Selecting the best auto loan lenders might be just as crucial to car-buying as finding the ideal vehicle. It’s not as simple as going to the dealership on your own. You should browse around for an auto loan to see what financing options are available to receive the best interest rate. You may end up paying extra for the identical car due to dealerships frequently marking up loan proposals from lenders’ interest rates.
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Remember when you begin shopping that your local small bank or credit union may also be a fantastic option to secure a loan. Although they often serve a very small geographic area, these institutions frequently provide lower automobile loan interest rates than those of large banks. The ten best auto loan lenders for 2023 are shown below.
Best Auto Loan lenders in 2023
1: Southeast Financial: Best starting auto loan rates
APR: 1.00% to 6.00%
Min. credit score: Unspecified
Loan term:12–84 months
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Loan amount: A minimum of $12,000 for 72 and 84month terms
Why we choose it: Southeast Financial Credit Union is one of the best auto loan lenders with the lowest starting rates. Additionally, financing is available for motorbikes and powersports vehicles. Membership in the credit union only requires a $5 minimum commitment to Autism Tennessee.
Where it might fall short: Southeast Financial is a smaller credit union with fewer physical facilities for in-person transactions. It doesn’t refinance its loans.
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2: Navy Federal Credit Union: Best for those with military connections
APR: From 4.54%
Min. credit score: 650
Loan term: Used car loans have 12 to 72 months, whereas new car loans have 12 to 96 months.
Loan amount: $250 to $500,000
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Why we choose it: The credit union runs a car-buying facility and provides loans for new and used cars and a refinancing option. Throughout the entire process of buying an automobile, this gives borrowers advice and resources, such as access to car history records and insurance discounts.
Where it might fall short: It charges late fees. Direct deposit funding is unavailable, and you must be a member of the credit union to finalize the loan.
3: PenFed Credit Union: Best for a car-buying service
APR: New car loans start at 4.59%; used car loans start at 5.54%; loans outside this service start at 5.39% (new car loans) or 6.04% (used car loans).
Min. credit score: Not disclosed.
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Loan term: 36 to 84 months.
Loan amount: $500 to $150,000
Why we choose it: PenFed offers auto loans between $500 and $150,000 with periods ranging from 36 to 84 months, making them a viable choice if you only need to finance a small sum. It offers auto loans for both new and old cars, as well as auto refinancing.
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Where it might fall short: It Charges a late payment fee and does not say the minimum credit score needed to qualify.
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4: Consumers Credit Union: Best for used car buyers
APR: Start at 5.24% for new vehicles and 6.54% for older vehicles.
Min. credit score: Not specified.
Loan term: 36 to 84 months.
Loan amount: $250 to $100,000.
Why we choose it: Although its new car loan rates are quite low, its auto loan rates for vehicles built before 2021 are average for the market. Additionally, Consumers Credit Union provides a lot of flexibility, having the broadest selection of loan terms and quantities among the service providers we looked at.
Where it might fall short: You must join the credit union to finalize the loan. Membership requires a $5 fee, and it charges late fees.
5: Bank of America: Best for those who prefer a bank
APR: New: Starts at 5.49%, Used: Starts at 5.69%, Refinance: Starts at 6.49%, and Lease Buyout: Starts at 6.29%,
Min. credit score: Not specified.
Loan term: Loan terms are between 12 months and 75 months.
Loan amount: $7,500 loan minimum, up to $150,000 loan limit
Why we choose it: Bank of America is one of the best auto loan lenders that offers a loan for you if you’re interested in purchasing the vehicle, you’re currently leasing but need a loan. Bank of America provides a range of auto loans with reasonable interest rates.
Where it might fall short:The high minimum loan amount and the Rate discounts require you to be a Bank of America member.
6: LendingArts: Best auto refinance rates
APR: From 5.44%
Min. credit score: Unspecified
Loan term: Up to 60 months
Loan amount: Unspecified
Why we choose it: LendingArts is one of the best auto loan lenders offering purchase and refinancing loans for RVs and powersport vehicles.
Where it might fall short: Apply to the lender directly if you have a particular refinance lender in mind, such as a local credit union, as LendingArts does not list its lender partners available to the public. Additionally, LendingArts isn’t very open about the terms of loans, such as the available loan amounts or the minimum credit score.
7: Capital One: Best prime and subprime rates
APR: From 5.79%
Min. credit score: 540
Loan term: 36–72 months
Loan amount: $7,500 to $50,000
Why we choose it: One of the best auto loan providers is Capital One, which provides auto refinancing loans ranging from $7,500 to $50,000 but with an undisclosed term. However, the bank provides prequalification for its auto refinancing loans, which won’t affect your credit.
Where it might fall short: It does not disclose the length of loan terms available. Has a low maximum loan amount and can’t refinance a Capital One auto loan.
8: LightStream: Best for unsecured car loans
APR: Starting at 6.49% with AutoPay and excellent credit
Min. credit score: 660
Loan term: Offers terms from 24 to 84 months
Loan amount: $5,000 to $100,000
Why we choose it: It is one of the best auto loan lenders for unsecured loans. Unlike many auto lenders, LightStream doesn’t need a down payment, and you can apply for the whole amount required. The borrower is not subject to any vehicle restrictions imposed by LightStream. Regardless of the year, make, model, or mileage; you can still be eligible.
Where it might fall short: There is no prequalification process. You must have good to excellent credit to qualify.
9: Carvana: Best for an online experience
APR: Starting at 6.85% (used cars only)
Min. credit score: undisclosed
Loan term: 36 to 72 months
Loan amount: Not specified
Why we choose it: Carvana provides auto loans for automobiles you purchase through the website, and it is best known for its online used car purchasing experience. Additionally, the buying and financing processes are combined under Carvana’s entirely online approach, which makes buying a used automobile quite simple.
Where it might fall short: You cannot buy a car from any other seller using the financing offer you received via Carvana.
10: Digital federal credit union (DCU): high-yield savings accounts.
Min. credit score: DCU does not disclose this information
Loan term: Loan terms range from 36 to 84 months.
Loan amount: $2,500 to $500,000
Why we choose it: DCU is one of the best auto loan lenders that offers auto loans that can be used to refinance, buy new or old automobiles, refinance motorbikes, buy antique cars, buy recreational vehicles, or modify cars for people with disabilities. Additionally, there are a few rate concessions available to borrowers. These include a 0.50% discount for members with relationship or plus benefits and an additional 0.25% discount for energy-efficient automobiles.
Where it might fall short: You must join the credit union to finalize the loan, and it charges late fees.
Conclusion
Depending on your loan’s purpose, sum, duration, and credit profile, your loan’s terms, including APR, may change. To be eligible for the best rates, you must have excellent credit. Comment below with your thoughts on the best auto loan lenders.
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