Capital One Auto Finance Review for 2020

Are you looking for the ability to pre-qualify for an auto loan without a hard credit inquiry? Then a Capital One auto loan might be an ideal fit. These loans can be helpful if you want to comparison shop and check rates before you’ve found a vehicle that you want to purchase. With a required minimum credit rating of just 500, Capital One Auto Finance is an option whether you have poor credit or excellent credit.

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Founded in 1988, Capital One has grown to become one of the largest banks in the United States. It offers credit cards, mortgages, auto loans, and more. If you consider an auto loan from Capital One, you’ll be working with a known lender that’s already well-established in the auto industry.

Car Loan Application Requirements

To qualify for a Capital One auto loan, you’ll need a minimum credit score of 500. You will also need a minimum monthly income of at least $1,500 to $1,800, depending on your credit score. Loans are available to residents of all states except Alaska and Hawaii. You can’t use these loans to purchase Oldsmobile, Daewoo, Saab, Suzuki, and Isuzu vehicles.

When you’re ready to apply for a loan, you’ll need to provide the following information:

  • Personal information, including your address, email address, your driver’s license, and your Social Security number
  • Financial information, including your annual gross income and contact information for your employer
  • Proof of residence, like a copy of a utility bill or a mortgage statement
  • Proof of income, like a copy of a pay stub or three recent bank statements (if you’re self-employed)

Capital One Auto Finance does allow co-signers, which can increase your chances of being approved if you have poor credit. If you’ll be applying for a loan with a co-signer, they will need to be prepared to provide all of the above information, too.

Types of Auto Loans Available Through Capital One

Capital One provides auto financing for both new and used vehicles that can be used only at participating dealerships. While having to choose from a participating dealership can limit your car-shopping choices, Capital One’s network consists of 12,000 dealerships nationwide. You can find a participating dealership online.

You can easily get pre-qualified for a loan with Capital One’s Auto Navigator. The process takes just a few minutes and you don’t need to have already identified the vehicle that you want to buy.

Instead, just have an idea of how much you’ll want to borrow. If you’re approved, your pre-qualification letter can help you to bargain with a dealership. Plus, since there’s no hard credit inquiry required upfront, getting pre-qualified with Capital One can be a great option when you’re comparison shopping for the best auto loans.

Keep in mind that Capital One auto loans are available only for:

  • New or used cars, trucks, minivans, or SUVs for personal use
  • 2010 models or newer
  • Vehicles with less than 120,000 miles
  • Vehicles sold by participating dealers

Loans start at $4,000 and pre-qualifications are good for 30 days, giving you time to shop. If you’re pre-qualified, that doesn’t guarantee that you’ll be approved for the loan. Your final loan terms may also change based on the hard credit pull that’s performed when you officially apply for the loan.

In addition to loans for new purchases, Capital One also offers refinancing for current auto loans. By refinancing your loan, you may be eligible for a lower interest rate and lower monthly payments. According to Capital One, customers save an average of $50 per month by refinancing. Refinancing options range from $7,500 to $50,000. Refinance loan applications are usually processed in 24 hours.

Fees and Rates

Capital One Auto Finance offers competitive interest rates. Purchase loans have an APR as low as 3.39%, while refinance APRs vary from 4.07% to 24.99%. The better your credit, the better the interest rate you may qualify for. There are no application fees for these loans.

If you’d like to get an idea of your potential monthly payments, Capital One offers a car payment calculator that can help. The calculator can give you a sense of what your monthly payments will be based on your credit rating and corresponding APR. You can use the following average interest rates for each credit score to help estimate your payments:

New Car Purchase

  • Credit of 501-600: 11.71% APR
  • Credit of 601-660: 7.77% APR
  • Credit of 661-780: 4.96% APR
  • Credit above 780: 4% APR

Used Car Purchase

  • Credit of 501-600: 16.89% APR
  • Credit of 601-660: 11% APR
  • Credit of 661-770: 6.36% APR
  • Credit above 780: 4.66% APR

Capital One Auto Loan Application Process

While you can apply for pre-qualification online, you’ll need to apply for the car loan through a participating dealership. You can bring your pre-qualification letter with you to streamline this process. Remember, it’s good for 30 days.

When you officially apply for a loan through a dealership, Capital One will run a hard credit inquiry and give you your official financing terms.

Special Features

Capital One offers a few distinct advantages over some other loan providers. The ability to get pre-qualified for a loan without a hard credit inquiry is a great perk. It will give you some bargaining power if you want to negotiate the price of a car. You can also potentially use it to see if the dealership is able to offer you a better financing deal through another one of their finance providers.

If you want to qualify for an auto loan with bad credit, Capital One accepts credit ratings as low as 500. While you’ll pay higher interest rates and possibly have a higher required down payment, you may still be able to get financing from Capital One. Having a family member or close friend co-apply for the loan with you can increase your chances of getting approved and of getting a better interest rate.

Bottom Line

A Capital One loan might be right for you if:

  • You want to get pre-qualified without a hard inquiry into your credit
  • You plan to buy a vehicle from a participating Capital One dealership
  • You need financing but have a low credit score that disqualifies you from some other finance options
  • You have a high credit score and want to enjoy low interest finance options
  • You plan to apply for a loan with a co-applicant

It’s always important to make sure that you’re taking out a loan with the lender that’s right for you. With Capital One Auto Finance, you can easily get a sense of the rates you might see so that you can compare this loan with other offers to find the best deal.

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