At Top Ten Reviews, we help consumers find the best auto loans to help them get a car they love. We looked at credit unions, banks, other direct lenders and brokers to cover the entire array of available lending options.

Because rates vary so widely depending on your credit score, the car you choose, and the state you live in, we didn’t base our decision entirely on rates. We looked at other factors including loan terms, restrictions and application processes.

Best Online Auto Loans

An online auto loan offers advantages over the usual process of getting financing through a dealership or bank. One advantage of using an online service like Lending Tree is that you can get multiple offers at once and compare them. You can search for cars from local dealerships that match your criteria, filtering for price, make and model. You can also use an auto loan calculator to figure out how much your payments will be and how much money you can borrow.


Lending Tree will provide you with multiple auto loan offers from banks like Wells Fargo and Chase, dealerships and other financial institutions. Through its auto loan portal, you can apply for new and used car loans. There are also tools to help you find cars from local dealerships.

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Best Auto Loans From a Bank

Getting an auto loan through a bank can offer some advantages over other avenues. Banks don’t mark up their rates the way dealerships often do, and they also give you the opportunity to get your financing in a face-to-face setting where you can ask questions about the lending process. Some banks, such as Wells Fargo, offer discounts and other benefits if you already have an account with them.

Wells Fargo

Wells Fargo offers auto loans in addition to its many other banking services. You can apply online and get preapproved the same day. Getting a car loan through a bank offers you the opportunity to get a lower rate than you would from a dealership.

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Best Auto Loans From a Credit Union

Credit unions are another auto financing option worth exploring. Credit unions like Alliant often have low rates, lower even than some banks. Acceptance rates at credit unions are higher, and if you have bad credit you are more likely to get financing. Credit unions require you to be a member before getting financing, so you’ll need to check the membership requirements before you can apply for a loan.

Alliant Credit Union

Alliant Credit Union provides auto loans as part of its services. One advantage of choosing a credit union is they tend to have rates that beat the industry average and are better than what you can find at BlueSky and CarsDirect. You will need to meet the membership requirements to join, but when you do you will become eligible for various promotions and discounts.

An auto loan through Alliant can be used at either franchised or independent dealerships. Franchised dealers sell new cars and have service departments while independent dealers have a wider selection of mostly used cars. You can also use a loan from Alliant to purchase a car from a private seller. Alliant also has tools on its website to help you find cars from local dealers.

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Best Bad Credit Auto Loans

Having a bad credit score can make it difficult to get an auto loan. Fortunately, there are many lenders, including, that can accommodate less than sterling credit scores. Be aware than when getting a car loan with a bad credit score, you’ll be paying a higher rate. is an online service operated by the Santander Group that provides auto loans for used and new cars and allows you to use those loans to buy cars from dealers and private sellers. In addition to auto loans, you can also get auto refinancing through RoadLoans. Chase and Alliant also offer auto loan refinancing. There is also a mobile app that helps you keep track of your loan’s progress from anywhere.

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Best for Refinancing Auto Loans

Refinancing your auto loan offers several advantages. If you had a high interest rate due to a low credit score, you can refinance and get a lower rate due to improved credit. Clearlane allows you to refinance loans and doesn’t do a hard credit pull until you’ve accepted an offer.


Clearlane is an auto loan marketplace operated by Ally Financial. Clearlane is a broker, which means it does not provide loans, unlike Chase and Wells Fargo directly but connects you with financial institutions or local dealers willing to fund your auto purchase.

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What to Know When Getting a Car Loan?

What should you know before getting a car loan?

While a car loan isn’t as complex as a mortgage, there are still a few things to know before you start applying.

  • Check your credit: Before you even begin applying for a loan, we recommend checking your credit score first. There are many services that will give you your credit score for free. Also check with your credit card company as some of them offer free monthly credit checks. Knowing your score beforehand can help give you an idea of what rates you can expect. Many auto loan calculators can give you a more accurate idea of your monthly payments if you know your credit score.
  • Get preapproved: Getting preapproved for your auto loan gives you a clear idea of what your options are and how much you can afford. By having a pre-approval, you can essentially shop as though you’re planning on paying in cash, which gives you a leg up when negotiating with dealerships.
  • Shop around: This means shop around both for loans and for the car you want. Don’t accept the first offer you get. When applying for a new line of credit be sure to make all your inquiries within a two-week period. Each time you apply, the institution will run a hard inquiry, which will impact your credit score, but if you confine your inquiries to one period, it will only affect your score once. Using a broker like Lending Tree can help you by presenting you with multiple offers at once.

What do you need to get an auto loan?

Like any kind of loan, you’re going to need to provide the institution with documentation. Here’s some of the most common. It’s important to note that these vary depending on the lender you choose.

  • Proof of income: Usually this will just be pay stubs or bank statements, but occasionally a lender will want to call your employer to verify. If you have additional sources of income like rental properties or investments, you will also need to bring proof of that income. If you are self-employed, you’ll need to bring tax returns.
  • Credit and banking history: Lenders want to know about your other obligations. You may need to provide mortgage or lease agreements, credit card statements and records of any other financial obligations. One advantage of getting an auto loan from your current bank or credit union is that this step will be significantly simpler.
  • Proof of residence: Often you will be able to satisfy this requirement with some personalized mail, but some lenders may require a mortgage statement or rental contract.
  • Proof of insurance: This may be the trickiest part, since you’ll need to get insurance for a car you may not own yet. It becomes even trickier if you’re buying over the weekend. Make sure to check your current policy; most will cover a new purchase for a certain amount of time before you add it to your policy. We recommend calling your current insurance provider to confirm this, and get that confirmation in writing so you can complete your purchase at the dealership.

How do you apply for an auto loan?

So you’ve decided you need a new vehicle and even done some window-shopping, but now you’re ready to actually begin the process. Here’s what you can expect as you begin applying for car loans.

  • Examine your budget: Take stock of your finances before you apply and make sure you can afford an additional monthly payment. Per, the average monthly car payment for a new car is $479, although a used car can be more than 20 percent cheaper. You’ll also need money for a down payment. Typically, you’ll need a 20 percent down payment for a new car and 10 percent for a used car, though it’s usually a good idea to put as much as you can afford toward a down payment.
  • Get preapproved: As we mentioned above, getting preapproved can give you a clear idea of the vehicles you can afford and give you a leg up when negotiating with the dealership. You’ll be preapproved up to certain amount; if you find a car you want that costs more than your preapproval, you may need to reapply.
  • Find a car: You’ll need to decide if you want a new or used car, as well as a make and model. Having an idea beforehand can make the process much simpler. Some online lenders also include tools to help you find cars in your area. Lending Tree, Cars Direct, Carvana and all have tools to match you with cars and local dealers.

What is the APR for a car loan?

APR stands for annual percentage rate and is the amount of interest you can expect to pay over a year on your loan. Rates vary widely and can depend on many different factors. Here are some of the factors that influence interest rates the most.

  • Credit score: This is the biggest factor influencing your rate. Your credit score reflects your ability to pay on time and is affected by late payments, the age of your credit history and how many lines of credit you have. Generally, the better your credit score, the lower your interest will be. Having a bad credit score doesn’t necessarily mean you won’t be able to find an auto loan.
  • Debt-to-income ratio: This reflects your ability to pay back a loan. If you have a lot of outstanding debt, a lender may have less confidence in your ability to keep up with payments and you might get less friendly terms.
  • Down payment: The more you pay upfront reduces the total amount of the loan, which will save you some interest payments. If you’re trading in an old car, you might be able to use that as your down payment.
  • Vehicle age: If you want financing for a used car, you’ll most likely pay a higher rate than you would for a new car. Many institutions have restrictions on the age and mileage of a vehicle they’ll lend for. This is typically around 8 years or 100,000 miles.
  • Loan term: Typically, the shorter the term the better the rates. Auto loan terms range from 24 to 84 months, with around 60 months being average. With a shorter term loan you’ll pay less in interest over the life of the loan than you will with longer terms.

How do you refinance your car?

Refinancing your auto loan can allow you adjust the term of your existing loan. By shortening the term you can potentially bring your interest rate down. to take advantage of lower rates or lengthen the term of your existing loan. If your credit score has improved, refinancing can give you a lower rate, since bad credit loans tend to have high initial rates.

The process of refinancing a loan is similar to applying for the initial loan. You’ll need to check your credit, gather the necessary documents and apply for the refinance. You don’t need to refinance with the same institution that gave you the initial loan, but doing so can greatly speed up the process.

Auto Loan Mistakes to Avoid

Buying a car can be tricky, and getting a loan can come with additional complexities. Here are a few things to pay attention to as you shop for cars and loans.

  • Look at the total loan amount, not just monthly payments: When shopping for a car, keep the total amount in mind, and try not to focus on the monthly payment. It’s good to know the monthly payment you can afford and factor that into your decision, but focusing on that number instead of the total will give the dealership an opportunity to hide other costs.
  • Avoid add-ons: Dealerships make a lot of their profits by upselling add-ons and extended warranties for your car. While the dealership may offer you the chance to finance the cost of fabric protection or rust-proofing into the cost of your loan, you’ll end up paying interest on these and it will cost you more in the long term.
  • Avoid long terms: The average term for a car loan is 60 months, but 72 to 84 month loans are starting to become more common. While a longer-term loan will have lower monthly payments, keep in mind that cars depreciate quickly, and by year seven of your loan you may be underwater, owing more than the car is worth. With a longer term you’ll also end up paying more in interest over the life of that loan.
  • Stick with a bank or credit union: You can get financing through a dealership, but they tend to mark up the interest rates, so you’re almost always better off getting your loan through your bank or credit union. These institutions typically have member discounts which can further reduce the costs. Credit unions may be harder to join, but they are worth it, especially if you have less than sterling credit. Banks we recommend include Wells Fargo, Nationwide and Chase. Credit Unions worth exploring include Alliant, USAA and Navy Federal.

Finding the right auto loan can seem daunting, but our goal is to provide you with the best available choices and information to make an informed decision. The lenders on our lineup reflect the most widely available options, including banks and credit unions with national reach and brokers that can present you with multiple offers in your area.