment penalties
- Online account access and payments
Cons:
- Higher interest rates for bad credit
- Limited branch locations for in-person service
Loans Offered:
XYZ Car Loans offers financing for new and used vehicle purchases, refinancing of existing auto loans, and lease buyouts. Loan amounts range from $5,000 to $100,000.
Interest Rates:
Interest rates through XYZ Car Loans start as low as 2.49% for borrowers with excellent credit. Rates range up to 15% for borrowers rebuilding their credit.
Customer Satisfaction:
XYZ Car Loans maintains an A+ rating with the Better Business Bureau and 4 out of 5 stars on Trustpilot. Customers praise their easy application process, fast funding, and responsive customer service. Their main complaints involve higher rates for poor credit borrowers.
#7 Upstart
Upstart is an online lending platform that offers auto loans to borrowers based on education and job history rather than just credit scores.
Overview
Upstart uses artificial intelligence and machine learning to analyze a borrower’s education, area of study, GPA, work experience, and other factors to determine creditworthiness. This allows them to offer loans to those with short or limited credit histories.
Pros
- Uses alternative data for credit decisions beyond just credit scores
- Competitive interest rates
- Fast online application and funding process
- No prepayment penalties
Cons
- Requires at least 3 years of work experience
- Late fees can be high
- Limited loan term options
car loan
Upstart offers 3 and 5 year new and used auto loans. Loan amounts range from $1,000 to $50,000.
Interest Rates
Interest rates range from 5.94% to 35.99% APR, depending on credit history, income, and other eligibility factors. Rates are competitive for those with good credit.
Customer Satisfaction
Upstart has an A+ rating with the Better Business Bureau. Customers praise the easy application process but some note high interest rates for those with poor credit. Overall, customer satisfaction appears good.
#6 Example Loan Company
Example Loan Company is one of the top providers of auto loans in the United States. Founded in 2005, they have over 15 years of experience in the industry.
Overview
Example Loan Company provides loans directly to consumers through their website and over 500 branch locations nationwide. They offer competitive interest rates and flexible loan terms to customers with varied credit histories. Their application process is straightforward and they provide fast loan decisions.
Pros
- Wide availability with branches and online services
- Competitive interest rates, especially for good credit
- Fast application and loan decision process
- Variety of loan terms from 12-72 months
Cons
- Higher interest rates for poor credit borrowers
- Can have prepayment penalties
- Online application requires a lot of documentation
Types of Loans
Example Loan Company offers new and used auto loans, refinancing, and lease buyouts. Loan amounts range from $5,000 to $100,000. They have loans for private party, dealer, and auto refinancing.
Interest Rates
Interest rates range from 3.99% APR for borrowers with excellent credit to over 20% APR for borrowers with poor credit. Rates depend on credit score, loan term, down payment, and other factors.
Customer Satisfaction
Example Loan Company has an A+ rating with the Better Business Bureau. They have positive customer reviews praising their fast service, competitive rates, and helpful staff. Some complaints focus on high rates for poor credit borrowers and confusing fine print. Overall they have above average customer satisfaction in the auto loan industry.
#5 Company Name
Company Name is a top car loan provider known for its competitive interest rates and flexible repayment options. The company has been in business for over 10 years and has helped thousands of customers finance new and used car purchases.
Overview
Company Name is a national lender that provides auto loans directly to consumers through its website and network of dealership partners. They offer loans for new, used and refinanced vehicles. The company touts its easy online application process and fast loan approvals.
Pros
- Competitive interest rates, often lower than rates from traditional banks
- Pre-qualification tool shows estimated rates without a hard credit check
- Loans for borrowers with fair credit – minimum credit score is 550
- Online application and fast approval process
- Flexible loan terms up to 84 months
- Allows co-signers for some loans
Cons
- Higher interest rates for borrowers with poor credit scores
- Origination fees can be several hundred dollars
- No branch locations for in-person service
Loan Types
Company Name offers new and used auto loans, refinancing, and lease buyouts. New car loans have lower rates while used car loans are available for vehicles up to 10 years old.
Interest Rates
Interest rates range from 3.99% – 29.99% APR based on creditworthiness. Those with good credit can qualify for rates under 5%. Rates are higher for used cars and borrowers with lower credit scores.
Customer Satisfaction
Company Name earns positive reviews for its easy application process and funding speed. Customers appreciate the various loan term options. Complaints cite higher than expected interest rates for some borrowers. The company has an A+ rating with the Better Business Bureau.
#4 Local Credit Union
Local Credit Union is a mid-sized credit union that offers auto loans nationwide. Here’s an overview of their auto loan program:
Overview: Local Credit Union has been offering auto loans for over 50 years. They have a simple application process and local branches across 20 states. Their auto loans are available for new, used and refinanced vehicles.
Pros:
- Competitive interest rates, often lower than large banks
- Flexible terms from 12-84 months
- No prepayment penalties
- Local service at branches
Cons:
- Loan options can vary by location
- Online application but documents require in-person/mail
- Maximum loan amount of $75,000
Loan Types: Local Credit Union offers financing for new, used and refinanced vehicles including cars, trucks, SUVs, and RVs.
Interest Rates: Interest rates range from 3.24% to 18% APR depending on credit history, loan term, and type of vehicle. Rates are locked in when you apply.
Customer Satisfaction: Local Credit Union has an A+ rating with the Better Business Bureau. Customers appreciate the personalized service, competitive rates, and flexibility. Loan officers work to find the best auto loan options for each borrower’s situation.
#3 Company Name
Company Name is one of the top car loan providers in the United States. Founded in [year], they have helped thousands of Americans finance new and used vehicles.
Overview of company
Company Name specializes in auto loans and is dedicated to helping customers find affordable financing options for their vehicle purchases. They work with a network of dealer partners across the country to provide financing at the point of sale. Beyond dealerships, customers can also apply for direct car loans online or by phone.
Pros
- Fast loan approvals and funding
- Competitive interest rates
- Flexible loan terms up to 72 months
- No prepayment penalties
- Online account management and payments
Cons
- Higher interest rates for customers with poor credit
- Late fees can be expensive
- Limited branch locations for in-person service
Types of loans offered
Company Name offers new and used auto loans, refinancing, and lease buyouts. Loan amounts range from $5,000 to $75,000 for new cars and $5,000 to $50,000 for used cars.
Interest rates
Interest rates range from 3.99% APR for customers with excellent credit to over 20% APR for subprime borrowers. Rates depend on credit score, loan term, vehicle type, down payment, and other factors.
Customer satisfaction
Company Name maintains an A+ rating with the Better Business Bureau. Customers praise the fast approvals, competitive rates, and helpful customer service. Some complaints involve issues with loan terms not being adequately explained by dealers and higher-than-expected payments. Overall, most customers have a positive financing experience with Company Name.
#2 Example Loan Company
Example Loan Company is one of the leading providers of auto loans in the United States. Founded in 2005, they have established themselves as an industry leader by providing competitive interest rates and excellent customer service.
Overview
Example Loan Company offers loans directly to consumers through their website and nationwide network of dealerships. They provide financing for new and used vehicles, refinancing of existing auto loans, and lease buyouts. Their underwriting model utilizes both traditional credit reports and alternative data to provide financing options for borrowers across the credit spectrum.
Pros
- Fast online application and approval process
- Competitive interest rates, often beating rates from banks and credit unions
- Flexible loan terms from 24 to 84 months
- No prepayment penalties
- Online account management and payment options
Cons
- Higher interest rates for borrowers with poor credit
- Origination fees can be high for some loan products
- Limited branch locations for in-person support
Loan Types
Example Loan Company offers standard purchase and refinance loans, as well as specialized programs like lease buyouts and loans for customers undergoing bankruptcy. Loan amounts range from $5,000 to $100,000 depending on the value of the vehicle.
Interest Rates
Interest rates start as low as 2.49% for highly qualified borrowers. For borrowers with average credit, rates are generally between 4% to 9%. Subprime borrowers can expect to pay between 9% and 20% interest. Rates depend on credit history, loan amount, and term length.
Customer Satisfaction
Example Loan Company has an A+ rating with the Better Business Bureau. They are known for excellent customer service, responding quickly to questions and concerns. Their easy application process, flexible terms, and lack of prepayment penalties keeps customers satisfied. Reviews indicate high levels of customer loyalty.
#1 Best Car Loan Company: Company Name
Company Name is the top car loan company in the USA due to its competitive interest rates, flexible loan terms, and excellent customer service. This lender offers new and used car loans, as well as refinancing options.
Overview
Company Name has been providing auto loans for over 50 years. They are a national lender with over 800 branches across the country. Company Name offers loans directly to consumers as well as through a network of over 12,000 auto dealerships.
Pros
- Very low interest rates, often lower than rates from banks and credit unions
- No application fees or prepayment penalties
- Flexible loan terms from 24 to 84 months
- Easy online application and fast loan decision
- Allows co-signers for improved rates
Cons
- Requires a good credit score to qualify
- No options for bad credit borrowers
- Online customer service lacks phone support
Types of Loans
Company Name provides financing for new and used car purchases, refinancing of existing auto loans, and lease buyouts. Loan amounts range from $5,000 to $100,000.
car loan
Interest rates start as low as 1.99% for highly qualified buyers. Average APRs range from 3-6% for new cars and 4-8% for used cars with good credit. Rates depend on credit score, loan term, and other factors.
Customer Satisfaction
Company Name earns high marks for customer satisfaction. They have an A+ rating with the Better Business Bureau. Reviews praise their fast service, low rates, and helpful customer support. Their NPS score of 78 indicates a high likelihood customers would recommend them.
Conclusion
When looking for the best car loan company, it’s important to consider interest rates, approval odds, customer service, and loan terms. Based on these factors, here are the top companies:
- Company 1 offers low interest rates and flexible loan terms.
- Company 2 has high approval odds, even for bad credit.
- Company 3 provides exceptional customer service and transparency.
Before applying for a car loan, be sure to compare interest rates across multiple lenders. Also check loan terms, fees, and prepayment penalties. Getting pre-approved can help you negotiate the best deal when buying a car.
To get started, visit Company 1, Company 2, or Company 3’s website today and apply online. Providing accurate information will help receive the best loan offer for your situation. With a bit of research, you can find the right car loan with reasonable rates. Drive off the lot sooner by getting pre-approved.