Auto Loans

Best Auto Loans for 2022

An auto loan allows you to purchase a car while extending the payment period to offer more affordable payments. Here are the best auto loans available to qualified borrowers.

Christy Rakoczy

March 4, 2022

Many or all of the companies featured provide compensation to LendEDU. These commissions are how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear on our site.

If you are in the market to buy a new car, one way to pay for it is with an auto loan. Not only should you look for a fair price on a new or used car, but you should also look for a good interest rate on your auto loan.

Increased competition from online and non-traditional auto lenders has made it easier to get approved for an affordable auto loan. With so many options on the market today, consumers need to shop around and compare offers from more than one lender to find the best deal.

To help you get started on your search, check out our picks for the best auto loans from online lenders; best traditional auto loans; and best credit union auto loans.

In this guide:

Best Online Auto Loans
Best Traditional Auto Loans
What to Look for in an Auto Loan
How to Get the Best Auto Loan Rates

Loan amounts from $5,000 to $100,000
No LTV, age, make, or model restrictions
Funds deposited in your account as soon as the same day you apply

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Auto loans made easy for any credit situation
Start loan process in 60 seconds
No-hassle process – no obligation

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One application – Up to 4 loan offers in minutes
Receive online certificate or check within 24 hours
Use your check to buy the car you want or use it to refinance your current loan

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1) LightStream

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3.49% – 9.49%^* with AutoPay

$5,000 – $100,000

24 – 84 months^**

As a division of SunTrust Bank, LightStream is a reputable lender offering auto financing to qualified borrowers. LightStream auto loans do not require a minimum annual income but there are other credit criteria borrowers must meet, such as average to good credit. Here are some of the key things you need to know if you’re considering a loan from LightStream:

Minimum credit score: 660
Rate discount: 0.50% for automatic payments
Origination fee: None

Pros

No fees for applying for or accepting an auto loan
No restrictions on the age or type of car
Same-day approvals possible

Cons

Borrowers with bad credit may not qualify
A hard pull is required to check your credit

>> Learn more about LightStream’s Auto Loans on its website.

2) CarsDirect

Note: CarsDirect isn’t a lender itself but connects consumers with lenders after they fill out a simple application

View Rates

Varies by lender

24 – 84 months

CarsDirect doesn’t impose any minimum credit score requirement, so it may be a good option for drivers seeking a bad credit auto loan. Of course, you’ll qualify for better rates if you can have a strong credit history, and there are other requirements borrowers must meet, including a minimum income requirement.

Here’s what you need to know about CarsDirect loans:

Minimum credit score: None since it is a marketplace
Rate discount: Varies by lender
Origination fee: Varies by lender

Pros

A good option for those with older or less expensive vehicles
Finds dealer financing options
Financing for those with less than good credit
Online tools available at no cost

Cons

Buyers must deal directly with the car dealership to secure financing
Can expect to receive calls from other lenders

>> Learn more about CarsDirect’s Auto Loans on its website.

3) AutoPay

View Rates

As low as 1.99%

$2,500 – $100,000

24 – 84 months

AutoPay is a newer addition to the online auto financing market. The finance company offers an array of car loans for borrowers with a range of income and credit qualifications. AutoPay auto loans come with the following terms:

Minimum credit score: 600
Minimum annual income: $24,000
Rate discount: 0.50% for automatic payments
Origination fee: Not disclosed

Pros

Borrowers can compare rates from different lenders
No Social Security number is required
No application fees or prepayment penalties
Pre-qualification in minutes
Loan offers available for up to 30 days

Cons

Minimum credit score and income required
Higher loan terms can lead to paying more interest
Interest rates may be higher than comparable lenders

4) Ally

View Rates

Not disclosed

$1,000 – $100,000

12 – 84 months

Ally is an online bank that offers a wide array of financial products including auto loans. You can use an Ally auto loan to buy a vehicle, or you can lease a vehicle with Ally SmartLease® if you’re interested in driving a new car more frequently. Both personal and business vehicles can be financed with Ally, but you need to meet certain qualifications. Here’s what you need to know about terms and conditions:

Minimum credit score: 620
Rate discount: Not disclosed
Origination fee: Not disclosed

Pros

Ally offers different programs including typical car loans; leases; buyer’s choice loans that allow you to make car payments for 48-months and then continue making payments or sell the car to Ally; or balloon advantage loans that provide smaller monthly payments but require a lump sum payment at the end of your loan term.
Ally’s mobile app makes account management easy

Cons

You have to go through a dealership to get an Ally auto loan
You might not be able to buy a vehicle that’s more than 10 years old or that has more than 120,000 miles on it

Best Traditional Auto Loans

Wells Fargo
Capital One
U.S. Bank

1) Wells Fargo

View Rates

Not provided

$5,000 – $300,000

12 – 72 months

Wells Fargo is a global financial institution that offers affordable car loans to qualified borrowers. There is no minimum income requirement, but there are other credit criteria borrowers must meet to be eligible. Here’s what you need to know if you’re considering a Wells Fargo auto loan:

Minimum credit score: 650
Rate discount: Not disclosed
Origination fee: Not disclosed

Pros

Quick application process and fast approval
Pre-approvals available
Competitive rates for highly qualified borrowers
Financing for private party and lease purchases

Cons

48-month maximum term for older vehicles
APR isn’t available until an application is submitted

2) Capital One

View Rates

Not disclosed

As low as $4,000

36 – 72 months

Capital One is a major auto lender, and it makes the loan approval process easy. You can pre-qualify for financing online without a hard credit inquiry, and you’ll have flexibility in your loan repayment terms.

Unfortunately, you can only borrow if you buy from a participating dealership, so you are restricted in where your vehicle can come from. However, Capital One has more than 12,000 participating dealers it works with, so most borrowers should be able to find a suitable vehicle at a participating dealership.

Minimum credit score: Not disclosed
Rate discount: Not disclosed
Origination fee: Not disclosed

Pros

You can pre-qualify online with no credit inquiry
There’s no application fee required to apply

Cons

You have to complete your application at a participating dealer, which means getting a hard inquiry on your credit report

3) U.S. Bank

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As low as 4.59%

$3,000 – $100,000

12 – 72 months

U.S. Bank was first founded in 1863 and it now offers auto loans in 49 out of 50 states across the United States. It offers a competitive APR, flexibility in loan terms, and it makes loans available even to borrowers without perfect credit.

Minimum credit score: 650
Rate discount: Not disclosed
Origination fee: Not disclosed

Pros

Quick loan approval and your loan can be funded within just 7 days of the time your loan is approved
The loan minimum is below what many lenders require
The starting APR for US Bank Auto Loans is below the starting APR for many competitors

Cons

Borrowers may be charged an origination fee

How We Chose the Best Auto Loans

To find the best auto loans, our Editorial Team analyzed the product’s APR, loan terms, BBB rating, minimum and maximum borrowing limits, states available, application/origination fees, and discounts. The weight of each of these varied depending on whether the product was offered from a traditional bank and online lender.

Learn more about our ratings and methodology here.

What to Look for in an Auto Loan

Before applying for an auto loan, it is important to know what you should pay attention to when selecting the right lender for your auto financing needs.

First and foremost, be cognizant of the interest rate offered by your lender of choice. The interest rate dictates how much you will pay over the life of the loan in addition to the original amount financed. A higher interest rate means you pay more for your auto loan.

In addition to the interest rate, you should also look at qualification requirements, including minimum income, minimum credit score, and vehicle requirements.

Borrowers should also review the strength of the financial institution offering auto financing, along with the term length of the loan and payment options. Each of these factors plays a role in how well the car loan used to purchase a new or used vehicle fits into your financial life.

How to Get the Best Auto Loan Rates

There are several steps you can take to ensure you get the right car loan with the best rate for your next vehicle purchase.

Shop the loan, then the car. Obtain financing or a pre-approval from an auto lender before heading to the dealership so you can focus on negotiating on the vehicle purchase itself.
Know your credit. Your credit history and score will dictate how much you pay in interest over the life of your auto loan. Check your credit report beforehand to make sure you are in the best financial position to get an affordable car loan.
Look for an interest rate discount. Some financial institutions offer interest rate discounts on auto loans. These may be available for having a qualified account or establishing automatic payments once the loan is approved.
Select a shorter loan term. Shorter repayment terms may help you save on the total interest paid over the life of the loan, and it may allow for a lower interest rate offered. However, a shorter repayment term also means a higher monthly payment, so be sure to check your budget first.
Avoid variable auto loan rates. Some lenders may offer a variable interest rate loan, in which the interest rate changes over time as broad interest rates move up or down. A fixed interest rate loan may be a better option if you want predictability with your payments and the total cost of borrowing.
Consider a down payment. Putting down a few hundred to several thousand dollars when purchasing a car can help reduce the total amount you finance and pay interest on.
Check out dealer financing. Some dealerships will offer exclusive financing offers on certain vehicles. This can provide a much lower interest rate than some banks or credit unions offer, but be sure to compare the rates you’re offered with a few other options to make sure the deal you’re getting is as good as it seems.
Work with select dealerships. Some auto dealers have preferred relationships with specific lenders. This can make it easier to qualify for a new auto loan with an affordable rate.

Bottom Line: Find the Auto Loan That’s Best for You

There are car loan options for borrowers with just about any credit history, income, and vehicle financing needs. However, finding the right one can be a challenge if you don’t know where to start. Be sure to shop around and consider all of your auto loan options before making your decision.

Additional auto loan resources:

^*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

^**Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.

Author: Christy Rakoczy

Christy Rakoczy is an experienced personal finance and legal writer who has been writing full time since 2008. She earned her JD at UCLA and graduated from the University of Rochester with a degree in media and communications. Her work has been featured on CNN Money, MSN Money, Yahoo Finance, USA Today, and more.