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Auto Loans

RoadLoans Review: Benefits and Risks

If you’ve ever been in the market for a vehicle, you know how difficult it can be to secure financing—particularly if your credit is less than stellar. Traditionally, many buyers finance directly through dealerships, but high-pressure sales tactics can leave some consumers wondering if they got a good deal. In the age of the internet, there are more options than ever before for borrowing money—including finding the best auto loans.

One such alternative is RoadLoans, a direct-to-consumer lender based in Dallas. Established in 2000 by Triad Financial Corporation, RoadLoans is now owned and operated by Santander Consumer USA. It offers online car loans with no credit requirements, which may make it attractive for borrowers with poor credit. However, given its low lending requirements, interest rates on RoadLoans auto loans tend to be relatively high—making them an expensive proposition for many borrowers.

This RoadLoans review will cover the benefits and risks of this company, as well as everything in-between.​

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How Do RoadLoans Auto Loans Work?

RoadLoans offers two primary products: loans for new and used cars and refinancing of existing car loans. Applicants must meet certain qualifications in order to borrow money from RoadLoans.

This lender has no credit requirements. Applicants must live in any state other than Alaska, Hawaii, New Hampshire, Mississippi, or Nevada. In addition, applicants must be at least 18 years old and make a minimum of $1,800 per month.

What Types of Car Loans Does RoadLoans Offer?

Borrowers can take out a fixed term loan to buy a new car from a dealership. They can also obtain a term loan for a used vehicle that they purchase through a dealership. However, this vehicle must have no more than 120,000 miles on it and can be no more than nine years old.

RoadLoans also allows borrowers to purchase cars from private individuals. These types of loans are limited to cars with up to 100,000 miles and up to 12 years old.

Finally, RoadLoans offers two types of refinancing: basic loan refinancing and cash-back refinancing. For car refinancing, RoadLoans allows borrowers to obtain a new loan with a lower interest rate and better terms. This option is available only for cars with up to 105,000 miles and up to 7 years old. A cash-back refinancing deal is a process by which borrowers can take out a new loan to pay off the balance on their original loan, and then receive the difference between their car’s original value and the loan amount in cash. Cash-back refinancing is only available in certain states.

Basic Information

The minimum loan amount for a RoadLoans auto loan is $5,000, while the maximum is $75,000. Interest rates for RoadLoans products vary depending on the credit history of the applicant. However, all interest rates are fixed for the life of the loan. The interest rate for a RoadLoans car loan may be as low as 1.99% APR—but it may also reach as high as 25% APR. There are no prepayment penalties for paying off a RoadLoans auto loan early.

The Benefits

The primary benefit of a RoadLoans auto loan is that there is no credit requirement. Anyone, regardless of their credit score, can qualify for a loan if they meet the basic income requirements and live in a state that permits these loans. That makes RoadLoans a good choice for borrowers with bad credit who need to finance a vehicle. RoadLoans also does not charge certain fees, including late fees or prepayment fees.

The borrowing process is quick and easy, with applicants able to apply online with just a few clicks. RoadLoans will also set up an appointment with a dealership to help borrowers get their vehicle. Their customer service receives high marks and includes a toll-free number and online chat options.

The Risks

While RoadLoans car loans do have benefits, there are also risks—including incredibly high interest rates for borrowers with poor credit. RoadLoans does not provide information about its potential rates online, only stating that rates could be as low as 1.99% APR. Online reviews of RoadLoans auto loans reveal many consumers who have interest rates of over 25% APR. If you have poor credit, you can expect to pay a high interest rate for a RoadLoans auto loan.

In addition, RoadLoans is only offered in some states, and can only be used at certain dealerships. Even if you are approved for a loan—which is not guaranteed—you may not be able to use your funding at the dealership of your choice. Finally, RoadLoans only permits borrowers to have one auto loan or refinanced loan at a time.

How Does RoadLoans Compare to Others?

Compared to other lenders, RoadLoans is unique in that it offers car loans directly to consumers instead of through another financing source (which is typical of car dealerships). It is an online-only lender, that focuses on people with poor or no credit, unlike many other financial institutions.

While RoadLoans may offer the opportunity for borrowers to obtain financing, it does so at the cost of potentially high interest rates. It also is not transparent about its interest rates, loan terms, and conditions, which stands in contrast to most lenders. For these reasons, borrowers should be cautious before applying for a RoadLoans auto loan.

You can compare bad credit auto loans here at LendEDU for no cost.​