Best Auto Loans of July 2025: Compare Rates and Terms

Buying a car should be exciting—a new set of wheels and nothing but the open road. But navigating down payments, interest rates, and trade-ins can be overwhelming. To simplify the process, we’ve analyzed 14 lenders to determine the best auto loans for new and used vehicles.

Consider the following lenders if you’re ready for a new daily driver.

Table of Contents

1. Reviews of the best auto loans
   1. LightStream
   2. Southeast Financial Credit Union
   3. MyAutoLoan
   4. CarMax
   5. Autopay
   6. Carputty
   7. Navy Federal Credit Union
   8. U.S. Bank
   9. PNC
   10. Alliant Credit Union
   11. Bank of America
2. Local banks and credit unions
3. How does an auto loan work?
4. What type do you need?
5. How to choose
6. Improve your approval odds
7. How to apply
8. How to manage your auto loan
9. How tech affects auto loans
10. Current economic conditions and auto loans
11. EV discounts
12. FAQ

Reviews of the best auto loans

Here’s a summary of our recommendations for the best auto loan lenders:

• Best overall: LightStream
• Best for low rates: Southeast Financial Credit Union
• Best for comparison shopping: MyAutoLoan
• Best for used cars: CarMax
• Best for bad credit: Autopay
• Best for lifetime financing: Carputty
• Best for military families: Navy Federal Credit Union
• Best for quick online application: U.S. Bank
• Best for pre-secured financing: PNC
• Best rate discount: Alliant Credit Union
• Best for rate lock: Bank of America

LightStream

Best Overall

4.7 _/5

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What we like about LightStream

LightStream offers car loans the way they should be: no restrictions on the vehicle, same-day funding, and cash in pocket when you stroll into the dealer (or meet a private seller) to make the process fast and easy. Without a doubt, LightStream offers the best car loans for most buyers, if you can qualify.

• No restrictions on vehicle model, age, or mileage
• Cash deposited into your account so you can negotiate with the seller
• Fast funding (even same day as application)
• Up to $100K in financing

• Higher max interest rate
• Need good to excellent credit
• No prequalification available

Rates (APR)	7.24% – 15.19%
Loan amounts	$5,000–$100,000
Term lengths	2–7 years

Eligibility requirements

• Minimum credit score: Good to excellent
• Available in all 50 states

Southeast Financial Credit Union

Best for Low Rates

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What we like about Southeast Financial

Southeast Financial Credit Union offers some of the most competitive interest rates on auto loans (as low as 3.50% for new cars). The world (or, in this case, the car lot) is your oyster: There are no model year or mileage restrictions. 

Unlike some credit unions, joining Southeast Financial isn’t too challenging. You can join by donating $5 to Autism Tennessee.

• No vehicle restrictions
• Low interest rates
• Loans available for other vehicles
• No payment for up to 90 days

• Stricter membership requirements than other lenders
• Lowest rates require a 12-month loan term
• Physical branches only in Tennessee, Kentucky, or Mississippi
• Longer loan application and approval timeline
• No prequalification available

Rates (APR)	Starting at 3.50%
Loan amounts	Max not disclosed; minimum $12,000 financed for 6- and 7-year loans
Term lengths	1–7 years

Eligibility requirements

• Must become a member of the credit union
• Minimum credit score not disclosed

MyAutoLoan

Best for Comparison Shopping

4.8 _/5

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What we like about MyAutoLoan

MyAutoLoan is a great place to start if you want to see a handful of options for your new or used car loan. You input some basic information, and the online car loan marketplace will show you up to four offers based on your credit profile. MyAutoLoan can help you find options for motorcycle loans, lease buyouts, and auto loan refinancing.

• Compare multiple lenders in one spot
• Also available for motorcycles, lease buyouts, and refinancing
• Fast process (you could see options within minutes)

• Potential for hard credit inquiry
• Only shows up to 4 lenders (may not see best offers)
• Vehicle age and mileage restrictions

Rates (APR)	Starting at 6.49%
Loan amounts	$8,000–$100,000
Term lengths	24–72 months

Eligibility requirements

• Minimum credit score: 600
• Minimum income: $1,800/month
• Not available in Hawaii or Alaska

CarMax

Best for Used Cars

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What we like about CarMax

If you’re buying a car through CarMax, in-house financing might be the best option. You can get a loan for as little as $500, and you can apply in person or online, with a decision in as few as five minutes. While CarMax doesn’t specify its credit score requirements, the website says the company “accommodates most credit profiles.” You can add a co-buyer (cosigner) to improve your approval odds or score a lower rate.

• Loans as small as $500
• Potentially available to borrowers with fair or worse credit
• Easy application
• Prequalification available

• Rates not published online
• Only available for CarMax purchases
• No negotiating on vehicle price

Rates (APR)	Not disclosed
Loan amounts	$500–$100,000
Term lengths	3–6 years

Eligibility requirements

• No CarMax locations in Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia, or Wyoming
• Minimum credit score not disclosed

Autopay

Best for Bad Credit

4.1 _/5

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What we like about Autopay

Autopay offers the best car loans for bad credit. Like MyAutoLoan, Autopay is a marketplace for auto loans, with options for borrowers who have bad credit. While Autopay doesn’t share credit score requirements, its website states that it works “with people across the credit spectrum” and has “solutions for all credit profiles.” You can add a co-applicant (cosigner) to improve approval odds and get lower rates.

• Options available for bad-credit borrowers
• Cosigner option available
• Prequalification without credit impact

• Not transparent about requirements
• Not transparent about fees

Rates (APR)	Starting at 4.67%
Loan amounts	$2,500–$100,000
Term lengths	2–8 years

Eligibility requirements

• Requirements vary by lender
• Limited information available online before applying

Carputty

Best for Lifetime Financing

4.6 _/5

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What we like about Carputty

Carputty is a unique way of financing a vehicle—or multiple vehicles. Instead of getting a lump-sum loan for one car, you can apply for a line of credit to finance vehicles as needed. The max credit line available is $250,000, with a max of 15 cars and a requirement of $10,000 to $150,000 for each car. You can use Carputty for buying new and used, refinancing, and buying out a lease.

The big caveat? Carputty charges more fees than average, and you might be tempted to buy more than you need.

• Flexible line of credit when you need it
• Helpful for families with multiple drivers
• Credit lines up to $250K
• Competitive starting interest rates
• Prequalification available

• May incentivize buying more cars than you need
• Vehicle age and mileage restrictions
• High credit score requirements
• 1% fee for each car added
• $250 car removal fee

Rates (APR)	4.33% – 12.00%
Loan amounts	$25,000–$25,000 line of credit; $10,000–$150,000 per car
Term lengths	63-month initial term

Eligibility requirements

• Minimum credit score: 680
• Not available in Alabama, California, Delaware, Indiana, Louisiana, Mississippi, Nevada, Rhode Island, Vermont, or Washington

Navy Federal Credit Union

Best for Military Families

4.2 _/5

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What we like about Navy Federal

Navy Federal Credit Union is the best auto loan choice for military families, thanks to rate discounts for active duty and retired military. Rates start as low as 4.09%, you can get an approval decision in a matter of minutes, and preapprovals are good for 90 days, meaning you won’t be rushed to purchase.

• Rate discounts for military members
• Long preapproval
• Fast and easy application
• Ability to shop for cars on the Navy Federal platform

• Credit union membership only available to military families
• High minimum loan amounts ($30K) for longer loan terms (85 – 96 months)
• No prequalification available (preapproval requires hard credit check)
• No direct deposit for loan funding; either mail or branch pickup

Rates (APR)	Starting at 4.09%
Loan amounts	Up to 100% financing
Term lengths	1–8 years

Eligibility requirements

• Membership limited to military families
• Minimum credit score not disclosed

U.S. Bank

Best for Quick Online Application

4.1 _/5

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What we like about U.S. Bank

U.S. Bank offers an easy online application you can complete in minutes (with an approval decision in seconds). Plus, the website has an easy-to-use dealership search to make sure financing is good at your preferred dealer.

• Easy online application with same-day preapprovals
• Smaller loan amounts ($5K) available)
• Lease buyout and refinancing available

• Not super competitive rates
• Refinancing and lease buyouts not available in every state
• Prequalification not available

Rates (APR)	Starting at 6.58%
Loan amounts	$5,000–$100,000
Term lengths	1–6 years

Eligibility requirements

• Minimum credit score: Good to excellent (800+ needed for best rates)

PNC

Best for Pre-Secured Financing

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What we like about PNC

PNC offers “check-ready auto loans”—secured financing before heading into the dealership for the specific vehicle you want. Going to the dealership with financing secured lets you shop like a cash buyer, which gives you more negotiating power. PNC also offers a 0.25% rate discount if you set up automated payments from a PNC checking account.

• Secure financing before going to dealer
• Rate discount for autopay
• Easy and fast online application

• Vehicle age and mileage restrictions
• Check-ready loans limited to eligible dealerships
• No prequalification available

Rates (APR)	5.59% – 19.94% w/ autopay discount
Loan amounts	$7,500–$75,000
Term lengths	Varies by model year

Eligibility requirements

• Only available in 28 states + D.C.
• Minimum credit score not disclosed

Alliant Credit Union

Best Rate Discount

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What we like about Alliant

You can get 0.50% knocked off your interest rate with the Alliant Credit Union Car Buying Service, which lets you search for new and used vehicles on Alliant’s website. Plus, you can get a 0.40% discount for autopay. Though it’s a credit union, becoming a member is easy—just join the Alliant Credit Union Foundation. (Alliant will pay your one-time $5 fee.)

• 0.50% rate discount for shopping through Alliant
• 0.40% rate discount for automatic payments
• Fast and easy process with same-day approval
• Lease buyouts and refinancing available

• Available to credit union members only
• Loan amounts not disclosed on website
• No prequalification available

Rates (APR)	Starting at 5.34% (w/ autopay discount)
Loan amounts	Not disclosed
Term lengths	1–8 years

Eligibility requirements

• Loans restricted to members
• Minimum credit score not disclosed

Bank of America

Best for Rate Lock

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What we like about Bank of America

Bank of America lets you get preapproved and locks in your rate for 30 days. Auto loans through BoA are especially good for customers with an account: Only customers can get prequalified and access rate discounts.

• Great interest rate discount for Preferred Rewards members
• Easy online application
• Rate locked for 30 days

• Prequalification only available for BoA customers
• High minimum loan amount
• Vehicle age, mileage, and value restrictions

Rates (APR)	Starting at 5.64%
Loan amounts	Starting at $7,500
Term lengths	4–6 years

Eligibility requirements

• Rate discounts and prequalification restricted to BoA customers
• Minimum credit score not disclosed

Local banks and credit unions

Online lenders and big banks and credit unions may offer some of the best auto loans, but don’t write off local lenders, like community banks and credit unions. It’s worth getting prequalified with a couple of online lenders and comparing their offers to the rates you’d get from your local bank or credit union.

In some cases, your community financial institutions may be just as competitive, and you can visit physical branches to get customer support in person.

How does an auto loan work?

An auto loan is an installment loan secured by the vehicle itself. The lender will give you a lump sum to cover the cost of the car, and you’ll make monthly payments, including interest, over time to pay it off. If you fall behind on your payments, the lender can repossess your car to protect itself against a loss.

I generally recommend buying a car with cash if possible. When financing is needed, we first assess the client’s vehicle needs—such as usage, family size, and preferences—and match them with a monthly payment that fits their budget.
I typically advise a 48-month loan to balance affordability and limit interest. However, longer terms may make sense if needed for cash flow. In every case, we carefully weigh total interest costs and the risk of negative equity, since cars depreciate over time.

Most lenders typically use your FICO Auto Score (rather than a traditional credit score from FICO or VantageScore) to determine your creditworthiness. A few nuances make this credit score different, but you can generally use your traditional credit score to evaluate your chances of approval.

If you’re approved for an auto loan, these are important elements to note:

• Loan amount: This is how much you’re borrowing from the lender. You can keep this cost down by making a larger down payment and trading in your current car.
• Annual percentage rate (APR): The APR is the effective interest rate on the loan. This is the main way the lender makes money when lending to you. (Lenders may also make money through fees, such as origination fees, late fees, and early payoff penalties.)
• The loan term: This is how long the auto loan lasts, often in 12-month increments. Car loans tend to range from 36 months (three years) to 72 months (six years), but some loans can be shorter or longer. The longer the loan, the more you’ll pay in interest.

What type of auto loan do you need?

• New car loans: Available through dealerships, banks, credit unions, or online lenders. Terms can stretch up to 96 months, but longer loans increase total interest and the risk of owing more than the car’s value as it depreciates.
• Used car loans: Used car loans often carry slightly higher interest rates due to added risk. They’re generally cheaper overall, but consider the car’s age, mileage, and maintenance history.
• Private party loans: These loans help finance vehicles bought from individuals. Some lenders require vehicle inspections or sale documentation. Be sure the title is clean before buying.
• Lease buyout loans: At the end of a lease, you can buy the car using a lease buyout loan. The loan covers the vehicle’s residual value, but terms may differ from standard auto loans—check the details before proceeding.

How to choose the best auto loan

Avoid financing a vehicle that exceeds your current financial capacity. A good rule of thumb is that if the monthly payment on a 4- to 5-year loan is unaffordable, the vehicle is likely beyond your budget. In that case, it’s wise to explore more affordable options that align better with your financial situation. 

• Interest rate: Even small rate differences can mean big savings. Compare offers from at least three lenders to find the most affordable option.
• Loan amount: How much you can borrow depends on your income, credit, and down payment. Don’t forget to budget for taxes, insurance, and registration.
• Loan term: Typical terms range from 36 to 72 months, but some stretch to 84. Longer terms lower monthly payments but increase total interest.
• Fees: Watch for origination, late, or prepayment fees—these can add up and affect the true cost of the loan.
• Down payment: A larger down payment lowers your loan amount, monthly payment, and total interest. Trade-ins can also help boost your down payment.

How to improve your approval odds

Boost your credit score

Your credit score plays a major role in loan approval. To raise it, pay bills on time, reduce credit card balances, and pay off existing debt when possible.

Apply for a smaller loan

Lenders are more likely to approve a smaller loan. You can reduce the amount by:

• Choosing a more affordable car
• Making a larger down payment
• Trading in your current vehicle

Add a cosigner

A creditworthy cosigner can improve your approval chances and help you secure better terms. Just remember: If you miss a payment, their credit is also at risk.

How to apply for an auto loan

1. Check your credit and budget

Know your credit score before applying—bad credit can mean higher rates or loan denial. Also, review your budget to decide how much you can afford each month, factoring in gas, insurance, and potential repairs.

2. Compare lenders

Don’t go with the first offer. Shop around and prequalify with several lenders to compare rates, fees, and loan terms—all without hurting your credit.

3. Get preapproved

Preapproval gives you a loan offer and a rate upfront. It also boosts your bargaining power at the dealership. Just note that it involves a hard credit check.

4. Choose your car and finalize the loan

Test-drive vehicles in your price range. Once you agree on terms with a seller, use your loan to make the purchase. Set up an account with your lender to manage payments going forward.

Tips to manage an auto loan

• Set up autopay: Enroll in automatic payments to avoid missing due dates, and check your account monthly to ensure sufficient funds.
• Make extra payments toward the principal: If your loan allows it without penalties, paying extra toward the principal can help you pay off the loan faster and reduce interest.
• Read the fine print: Check for early payoff penalties. If none apply, paying off your loan early could save you money—unless you’re using the loan to diversify your credit mix.
• Refinance if rates drop: If interest rates fall or your credit score improves, consider refinancing to lower your rate and save over the life of the loan.

How tech affects auto loans

New technology, including AI advancements, can make securing an auto loan much easier. You can apply for loans, upload documents, and sign on the dotted line without leaving your computer. Many lenders use blockchain technology to complete these loan applications and keep borrowers’ information safe.

It’s also easier than ever to compare lenders. MyAutoLoan gives you four lending options in just minutes. In the past, getting quotes from several lenders could take days or weeks.

Ultimately, new technology is making auto lending much more convenient and accessible. A drawback is that consumers lose the face-to-face relationships with bankers that were more commonplace a decade ago. However, many tech-savvy consumers prefer the ease of securing financing online.

How current economic conditions affect auto loans

Our research indicates that higher car prices, higher interest rates, inflation, car insurance costs, and increased consumer debt have all contributed to increases in car loan delinquencies in 2025.

Can I get discounts or incentives for electric vehicles?

Sure. You can use a green auto loan, a specific type of loan for purchasing low-emission cars. These loans typically have flexible terms and reduced interest rates compared to traditional auto loans.Depending on where you live, tax benefits, credits, or rebates might be available for purchasing an EV.

FAQ

What are the advantages and disadvantages of opting for a longer-term car loan?

Longer-term car loans can make monthly payments more affordable due to extended repayment periods. This can ease budget strains, especially if you need to balance other financial responsibilities. However, it often results in higher overall interest costs since you’re paying interest for longer. 

You might also end up owing more than the car is worth, particularly if the vehicle depreciates faster than anticipated. Consider your immediate budget and the total cost over the loan’s life span.

What should I look for in the fine print of car loans to avoid unexpected fees or terms?

When reviewing car loan fine print, check for prepayment penalties, which can inhibit your ability to pay off the loan early without incurring additional fees. Look at the interest rate type to ensure it’s fixed rather than variable, which can fluctuate. 

Examine any additional fees, such as documentation fees or early termination charges. Understand the total cost of the loan, including interest, fees, and monthly payments, to avoid surprises.

Can I negotiate better terms or auto loan rates?

Absolutely. Negotiating auto loan terms and rates can save you money. Research prevailing rates beforehand to understand what constitutes a fair offer. Discuss interest rates, loan terms, and additional fees with the lender. 

Sometimes, showing a willingness to obtain financing from another lender can prompt better offers. Remember, everything from the loan rate to the loan term length is potentially negotiable.

How can leasing a car compare to taking out an auto loan?

Leasing can be more cost-effective for those who prefer driving new cars every few years without committing to ownership. Lease agreements often have lower monthly payments than loan payments. However, leasing includes mileage limits and potential excessive wear and tear fees. Leasing may be better for those who don’t drive extensive distances, desire lower payments, or enjoy the latest car models.

What is gap insurance, and do I need it?

Gap insurance covers the difference between the car’s value and the amount you owe on your auto loan if the vehicle is totaled or stolen. If you owe more than the vehicle’s depreciated value, gap insurance can save you from paying out-of-pocket to cover that gap. It’s essential if you make a minimal down payment, take a long-term loan, or drive a vehicle that depreciates quickly.

How we selected the best auto loans

Since 2018, LendEDU has evaluated auto loan companies to help readers find the best auto loans. Our latest analysis reviewed 322 data points from 14 lenders and financial institutions, with 23 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These data points are organized into broader categories, which our editorial team weights and scores based on their relative importance to readers. These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Higher star ratings are awarded to companies that create an excellent borrower experience and seamless transition from fund disbursement to vehicle purchase. This includes offering online eligibility checks, cost transparency, competitive interest rates with no fees, and unique benefits that support borrowers throughout repayment.

Recap of the best auto loans