Pros / You get offers from multiple lenders and can choose the one with the best rate and term.
Cons / Each lender checks your credit individually, which can result in a lot of credit pulls.
Verdict / LendingTree works with many major lenders, and it is a useful tool for finding the best value.
Though not a lender itself, LendingTree can help you find the best value by providing you with multiple loan offers, including offers from banks we reviewed like Capital One. Because it’s not a lender itself, the terms, rates and car requirements vary more than elsewhere.
We compared the advertised rates for each company we reviewed. LendingTree posts rates of 3.99% for a new car and 3.19% for a used car. The used car rate is a standout, though the new car rate also compares well to those at other lenders. We need to caution you that these rates reflect the best-case scenario with your credit score. To get these rates you usually need a credit score over 800, which is quite uncommon. Rates also depend on monthly income, the type of car you’re looking for and the state you live in.
LendingTree further complicates this by not offering loans itself. Its rates further fluctuate depending on which lenders you match with and which offer you accept. However, using LendingTree gives you more flexibility as you decide on an auto lender.
Each time you apply for a loan, the lender does a hard pull on your credit. This affects your credit score, but the credit bureaus combine each hard pull made over a 14-day period into one. That way, you can shop around without making a big impact on your score. It’s important to keep this in mind when you use LendingTree because you receive many offers, and each lender pulls your credit.
Loan terms range from 18 months to 84 months. Shorter terms often have lower rates but much higher monthly payments. Longer terms, especially beyond 60 months, have higher rates but lower monthly payments. Additionally, when you choose a term beyond 60 months, you’ll likely pay more than your car is worth in the end because it continues to lose value as you pay for it.
One advantage of a service like LendingTree is you can get any car you want. Many individual lenders have restrictions on the mileage or age of the car, but with a network of lenders, you can find an option that fits the vehicle of your choice. If you chose an especially old car or a vehicle with high mileage, you have fewer options and may have a higher interest rate.
LendingTree is relatively quick – once you fill out the form, you should get offers and preapprovals within one business day. Actual processing and underwriting by the lender may take longer, but having preapproval is enough to go to a dealership to find a car.
Other factors that vary depending on the lender you chose include whether you can make payments online and whether there are prepayment penalties or origination fees. Many lenders don’t have those fees, but it depends on the state you live in.