A Comprehensive Guide to Competitive Auto Loans in 2019

A Comprehensive Guide to Competitive Auto Loans in 2019

Buying a car is a special event in anyone’s life. You can typically pay your new car in one of two ways – you can either use your savings to pay in cash, or you can seek an auto loan.

Now, we all wish that we had ready funds to cover the expense of a vehicle. However, pressing financial needs and liabilities often make it difficult to pay full amount upfront in cash. Auto loans are useful in these types of moments, especially if you are aspiring to upgrade yourself to a bigger and better model.

The good news is that there are a number of auto loan options for you to choose from, regardless of your credit score.

There are several fantastic lenders in all categories ranging from traditional to online lenders who will compete to offer you an auto loan that matches with your requirements. There are a few lenders that specialize in lending to bad credit borrowers as well. Take a look at our latest top picks for the best auto loans in 2018 to get started on your options.

Recommended Auto Lenders if You Have Good Credit

CarsDirect

If you want an easy auto loan provider that can cater to all your needs then CarsDirect is for you. They are a one-stop-shop and have helped over 5 million customers in nearly 20 years.

The application process is extremely simple and can be completed in less than 60 seconds. On submission of the application you shall get multiple loan options from various lenders. This is extremely beneficial as it helps you compare multiple loan products with just one application.

Getting contacted by various lenders might be a little frustrating, however it works out in your favor as there is actually no limit on borrow amount through CarsDirect.

You can even purchase a new car through CarsDirect. They have ties with multiple lenders that allow you to find an auto loan product that completely matches your criteria.

Benefits of Choosing CarsDirect for an Auto Loan

  • No-fee serviceThere is no fee that you have to pay. CarsDirect earns via the lenders who want to be part of the network.
  • More flexible lendersYou can always find better terms and negotiating room with a dealership as compared with traditional lenders who are with credit unions and banks.
  • Can save you timeFinding lenders that offer decent deals on bad-credit loans can be a highly time consuming process. With CarsDirect you can save up massive amounts of time.
  • Even bad credit is OKThere is no hard credit check carried out by lenders. Your auto loan terms and rates are decided on your monthly expense and debt-to-income ratio.

MyAutoLoan

If you are looking for something that is a straightforward plan like refinancing an existing loan, purchasing a third party loan or getting a lease buyout then MyAutoLoan is your go-to option as they have many different kinds of loan products.

There are a number of interesting handy tools like interest rate charts that are provided by MyAutoLoan to make comparing and choosing a loan product easy.

A customized interest rate on basis of your zip code, credit score, loan amount, and category can be found which proves useful in calculating the budget amount for a new car.

The auto payment calculator can be used to determine estimated monthly installments once you have an approximate interest rate. However, your monthly income should be at least $1,800 and minimum loan amount should be $8,000.

Choose MyAutoLoan if You:

  • Want to fill out a single application for multiple loan products.
  • Do not have great credit scores. If you have average credit scores then shopping around for the best rates becomes doubly necessary.
  • Do not mind being contacted by multiple lenders and are a serious auto loan shopper – kind of like Jack Bauer is serious about protecting America and Optimus Prime is serious about defeating Decepticons – though this is another topic!

LendingTree

LendingTree has multiple auto loan offers and will let you compare various products as well. You can use this spot to find new options, used cars, lease buyouts or refinance for an existing loan.

You can acquire a ballpark budget and monthly payment by signing up for an initial approval.

LendingTree is very rewarding by way of shorter repayment periods and high credit scores. For example, if you have an 800+ credit score, you could qualify for a new car loan at a low APR of 1.85% on a 36 month period.

An APR of 3.19% on a 60 month loan term can be acquired by LendingTree if you have a credit score of 695. Down payment amounts are also an integral part of these figures.

There is a compare option with LendingTree for you to make a wise decision among the various auto loans you qualify for. Also, refinancing is always an open option down the road in case your payments come out higher than expected because of your credit score.

What Makes LendingTree Auto Loans Unique

There are a wide variety of options on LendingTree with a fantastic comparison tool that comes in very useful. You can easily balance your odds between potential auto loan offers, new and used car purchase, lease buyout or refinance. In addition, you will always get live rates based on current market rates after you input necessary information.

Recommended Auto Lenders if You Have Bad Credit

Auto Credit Express

With Auto Credit Express you face fewer restrictions on the car types and can also finance when you have a poor credit score. For example, if required you can get any old car as there are no mileage and age restrictions.

In some instances Auto Credit Express can allow you to qualify for a $0 down payment. However, there are some basic criteria that you need to meet like a pre-tax monthly income of at least $1,500.

You might also be required to provide certain other information regarding your employment in order to establish stability and income to cover monthly expenses.

Things to Note

There are more than 1,000 lenders in the network of Auto Credit Express across US and Canada. However, many buyers complain of limited options in some states (like California). Though California has many issues which is why it is losing jobs but this is another topic.

Blue Sky Auto Finance

Blue Sky Auto Finance is an aggregator that provides you multiple options after filling a simple one step application.

Their partner lenders work with bad credit borrowers that improve your chances of acquiring an auto loan marginally especially if you have a minimum credit score of 550.

With a credit score of 652, you need to show income totaling to $1,800 per month.

The maximum you can borrow through Blue Sky is $30,000 and you do not have to provide any down payment. This means multiple car options with very lax credit requirements.

Types of Auto Loans on Offer

There is a number of bad-credit and no-credit auto loans that you can finance through Blue Sky Auto directly from dealerships such as:

  • New and used car loans: These are standard term loans that you can use to purchase any used or new car from a dealership
  • Auto refinance loan: You can exchange or swap your old car for a new one on better loan terms

On top of this, Blue Sky Auto Finance allows you to apply for a personal loan that can be used to pay for a new car. With lower taxes, a lot more people have money and feel comfortable buying a new car.

Recommended Traditional Auto Loan Providers

Bank of America

There are very low rates advertised by Bank of America. Your zip code, credit history, and other factors play an important role in determining the specific rate; however, it does prove to be a good place to start.

Auto loan refinances are known to begin at 3.04% APR, with 2.74% for new car loans and 3.04% for used car loans.

You can also be eligible for rate discounts as high as 0.50% starting from 0.25% if you are enrolled in Bank of America’s Preferred Rewards program.

Another feature you are sure to love is the 30 day rate lock that B of A offers. You can freeze the interest rate that gives you freedom from stressing about rising interest rates while you go ahead and shop for more options.

How a Bank of America Car Loan Works?

Bank of America provides easy financing solutions when you are in need of an auto loan. There is a simple three-step process that can be applied online to acquire funds to buy a new car.

  • Apply online: It takes only 60 seconds for you to understand your loan amount. If you add a some more time to this, this is about as long as it takes to determine that The Force Awakens, 22 Jumpstreet, and Thor III are not impressive movies but let’s get back on topic.
  • Time to shop: Your interest rate is locked in for 30 days once approved – giving you time to consider other options.
  • Seal the deal: You receive funds to buy your new car once you have chosen what you want to buy.

Chase

Chase has got into a unique partnership with TrueCars that allows you to acquire a loan as well as buy a new car. Many customers have saved an average of $3,106 on the MSRP. It allows you to check the price paid by other people for the same car. You can calculate payments as well as check on your application status via the online portal.

You can get a straightforward loan even if you do not want to shop online for a new car through TrueCars.

An important point to note with Chase is that closing process and credit decision depends to a great extent on you being a Chase customer. It is necessary for you to check the details before making a decision especially if you do not bank with Chase.

Things to Consider

There are competitive rates on offer that depends on your credit worthiness and car option. You can estimate your monthly payments and interest amount by using Chase’s online payment calculator.

Interest can add up over 4 years if you make minimum payments as the shortest term length for a Chase auto loan is 48 months.

US Bank

This lender boasts of interest rates that are as low as 2.87% APR. Now, these rates might not last forever by US Bank; however, it can lend you an idea into the type of lender they are.

There is no down payment required which is extremely useful when you are strapped for cash. US Bank has options to acquire auto loans for both old and new vehicles as well as refinancing options for a current auto loan.

There are special discounts provided when you take out a green auto loan. These are for any used or new car that is an EPA-certified SmartWay vehicle.

You can apply for a loan through the Internet, phone, or by walking into a branch. However, you need to ensure that your vehicle of choice is not older than 6 years with a maximum of 100,000 miles logged.

Advantages

Loan advantages offered by US Bank include:

  • Equal rates for new and usedYou can get rates are as low as 3.12% APR with no consideration to whether a loan is for a used car or new.
  • No down paymentU.S. Bank does not require any upfront money and can provide financing of up to 115%.
  • Loyalty discountsThere is a 0.5% discount currently for U.S. Bank customers who opt for auto-pay or finance an EPA-certified SmartWay vehicle.

How to Choose the Right Auto Lender for Your Needs?

It is important that you do not rush into accepting the first loan offer that comes your way. Weigh all your options and make an informed choice even when you are in a hurry to purchase a new car.

An auto loan can severely impact your finances for coming years and it necessary that you do not miss out on a suitable loan opportunity and experience. These few tips can help you get started and choose the right lender:

Set a Search Timeframe

The first thing you should do is set a time frame to acquire a new loan as per your requirements and your terms.

Many times pre-approval or pre-qualification may involve hard inquiry into your credit report. This depends upon your lender loan approval process.

You need to be careful about multiple inquiries as each of them take around 5 points off your credit score. However, these inquiries will be lumped together as one if you are shopping for similar loan products over a period of 4 weeks or so.

Also, interest rates tend to change generally on the higher side. If you procure an estimate during spring time and wait till fall to actually purchase then you might receive a nasty shock in terms of interest rate jumping up.

It is also possible that you might not qualify for the same rates. On an average interest rates rise for all loan products at a trajectory that cannot be predicted.

An increase in payments might force you to buy a lower model car than you initially chose or pay higher for the same car.

Identify Your Most Appropriate Loan Type

Your next step should be to assimilate data. After reading the reviews above you might have figured that many lenders only provide loans for used and new cars from dealers while others provide refinancing options as well. Narrow down your search by identifying the type of loan need.

For example, if you want to finance a car from a private party then you need to make sure that you compare lenders that offer this service.

This holds true for other loan requirements as well such as buying out a lease or refinancing a car. Comparing lenders that do not even offer your required loan product will only lead to a time wasted effort no matter how low the interest rates are.

Perform an Interest Rate and Fee Comparison

There are terms other than interest rate which factors into costing your loan product. All lenders have unique and different terms. Make sure that you compare APR which includes all types of fee such as origination fee while you are comparing interest rates.

Also, length of a loan is an important part. A loan might offer a low interest rate but last 2 years longer than another one.

There are many other questions you should ask yourself especially when all loan options are affordable on similar terms. Which one is more likely to save you most money over time or how to pay for origination fee? Does the lender have any hidden charges or fee? These questions can save you from unpleasant surprises later on.

Consider how long it takes for the Application Decision

Also, factor in the time needed by a lender to process your application and deposit funds into your bank.

This information is crucial in choosing the right lender even if you are not planning on buying a car immediately.

You might have to delve deeper into quick statements made by lenders. Most of them boast of a quick process. You need to identify the time taken by underwriting process even if the credit decision is quick.

Also, plan ahead about the requirements you need to complete such as providing income verification documents. A lender might boast of immediate funding but you need to be available to sign a loan agreement in order to release the funds.

When You Shop for the Best Auto Loans – You are in the Driver’s Seat!

Competition for car loans is fierce. Therefore, even with a relatively poor credit score you will be able to find a number of auto loan options in the market. You can use this to your advantage and carry out an objective cost-benefit comparison between lenders to make the right choice.

Make sure that you consider all the key influence factors such as discounts, loan terms, and your credit score etc. while making a decision. Take your time to comprehend how all the pieces of the puzzle fit together for you before you sign on the dotted line.

You can start your search for the right auto loan by evaluating the offers of the auto loan companies listed in this guide. These are all salient choices that are worth your time to scrutinize.

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