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Auto Loans

Best Auto Loans

If you are in the market to buy a new car, one way to pay for it is with an auto loan. For the best deal, look for a fair price on a new or used car and a low interest rate on your auto loan.

Increased competition from online and nontraditional auto lenders has made getting approved for an affordable auto loan easier. With so many options, consumers must compare offers from multiple lenders to find the best deal.

To start your search, check out our picks for the best auto loans from online lenders, the best traditional auto loans, and the best credit union auto loans.

In this guide:

Best online auto loans

  1. LightStream
  2. CarsDirect
  3. AutoPay
  4. Ally

1) LightStream

  • Rates (APR): 7.99% – 15.44% w/ AutoPay
  • Loan amounts: $5,000 – $100,000
  • Term lengths: 24 – 84 months

LightStream is a reputable lender offering auto financing to qualified borrowers. LightStream auto loans don’t require a minimum annual income, but borrowers must meet other credit criteria, such as average to good credit. Here’s what 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


  • No fees for applying for or accepting an auto loan

  • No restrictions on the age or type of car

  • Same-day approvals possible


  • 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

  • Rates: Vary by lender
  • Loan amounts: Vary by lender
  • Term lengths: 24 – 84 months

CarsDirect doesn’t impose any minimum credit score requirement, so it may be a solid 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 borrowers must meet other requirements, including a minimum income.

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

  • Minimum credit score: None (because it’s a marketplace)
  • Rate discount: Varies by lender
  • Origination fee: Varies by lender


  • An appealing option for those with older or less expensive vehicles

  • Finds dealer financing options

  • Financing for those with below-average credit

  • Online tools are available at no cost


  • Buyers must deal secure financing from the car dealership

  • You’ll get calls from other lenders

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

3) AutoPay

  • Rates (APR): 2.99% – 17.99%
  • Loan amounts: $2,500 – $100,000
  • Term lengths: 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


  • Compare rates from different lenders

  • No Social Security number is required

  • No application fees or prepayment penalties

  • Prequalification in minutes

  • Loan offers available for up to 30 days


  • 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

  • Rates (APR): Not disclosed
  • Loan amounts: $1,000 – $100,000
  • Term lengths: 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 lease a vehicle with Ally SmartLease® if you’re interested in driving a new car more often. You can finance personal and business vehicles with Ally but must meet certain qualifications. Here’s what you need to know about the terms and conditions:

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


  • Offers different programs.

    These include typical car loans, leases, buyer’s choice loans that allow you to make payments for 48 months and then continue making payments or sell the car to Ally, and 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


  • Must go through a dealership to get an Ally auto loan

  • You might not be able to buy a vehicle over 10 years old or with more than 120,000 miles

Best Traditional Auto Loans

  1. Wells Fargo
  2. Capital One
  3. U.S. Bank

1) Wells Fargo

  • Rates (APR): 3.90%19.51%
  • Loan amounts: $5,000 – $300,000
  • Term lengths: 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


  • Quick application process and fast approval

  • Preapproval available

  • Competitive rates for highly qualified borrowers

  • Financing for private party and lease purchases


  • 48-month maximum term for older vehicles

  • Must submit an application to find out your APR

2) Capital One

  • Rates (APR): Not disclosed
  • Loan amounts: As low as $4,000
  • Term lengths: 36 – 72 months

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

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

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


  • Prequalify online with no credit inquiry

  • No fee to apply


  • Must complete your application at a participating dealer, which means a hard inquiry on your credit report

3) U.S. Bank

  • Rates: As low as 6.96%
  • Loan amounts: $3,000 – $100,000
  • Term lengths: 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


  • Quick approval, and your loan can be funded within 7 days

  • Loan minimum is lower than many others lenders require

  • Lower starting APR than many competitors


  • May charge an origination fee

How we chose the best auto loans

To find the best auto loans, our team analyzed the following:

  • APR
  • Loan terms
  • Better Business Bureau rating
  • Minimum and maximum borrowing limits
  • States available
  • Application and origination fees
  • Discounts

Each item’s weight varied depending on whether a traditional bank or an online lender offered the product.

Learn more about our ratings and methodology here.

What to look for in an auto loan

Before applying for an auto loan, knowing what to consider when selecting the right lender for your auto financing needs is important.

First, pay attention to the interest rate your lender offers. The interest rate dictates how much you’ll 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 look at qualification requirements, including minimum income, credit score, and vehicle requirements.

Borrowers should also review the financial institution’s strength in offering auto financing, along with the term length of the loan and payment options. Each factor determines how well the loan fits into your financial life.

How to get the best auto loan rates

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

  • Shop the loan and then the car. Get financing or a preapproval from an auto lender before heading to the dealership to focus on negotiating on the vehicle purchase.
  • 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’re in the best financial position to get an affordable car loan.
  • Look for an interest rate discount. Some financial institutions offer 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 you’ll pay over the life of the loan, and it may allow for a lower interest rate. 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, where the rate changes over time as broad interest rates move up or down. A fixed interest rate loan may be a better option for 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.

Car loan options exist for borrowers with almost any credit history, income, or vehicle financing needs. However, finding the right one can be challenging if you don’t know where to start. Be sure to shop around and consider your auto loan options before deciding.

Additional auto loan resources: