How Do You Get Prequalified For An Auto Loan
You can get prequalified for an auto loan online and without ever leaving your home. All you have to do is select one of the lenders on this list and choose its online option to get prequalified or apply for a loan. Many lenders let you get prequalified for an auto loan without a hard inquiry on your credit report.
How Do Auto Loans Work
Auto loans are typically secured loans that charge simple interest, interest calculated on your loan balance, over two to seven years. Your auto loan interest rate is determined by your , loan term and amount, along with the value of the car itself.
While many buyers shop for a car loan at the same time theyre shopping for a car, a better way is to compare annual percentage rates across multiple lenders to make sure youre getting a competitive rate.
If the dealer can beat it, youll know youre getting a fair offer.
Why you should compare auto loan ratesComparing loan rates before you buy a new or used car puts you in a stronger negotiating position at the dealership. This is true whether you have strong credit or need a car loan for bad credit. The lenders above are a good place to start your search.
What Else Affects My Interest Rate
Several factors affect the rate you can qualify for, including:
- You generally need to have a good credit score to get a competitive interest rate.
- Debt-to-income ratio. The lower your debt-to-income ratio is the better it is for you to qualify for the best credit union car loan rates.
- New vs. used car. New car loans tend to have lower rates than used car loans, regardless of your creditworthiness.
- Model and make of vehicle. The lowest APRs may be dependent on the vehicle. Some credit unions, like the Police Credit Union, offer interest rates on cars that are within four model years.
- Loan term. Often, credit unions offer higher starting interest rates for longer loan terms.
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Best For Green Vehicles: Suncoast Credit Union
Suncoast Credit Union
Suncoast Credit Union offers low rates to its members who are financing green cars. It also offers helpful financing tools and friendly customer service.
Rates starting at 3% for green cars
Offers additional resources including webinars
Only serves part of Florida
Suncoast Credit Union is Floridas largest credit union and has branches throughout Floridas west coast. In addition to car loans, it offers personal loans, mortgages, full banking services, and financial tools. It has an easy-to-use website with a lot of consumer educational material and financial calculators, as well as webinars and how-to blogs.
Suncoast Credit Unions auto loan rates start at 3% for green vehicles and 3.25% for other cars. You can also get financing for watercraft, recreational vehicles, and motorcycles as well as cars. Max terms are usually 72 months for cars.
It also offers a helpful chart that lists the starting rates for different types of vehicles and rewards its members with low rates for purchasing a green car, defined as an electric vehicle or a car with a combined EPA rating of 28 mph or better.
To join Suncoast Credit Union, you must meet its membership requirements: You must live, work, attend school, or worship in one of the counties in Southwest and the West Coast of Florida that it serves. It does require proof, such as a utility bill or a signed lease.
What Types Of Auto Loans Do Credit Unions Offer
- New car loans. Finance a new car from a dealership.
- Used car loans. Finance a used car from a dealership or private seller.
- Lease buyouts. Finance the balloon payment at the end of a lease.
- Car loan refinancing. Trade in your current car loan for a better deal.
- Motorcycle loans. Finance a new or used motorcycle, usually from a dealer.
- ATV loans. Finance an off-road vehicle, usually new.
- RV loans. Finance a camper or mobile home.
- Boat loans. Cover the cost of a new boat.
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How To Apply For An Auto Loan
Follow these general steps to apply for an auto loan:
How Do I Apply
The most common ways to apply for a DCU Auto Loan are through our online application or in a branch. If you are already a DCU member, you can submit your application within Digital Banking under Offers. This will allow you to streamline your application, because you wont be asked for any information we may already have. Additionally, you could check to see if you are already preapproved for an auto loan.
If you have questions or need assistance submitting an application, you can contact our Consumer Loan Call Center at 800.328.8797 then select Option 3.
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Can You Sell A Car With A Loan
It is possible to sell a vehicle when you still have a loan, but it adds a few extra steps. There are a few different options in this situation. One option is to pay off the loan in full before selling the vehicle, which involves contacting your lender to determine your payoff amount. After paying off the loan, your lender will release the lien.
You can sell a vehicle that’s financed without paying it off by selling it to a private buyer or trading it in with a dealer.
Do I Need To Have A Vehicle Selected Before I Apply For A Loan
Noyou do not need to have a vehicle selected before submitting your auto loan application. Some members choose to initiate their application before deciding on a vehicle, so that they know their exact budget and can complete the transaction quickly once they find the right one.
When you apply, you have the option to indicate you dont yet know the make and model of the vehicle. However, you will be asked to provide an estimate of your loan amount . If approved, your loan offer will be good for up to the stated amount pending verification of all required documents. When you finalize your loan, you can specify the exact dollar amount you wish to fund.
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How Do I Refinance My Car Loan
Refinancing a car loan is essentially just taking out a new car loan so the steps for applying are mostly the same. You’ll need your driver’s license, Social Security number and proof of income, as well as details about your car. If approved, you’ll use the funds from your new loan to pay off your old car loan, then begin making monthly payments with your new interest rate and terms.
Best Bank For Auto Loans: Bank Of America
Bank of America
- As low as 3.59%
- Minimum loan amount: $7,500
Bank of America auto loans come with the backing of a major financial institution. Low rates and a big selection of loan options make it a major competitor in the auto loan landscape. In J.D. Power’s 2021 Consumer Financing Satisfaction Study, which deals with auto loans, Bank of America ranked 5th out of 12 in its segment and scored equal to the average.
Offers new, used, and refinance auto loans
Transparent rates and terms online
Well-known financial institution
Restrictions on which vehicles it will finance
High minimum loan amount
Bank of America is a large financial institution offering a number of auto loan options, including new, used, refinance, lease buyout, and private party loans.
For the most creditworthy borrowers, APRs start at 3.59% for new vehicles. Used vehicle loans start at 3.79% APR, while refinances start at 4.79% APR. Customers of the bank who are Preferred Rewards members can get up to a 0.5% discount on their rate.
BofA provides a no-fee online application that it claims can offer a decision within 60 seconds. You can choose from a 48-, 60-, or 72-month term online, but there are additional options ranging from 12 to 75 months if you complete the application process at a branch or over the phone.
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What Are Car Loans And How Do They Work
Auto loans are secured loans that use the car youre buying as collateral. Youre typically asked to pay a fixed interest rate and monthly payment for 24 to 84 months, at which point your car will be paid off. Many dealerships offer their own financing, but you can also find auto loans at national banks, local credit unions and online lenders.
Because when you finance a car its a secured loan, they tend to come with lower interest rates than unsecured loan options like personal loans. As of July 27, 3033, the average APRs according to a Bankrate study are the following.
How Is My Rate Determined
Rates are determined by your personal credit history, loan term, account relationship, and payment method. Members may be eligible for a 0.50% discount by maintaining electronic payments on the loan and Plus or Relationship benefits on your DCU checking account. Rates and terms on loans for other types of vehicles, including mobility vehicles, will differ.
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What Is The Difference Between An Auto Loan And A Personal Loan
It’s possible to use a personal loan or an auto loan to finance a vehicle, but the two differ in some important ways:
- Purpose: Personal loans are unsecured or secured and can be used for many different purposes, including to finance a vehicle, pay for a vacation, or make improvements to a home. Car loans, however, are strictly to finance a vehicle and are secured against the vehicle you purchase. The vehicle serves as collateral.
- Interest rates: Because auto loans are secured, rates on car loans are generally lower than personal loans.
- Availability: Auto loans are typically easier to obtain than personal loans, especially for those with a poor credit history.
Schoolsfirst Federal Credit Union
SchoolsFirst Federal Credit union has partnered with companies like Autoland and Enterprise to bring customers exclusive savings. To become a member, you must be a current or retired school employee or part of their family.
Why it stands out: Along with all the different ways to save, SchoolsFirst also gives borrowers the option of requesting an auto convenience check, which will allow you to write a check for the vehicle at the dealer up to the approved loan amount. It also offers Guaranteed Asset Protection insurance with deductible assistance and options for no payments for 90 days.
- Offers a school employees auto loan with Summers Off, which allows qualifying members to defer one or two consecutive auto loan payments during the summer
- Allows you to finance a car from a private seller
- Make no payments for the first 90 days
- Summers Off program is only available on auto loans with original terms of 60 months or less
- Membership is restricted to members of educational communities
What to look for: SchoolsFirst Credit Union offers new and used auto loans from 36 to 84 months. APRs for new cars start at 2.49% and APRs for used cars start at 2.64%. Maximum loan amount is 100% of the MSRP or Kelley Blue Book Suggested Retail Value.
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How Long Does The Application And Funding Process Take
The timeline for application and funding can vary, depending on how quickly the required documentation is provided. In many instances, we are able to provide instant decisions on applications submitted through our online application. You will receive a notification if further review is needed to decision your application. Once you provide all of the documentation needed to finalize your loan, the check is usually delivered by FedEx within 2-3 business days.
Compare The Best Auto Loan Rates
|LightStreamBest Online Auto Loan||3.99%* with Auto Pay & Excellent Credit||$5,000 to $100,000|
|Bank of AmericaBest Bank for Auto Loans||3.59%|
|Consumers Credit UnionBest Credit Union for Auto Loans||2.49%|
|Chase AutoBest for Used Cars||Not Advertised|
|myAutoloanBest for Bad Credit||1.90%|
|CarvanaBest for Fair Credit||Not Advertised||Any Car They Are Selling||36 to 72 months|
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Navy Federal Credit Union
Navy Federal Credit Union offers excellent car loans for financing new cars with terms up to eight years. You can join if you are affiliated with the military, Department of Defense, Coast Guard or National Guard.
Why it stands out: Borrowers can expect convenience while applying for a loan online and if they receive a preapproved loan, Navy Federal will issue a check for the loan amount. Other benefits available to members include access to GAP guaranteed auto protection insurance.
- New vehicle terms up to eight years
- Starting APRs under 3% for both new and used vehicles
- You or one of your family or household members must have military ties to join.
What to look for: Navy Federal offers starting APRs as low as 2.79% for new vehicles and 2.89% for late-model used vehicles with terms up to 96 months for new vehicles and 72 months for used. Auto loan preapproval checks and interest rates are good for 90 days from the approval date.
What Difference Does 1% Make
Aug 2022 | Auto Loan, Featured, Financial Education
When getting a new loan, the first thing most people do is shop around for rates. But does a slightly better rate actually save you that much throughout the life of the loan? Lets find out.
Depending on your term, principle, and down payment, a 1% difference in rates could save you thousands of dollars.
For example, say you are purchasing a new $40,000 car with a 6-year term. At a rate of 4.24% APR, your monthly payment is $630 and you will pay a total of $5,373 in interest. At a rate of 3.24% APR, your monthly payment is $612 and you will pay a total of $4,067 in interest. That means not only is your monthly payment lower, but throughout the life of the loan, you will save $1,306 in interest!
Now, lets break that down a little more. At the lower rate, youre saving $186 per year, and about $15 per month on interest payments. After breaking down the savings, it is up to you to decide whether it is worth it to potentially have to open an account with a new financial institution, or possibly go through the slight effort to set up a new direct deposit.
Again, lets break it down a bit. At the lower rate, you will save $1,241 per year and $103 per month! Think about all the smores ingredients you could buy and enjoy in your new RV with that savings.
Clearly a 1% rate difference can save you a significant amount throughout the life of the loan.
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Easiest To Join: Nasa Federal Credit Union
NASA Federal Credit Union
NASA Federal Credit Union may have an intimidating name, but it has easy membership requirements, competitive rates, and some great member perks.
No payments for the first 60 days
Only offers branches in the D.C. area
Lower fees only available for shorter term loans
NASA Federal Credit Union is open to NASA employees, NASA retirees, and their family members. However, you dont have to be a world-class scientist to enjoy membership. It also offers membership to non-employees who join the National Space Society, and the first year is complimentary. After that, your membership will cost $47 a year with automatic renewal. Membership includes their magazine, the latest information on space news, and invitations to conferences and events.
NASA Federal Credit Union offers new and used auto loans and recreational vehicle loans. Auto loan rates start at 3.64%, and although there is no payment due for the first 60 days, interest does accrue. The lowest rates have terms up to 36 months. Longer terms up to 84 months are available, but the rates do increase. You can apply online in a few minutes. You can also reach customer service through email, online chat, and over the phone.
What To Know Before Applying For An Auto Loan
When looking for a car loan, it’s best to shop around with a few lenders before making your decision. Each lender has its own methodology when reviewing your application for a loan and setting your interest rate and terms.
Generally, your credit score will have the biggest effect on the rates offered. The higher your credit score, the lower APR you’ll receive. Having a higher credit score may also allow you to take out a larger loan or access a broader selection of repayment terms, but there are still ways to finance a car with bad credit. Choosing a longer repayment term will lower your monthly payments, although you’ll also pay more interest overall.
If you find a few lenders that you like, see if they offer preapproval going through this process will let you see which rates you qualify for without impacting your credit score.
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