Introduction: Finding the Best Banks to Get an Auto Loan or Car Refinance
Purchasing a new car is an exciting adventure for anyone. However, unless you happen to have $10,000 to $20,000 in savings, you will need to search for the best auto loan banks to help you with your new purchase.
Unfortunately, many banks out there take advantage of new and first-time buyers, charging extremely high annual percentage rates.
The best bank to get a car loan may not necessarily be the one offering the lowest interest rate. While searching the market for the best car loan banks, you will also need to consider a number of other factors which can affect your overall purchase in the long run.
Award Emblem: Best Banks for Auto Loans
In this brief article, AdvisoryHQ will help you find the best banks to get an auto loan. We have researched a multitude of banks online and have come up with a comprehensive review of the best auto loan banks.
We will let you know what factors you should be looking for in the best car loan banks as well as offer a quick overview on the top 6 best banks to get an auto loan.
In addition, we will consider which is the best bank to refinance an auto loan to help you manage a refinancing of your original car loan.
It is understandable that maintaining a high credit score is not always the easiest thing to do. For those with less than optimum credit, we will also review the best car loan banks for people with poor credit.
Top 6 Best Banks for Auto Loans
Table: The above table of best banks for auto loans is sorted alphabetically
What to Look for in the Best Bank for an Auto Loan
The first thing to remember when searching for a car loan is that there is no absolute best bank for an auto loan. Every person has unique circumstances that will determine what he/she is looking for. The best bank to get a car loan for you will be the one that adapts to your own circumstances and situation.
For example, one bank may offer extremely low interest rates but will only allow your loan to be financed over a 72-month period. If you have the economic capability to pay off your loan in only two years (instead of six), it might make more sense to find a bank offering shorter loan periods even though the interest rates may be slightly higher.
Image Source: Best Banks to Get an Auto Loan
The best bank for a car loan is a bank that offers to its customers a wide range of different loan types that can be adapted to the unique conditions of the buyer. Furthermore, the best bank for an auto loan will also have a quick application process, allowing for rapid approval of the loan.
This is especially important for people shopping for used cars. It would be frustrating to find the car of your dreams in the classifieds only to find that someone else had already purchased it while you were waiting on approval from a loan.
Of course, the best auto loan banks also must offer competitive interest rates. This is the factor that almost every buyer first considers and for good reason. Most of the best car loan banks offer an annual percentage rate somewhere between 3 and 5%.
Let´s say that bank #1 offered you a 72-month loan for a $10,000 dollar car at a 3.5% annual percentage rate, and bank #2 offered you the same-priced car a 5% APR. During just the first year of the loan, you would end up paying at least $150 more in interest for the 5% loan as compared to the 3.5% loan. Finding the best bank for an auto loan that offers low interest rates will save you lots of money over the course of the loan.
Lastly, you will also want to search for a bank that offers quality customer service and other resources for the buyer. The best auto loan banks should have representatives that are willing to talk with you about refinancing options if your credit score significantly improves over the course of the loan. Furthermore, if you have other questions regarding your loan, the best bank to get a car loan should help you answer those questions without a hassle.
Best Auto Loan Banks Online
Though you may very well be able to find a quality car loan at your local hometown bank or credit union, it is always smart to shop around first to find the best bank for a car loan. Online banks generally offer highly competitive interest rates and specialize in car loans. What follows is an overview of the top two best auto loan banks online.
This well-known website is best known for helping people find the car they need. In addition, this company is also one of the best car loan banks. Whereas most online banks will only allow you to apply for a loan for a minimum of $5,000 to $10,000, CarsDirect has no minimum amount.
CarsDirect, then, is the best bank to get a car loan if you are looking at purchasing a relatively inexpensive used car with high mileage.
It also has a pretty decent customer service team and provides the buyer with an online calculator to help you get an idea of what your interest rate will be as well as whether you can get any trade in value for a car that you currently own.
As with most online banks and lenders, you will probably find that your email address gets passed around, and you may find your inbox filled with spam from other lending agencies. Even the best banks for auto loans online, however, will lead you into those problems, which can be a nuisance.
myAutoloan is also one of the best banks for an auto loan that you can find online. It will connect you to a number of online lenders offering all types of car loans so that you can pick the best bank for your car loan.
According to thesimpledollar.com, one of the best aspects of myAutoloan is that “a handy interest-rate estimator helps you get an idea of what you should expect to pay for a loan based on your credit score, location, and type of loan. For example, if I’m looking at a $25,000 new car loan in Knoxville, Tenn., with excellent credit, I might expect an average APR of 2.27%, but if I’m looking at the same loan in Los Angeles with average credit, my average APR would be 8.63%.”
Since location is especially important when determining annual percentage rates, myAutoloan rates among the best auto loan banks because of the fact that it will help you determine how your location will affect your interest rate. Another unique service offered by myAutoloan is that it will put you in contact with lenders who will help you purchase your leased vehicle.
Bank of America
If you don’t feel comfortable applying for a car loan online or prefer the trusted name of some of America’s most well-known banks, there are a number of big-name banks that also rank amongst the best car loan banks out there.
Whereas many of the bigger banks will only finance car loans for new cars or high-quality used cars, Bank of America will allow loans for vehicles that are up to 10 years old as well as cars that have up to 125,000 miles.
Image Source: Best Banks to Get a Car Refinance
One of the aspects that makes this bank one of the best auto loan banks is that if you bank with Bank of America, you can apply for interest rate reductions. If you are considering refinancing a car loan because your credit score has improved, then Bank of America is the best bank to refinance a car loan if you are also a customer of that bank.
There are over 5,000 branches around the country, but you can also decide to manage your loan online. The flexibility in managing your loan, along with the ability to finance the purchase of a more inexpensive used car, makes Bank of America one of the best auto loan banks among the big-name banks in America.
Capital One is another well-known bank that offers some of the best annual percentage rates on the market. If you have an above-average credit score, you should easily be able to receive a 2.49% APR on a 72-month car loan. On top of a low interest rate, Capital One also offers manageable monthly payments, making it one of the best banks to get a car loan.
Unfortunately, Capital One may not be open to giving loans for older, high-mileage vehicles. Furthermore, to receive the best annual percentage rates, you will need to have a good credit score. Captial One, then, is one of the best banks for an auto loan if you have a good credit rating and are most interested in purchasing a new car or a high-value used car.
Lastly, we have U.S. Bank which is also considered to be one of the best car loan banks due to its variety of loan options, decent interest rates, and quality customer service. U.S. Bank will even finance a car you purchase from a private seller.
Since most big banks don’t allow this option, U.S. Bank is the best bank for an auto loan if you prefer to purchase from a private seller.
Furthermore, whereas most banks will increase the interest rate for used cars that are purchased, U.S. Bank maintains the same interest rates for used cars that are in good condition. For environmentally-conscious consumers who want to purchase electric cars or vehicles that have good gas mileage and low emission rates, U.S. Bank also offers a 0.5% reduction in APR for these types of cars.
All of these options make U.S. Bank one of the best auto loan banks for consumers who want to purchase environmentally-friendly vehicles from private sellers.
Can You Refinance a Car Loan with the Same Bank?
Many first-time car buyers may find themselves locked into a loan that doesn’t offer the most favorable conditions for the buyer. If that is your case, then you will want to begin searching for the best bank to refinance an auto loan.
While you may very well be able to refinance your original loan with the same bank, it is worth your while to shop around for the best bank for auto refinance that offers you a lower interest rate and more favorable monthly payments.
There is no universally acclaimed best bank for auto refinance, but many of the big-name banks can offer you an improved annual percentage rate if your credit score has improved.
The best bank for auto refinance should be upfront with its customers regarding their credit score. Its website should have an online calculator to help you determine your estimated interest rate.
If your bank doesn’t offer you that information, bankrate.com has a quality online calculator that you can use to help you discover the going APRs for 48 and 60-month loans for used and new cars that are either purchased outright or refinanced.
Best Auto Loan Banks for People with Low Credit Scores
Not all of us are privileged enough to have a credit score hovering around 800. The big-name banks may be the best car loan banks for people with good credit but might not offer competitive rates for people with lower credit scores. Luckily, there are other online lenders and banks that specialize in loans for people with less-than-optimum credit.
Auto Credit Express
Auto Credit Express has absolutely no loan restrictions on the type of car you are looking to finance. If you are in a tight economic situation, you may be looking to purchase a used car with high mileage that other banks simply will not finance. Furthermore, Auto Credit Express will even work with people who have declared bankruptcy.
This company, then, is the best auto loan bank for people with few other options. Though its interest rates will be higher than the more well-known big banks and online lenders, it will work with you on a personal basis to help you find a way to finance your car.
How the Best Bank for a Car Loan Can Help you in the Long run
According to wallethub.com, when it comes to finding the best bank for an auto loan, “there’s no clear-cut answer, as myriad different factors affect the attainability of car loans.”
To determine the best bank for a car loan, you will want to take into account your credit standing, how much down payment you are willing and able to pay, and how much disposable income you have for the monthly payment.
Purchasing a car is an important and necessary decision for many. By finding the best bank for your auto loan, you will be able to obtain a quality car and still maintain the peace of mind that comes from knowing that you won’t be charged an arm and a leg in interest rates.
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