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Best auto loan services 2020: Get the best rates, even with bad credit

Best auto loan services 2020: Get the best rates, even with bad credit
(Image credit: Jaguar)

In many ways, choosing from the best auto loans is as important as selecting your new car. Obviously, auto loans that come with a low rate will save you money, but you shouldn't lose sight of what else these services have to offer, such as great customer support and fast approvals. If you have existing debts or a bad credit history, the companies behind some of the best auto loans might still be willing to lend to you. 

With a vast array of the best auto loan companies vying for your custom, it's vital to cut your options down to those best suited to you. Of course, interest rates (or the APR) will be the starting point for most, but it's important to consider too how long it might take for your auto loan to be approved, the number of months and years over which you're expected to repay your auto loan, and the various charges that might come into play. It's always useful to see what current or previous customers think of the service they received as well. 

Fortunately, we've borne all of these factors in mind when compiling our rundown of the best auto loans. However, there may be other things that are pertinent to your situation too, such as finding an auto loan service happy to lend to people with bad credit, or the company that is best for used car rates. To make it easy for you, we've selected the best auto loan companies for each of these scenarios and more. 

That said, we know you'll also likely want to compare the auto loan rates on offer too, and the best way to get quotes fast is via an online marketplace such as LendingTree. Such comparison sites host the best auto loan services who are all waiting to send their best offers to you. Finally, when buying a second hand car, you might want the peace of mind offered by the best roadside assistance plans too, just in case you find yourself stranded at the side of the road.

Compare auto loans at LendingTree
LendingTree is the online marketplace that brings the best auto loan companies to you, saving you time and money over searching individual providers.
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1. LightStream Auto Loans: Best auto loan service 2020

Lightstream is our best auto loan service for 2020.

(Image credit: LightStream)

LightStream

LightStream provides the best auto loan service for most users, in 2020

Application process: Fast, simple and entirely online | APR: From 3.49% with AutoPay dependent on loan amount and terms | Fees: None | Loan terms: 24 - 84 months

Fast loan application results
Rate guarantee and discount 
Upfront credit check will affect your rating
Phone contact not an option

LightStream is the online auto loans division of SunTrust Bank and manages to successfully bridge the gap between traditional and digital banking. The best APR on offer is 3.49%, while there is a rate guarantee and always the potential for a discount too. 

The auto loans process is completely digital, very fast and supremely efficient - LightStream has been optimized for mobile devices, so you can apply directly from your mobile phone, if you so wish. The downside is that there’s no call center support, but as a safety net, LightStream offers a loan experience promise that will reward you with cash if you're unhappy with the service you receive.


2. Capital One Auto Loans: Best customer service

Capital One brings fantastic customer service.

(Image credit: Capital One )

Capital One

Capital One is top for customer service, and ideal for those needing support

Application process: Online prequalification process | APR: Dependent on loan amount and terms | Fees: None | Loan terms: 24 - 84 months

Digital prequalification process
Application doesn’t affect credit score
Must pre-qualify for detail over terms  
Limited to participating dealers

Capital One has everything you would expect of one of the largest auto loan providers in the U.S. and offers the ability to search for your new car through its Auto Navigator service too. The website is attractive and eye-catching, while digital pre-qualification won't affect your credit score, but will pave the way for greater insight into your possible loan terms. 

However, where Capital One really stands out is for the customer service that it has to offer, with support available online and over the phone. Importantly, it also emerges relatively unscathed from the notoriously difficult-to-please critics that tend to frequent review sites. If you rate customer service as your highest requirement when picking where to place your auto loan, then Capital One is very likely the right lender for you.


3. Alliant Credit Union Auto Loans: Best for low APR

Alliant Credit Union gets you some of the best rates.

(Image credit: Alliant Credit Union)

Alliant Credit Union

Alliant is great if low rates are your priority, and you have good credit

Application process: Online or by phone | APR: From 2.74% for new vehicle, from 2.99% for used and refinance | Fees: None upfront | Loan terms: Up to 84 months

Low rates compared with other lenders
Quick and efficient approval 
Disappointing customer reviews 
Need to join credit union

Alliant Credit Union might need you to become a member before taking out an auto loan, but this minor inconvenience can lead to some of the best rates on the market. The APR can be as low as 2.74% on a new car and 2.99% on a used car, while an additional 0.5% discount is up for grabs if you use its car buying service. 

The costs you could face are all laid bare, and the approval process is really fast too – you could have a new car in less than a day. There's also round-the-clock customer support to help you on your way. The shortage of positive customer reviews might prove a slight concern, but if it's a low-cost auto loan that you want, Alliant won't disappoint. 


4. Bank of America Auto Loans: Best for fast and efficient approvals

Bank of America will get you a loan faster than other providers.

(Image credit: Bank of America)

Bank of America

If you're in a hurry, Bank of America will approve auto loans fast

Application process: Online, phone, in store | APR: From 2.69% for new car, 2.99% used, 3.69% refinance | Fees: No application fee | Loan terms: 12 - 75 months

Decision possible in a minute
Wide range of loan terms
Slightly better rates available 
Unknown credit requirements

Bank of America should be your first auto loan port of call if speed is of the essence for you. With loan decisions pre-approved in as little as 60 seconds, the dream car you've just spotted won't be snapped up before you have your funds in place - the rate is then locked for 30 days as well, giving you time to consider your purchase if you're unsure. 

As you would expect, applying online is almost seamless, while there is plenty of support on offer at the end of the phone or in store, if you prefer. Slightly lower rates might be on offer from other auto loan providers, but Bank of America Preferred Rewards members can nick something off the costs with a discount. And while you might pay a little extra, remember that you're securing the services of a leading all-round auto loan company too. 


5. U.S. Bank Auto Loans: Best for used car rates

U.S. Bank provides access to some of the best used car rates

(Image credit: US Bank)

U.S. Bank

U.S. Bank is the reliable auto loan choice for used car rates

Application process: Online, in store, by phone | APR: From 2.84% with dependent on amount, terms and other factors | Fees: Prepayment fees for paying early | Loan terms: 12 - 72 months

Same rates for new and used vehicles
U.S Bank account holders get discount
Need good credit score
Little detail on loan terms 

U.S. Bank is ideal if you’re undecided between a new and used car, as it will offer the same auto loan rates for both. The caveat is that you’ll need a strong credit history to qualify for the lowest APRs, while you should make use of the 0.5% discount available to U.S. Bank check and saving account customers too. 

Applying for an auto loan is relatively fast and straightforward, while you can pop into your local branch if you prefer managing your finances face-to-face. However, be aware that it might take you a while to find the extra snippets of auto loan information that most borrowers like to know - U.S. Bank has a website that would definitely benefit from some clearer FAQ direction. 


6. Ally Auto Loans: Best for extras

Ally offers some compelling auto loan extras.

(Image credit: Ally)

Ally

If you're looking for auto loan extras, Ally is the best call

Application process: Direct dealer application | APR: Negotiable, dependent on amount, terms and credit score | Fees: Fees apply, not disclosed | Loan terms: 12 - 84 months

Various finance options
Online and mobile management
Must buy through a partner dealer
Lack of rate information 

Ally is ideal if you're looking for something extra from an auto loan company. In particular, this well-known name offers two innovative finance options that mark it out from the competition, in the form of its Balloon Advantage and Buyers Choice programs.

Ally is also ahead of the game with the scope of its online and mobile account management, but balancing this out, there are aspects that disappoint too. What will likely frustrate the most is the lack of loan detail available unless you are willing to visit an auto dealer. However, if you take a trip to the showroom and like what you hear, you'll also probably discover a little something extra on offer from Ally that you didn't know you could get. 


7. Wells Fargo Auto Loans: Best for low credit scores

Wells Fargo is the place to go if you have low credit.

(Image credit: Wells Fargo)

Wells Fargo

Wells Fargo provides the best chance of an auto loan if you have poor credit

Application process: Direct dealer application or call | APR: Dependent on amount, terms and credit score | Fees: Fees apply, not disclosed | Loan terms: 36 - 72 months

All credit scores considered
Different payment options
Long approval process
Loan information hard to find

Wells Fargo provides the best chance of securing an auto loan if your credit score is slightly below par. You will probably pay more for your loan – and the fees are higher here than some of the other auto loan providers as well – but at least you won't be turned away before you've even started. 

Where Wells Fargo does fall down is in respect of the information available to potential borrowers, with the main website notably short on detail. You must buy a car through one of its dealers too, but with over 11,000 partners across the U.S., there should still be ample choice. Ultimately, Wells Fargo is worth a look if you're unsure about your credit standing; for others, however, more rounded auto loan propositions are probably available elsewhere.   


8. LendingTree Auto Loans: Best comparison site

LendingTree is the top one-stop-shop for comparing auto loans.

(Image credit: LendingTree)

LendingTree

An online one-stop-shop to compare auto loan companies.

Application process: Online | APR: Dependent on lender | Fees: Dependent on lender | Loan terms: Dependent on lender

Share details once for many options
Competitive terms
 Most lenders will contact you 

LendingTree allows you to compare auto loan rates from multiple lenders after completing just one online application. Tell LendingTree how much you need to borrow and what you have to put down, and confirm the type of car you want and some income details, and you’ll be presented with a rundown of auto loan offers from its panel of lenders. Not only does LendingTree save time when it comes to comparing auto loans across the market, you will also likely receive the most competitive terms that the lenders possibly can, as they know they are competing for your business. 

If you need more information about the auto loan process, LendingTree has plenty of in-depth articles and guidance online. There are also a number of calculators that can be used to check what you might be able to afford, how much you could pay, and what you could save with an auto refinance deal. 

The entire LendingTree website is extremely easy to use and immaculately presented. The one potential downside is that in sharing your contact details with several auto loan providers all at one time, you may be subject to a number of follow up calls. But given the competitiveness of the auto loan proposals you receive back for giving up so little of your time, this is likely to prove a minor inconvenience. 


How do auto loans work?

Most auto loans are simple interest loans that are secured against the vehicle. The majority of auto loans are structured so the monthly repayments at the start of the loan you pay high amounts of interest (the fee you are paying the lender) and slowly shifts to repayment of the principal (the amount you borrow) the closer to the end of the term the loan gets.  Auto loan terms usually varying between 36 and 72 months. 

Longer loan term mean smaller repayments but usually results in a bigger over all cost and repayment. You can get auto loans with bad credit, but this will affect the rate of the loan. As there is a higher risk, you will have a higher repayment on the loan. Auto loans are available through dealerships, banks, online services, or via credit unions. 

What to know before applying for an auto loan

An auto loan isn’t a mortgage, but it’s still a significant expense that affects your finances. Before applying here are some things to do.

Check your credit: Knowing your credit score before you apply can give you a clearer idea of what rates you can expect to pay. There are many free options for checking your credit score, and some credit cards offer free monthly credit checks. Alternatively read our guide to the best credit report services. You can still get an auto loan with bad credit, but you will be paying a higher premium for it. 

Get pre-approved: Getting pre-approved for a loan gives you an advantage when shopping for cars. By knowing how much you can afford, you’ll be better positioned to negotiate with dealers.

Come prepared: To apply for an auto loan, you’ll need to provide the lender with the necessary documents. Most want to see proof of income, credit and banking history, proof of residence and proof of insurance. Getting a loan through your current bank or credit union makes this step much easier, since they will have much of this information on hand.

Remember your budget: This goes for your monthly payment, down payment and the total auto loan amount. Make sure you can afford the monthly payment. You don’t want to fall behind and risk losing the car. According to an Experian study, the average monthly payment on an auto loan is around $532. You’ll also need a down payment, usually 20% for a new car and 10% for a used car. 

Use dealers as a last resort: Dealers may sometimes be your only option, especially if you have poor credit. But always try and find financing through a bank or credit union because you’ll usually get a lower rate. Dealers also tend to add markups to the interest rates, so you’ll end up paying more if you get a loan through a dealership.

Budget for a warranty: If you're buying second-hand, it's smart to set aside a little money for an extended warranty. You could save $1000s on repairs and servicing, which are extra costs that really pile up if you already have an auto loan. If the dealer doesn't offer it, check out the best extended car warranties providers, to give yourself peace of mind after buying the car.