The best auto loan is not always the lender with the lowest advertised APR. Your credit score, loan term, vehicle, down payment, and lender type can all change the rate you receive and the total amount you pay.
We compared banks, credit unions, online lenders, and loan marketplaces for rates, loan options, pre-qualification, fees, vehicle restrictions, and access for different credit profiles. Our top picks cover borrowers with strong credit as well as people who need bad credit auto loans.
8 Best Auto Loans
Advertised APRs can change at any time. The lowest rates usually require strong credit and may require a specific loan term, vehicle, or car-buying program.
PenFed Credit Union: Best for Low New-Car Rates
PenFed Credit Union has some of the lowest advertised rates among the providers on this list.
Consumers Credit Union: Best Credit Union Alternative
Consumers Credit Union offers auto loan terms of up to 84 months.
Bank of America: Best for Existing Bank Customers
Bank of America auto loans currently start at 5.19% APR for new cars and 5.39% APR for used cars for a 60-month term.
LightStream: Best for Flexible Vehicle Purchases
LightStream offers unsecured loans from $5,000 to $100,000 for borrowers with strong credit.
Capital One: Best for Pre-Qualification
Capital One Auto Finance lets shoppers pre-qualify through Auto Navigator without an effect on their credit score.
Auto Credit Express: Best for Credit Challenges
Auto Credit Express is not a direct lender. It connects applicants with dealerships and lenders that work with poor credit, limited credit history, bankruptcy, repossession, and other credit problems.
CarsDirect: Best for Bad Credit and Past Bankruptcy
CarsDirect connects car shoppers with dealerships and lenders.
myAutoLoan: Best for Comparing Multiple Loan Offers
myAutoLoan is a marketplace rather than a direct lender. One application can return up to four pre-qualified offers for new cars, used cars, refinancing, private-party purchases, or lease buyouts.
How We Chose the Best Auto Loans
We focused on the factors that have the greatest effect on the value of an auto loan. These factors include APR, repayment terms, loan amounts, fees, pre-qualification, vehicle restrictions, borrower requirements, and whether the company lends money directly or connects borrowers with other lenders.
We also gave preference to providers that let borrowers compare or check financing terms before they commit. Published rates are useful for comparison, but your actual offer depends on your credit profile and the details of the vehicle purchase.
Average Auto Loan Rates by Credit Score in 2026
Your credit score has a major effect on the APR you receive. Experian’s Q1 2026 data shows a large gap between rates for borrowers in the highest and lowest credit score tiers. These are market averages, not guaranteed offers.
| Credit Score Range | Credit Tier | Average New-Car APR | Average Used-Car APR |
| 781 to 850 | Super prime | 4.55% | 6.30% |
| 661 to 780 | Prime | 6.23% | 8.77% |
| 601 to 660 | Near prime | 9.67% | 14.03% |
| 501 to 600 | Subprime | 13.44% | 19.42% |
| 300 to 500 | Deep subprime | 16.01% | 21.77% |
Experian reported an overall average APR of 6.39% for new-car loans and 11.43% for used-car loans in Q1 2026. The average credit score was 751 for new-car borrowers and 682 for used-car borrowers.
How to Compare Auto Loan Offers
The lowest monthly payment is not always the cheapest loan. Compare each offer on the same loan amount whenever possible so you can see the real difference in cost.
- APR: Compare the annual percentage rate because it reflects the interest rate and certain finance charges.
- Loan term: A longer term can lower the payment but increase total interest.
- Total interest: Calculate how much interest you will pay from the first payment through the last payment.
- Fees: Check for origination fees, documentation charges, and prepayment penalties.
- Vehicle rules: Confirm whether the lender finances used cars, older vehicles, private-party purchases, or lease buyouts.
- Down payment: Compare how much cash each lender requires and how the down payment changes the APR or loan amount.
The Consumer Financial Protection Bureau says lenders consider factors such as your credit score, credit history, income, debts, loan amount, loan term, down payment, and vehicle type when they set an auto loan rate.
How Auto Loan Rate Shopping Affects Your Credit Score
You do not need to avoid rate shopping because you are worried that every auto loan application will count separately against your credit score. The Consumer Financial Protection Bureau says auto loan credit inquiries that occur within about 14 to 45 days generally count as one credit inquiry for credit scoring purposes. The exact window depends on the credit scoring model.
Pre-qualification can make comparison easier because some lenders use a soft credit inquiry at that stage. A final application can require a hard credit inquiry. Keep your applications within a short shopping period when possible.
Dealer Financing vs. Getting Preapproved
A dealer can arrange financing for you, but the dealer may not offer the lowest rate you qualify for. The lender gives the dealer a buy rate. The dealer can offer you a higher contract rate and receive compensation from the difference.
A preapproval from a bank, credit union, or online lender gives you a rate to compare against the dealer’s offer. The Consumer Financial Protection Bureau recommends comparing offers before you visit the dealership because another lender may save you hundreds or thousands of dollars over the life of the loan.
How Loan Term Length Changes Your Total Cost
A longer loan term reduces the monthly payment, but it usually increases the amount of interest you pay. It can also leave you with negative equity for a longer period. Negative equity means you owe more than the vehicle is worth.
For example, a $25,000 auto loan at 6% APR costs about $587 per month for 48 months. Total interest is about $3,182. The same $25,000 loan at 6% APR for 72 months costs about $414 per month, but total interest rises to about $4,831.
The 72-month loan saves about $173 per month, but it costs about $1,649 more in interest. Compare the total cost before you choose a longer term just to get a smaller monthly payment.
Frequently Asked Questions
What credit score do I need for a low APR?
To qualify for the lowest auto loan rates, you’ll typically need a credit score of 740 or higher. Borrowers in this range often secure APRs under 5%. If your score falls below this, you may still get a competitive rate, but anything under 670 usually results in higher interest costs.
If your score is lower, improving it before applying, by paying down debt or correcting errors on your credit report, can help you secure a better rate.
Can I get a car loan with bad credit?
Yes, but expect higher interest rates and stricter loan terms. Lenders that specialize in bad credit auto loans may approve you with a score as low as 500-580, but rates can exceed 15-20% APR.
- Consider a larger down payment: This reduces the loan amount and improves approval chances.
- Look at credit unions or subprime lenders: Some lenders specialize in working with borrowers with lower scores.
- Apply with a co-signer: A co-signer with strong credit can help secure better terms.
How much should I put down on a car?
A down payment of at least 10-20% is recommended for the best financing options. While some lenders allow zero-down financing, putting money down reduces your car loan balance, lowers your monthly payment, and helps you avoid owing more than the car is worth.
If you have bad credit, a larger down payment can also improve your approval odds and help you qualify for a lower interest rate.
Is a 72-month loan a bad idea?
It depends on your budget and financial goals. A 72-month loan lowers monthly payments but costs more in interest over time. Longer loan terms also increase the risk of being upside down on your loan, meaning you owe more than the car’s value.
- Shorter-term loans (48-60 months): Reduce total interest paid and help build equity faster.
- Longer-term loans (72+ months): Keep monthly payments lower but cost more overall.
If you can afford higher monthly payments, choosing a shorter loan term will save you money in the long run.
What’s the best way to compare auto loan offers?
To find the best deal:
- Get pre-qualified: Check rates with multiple lenders without affecting your credit score.
- Compare APRs, not just monthly payments: A lower monthly payment on a longer loan may cost more in interest.
- Look for hidden fees: Origination fees, prepayment penalties, and add-ons can increase costs.
- Evaluate total loan costs: Factor in interest, fees, and the length of the loan before deciding.
Taking the time to compare offers ensures you get a loan that fits your budget without overpaying.
