Best car loan rates for 84 months

Hear from our editors: The best auto loan rates of 2022

Updated November 18, 2021

If you’re hoping to qualify for the best auto loan rates, having excellent credit is a good start.

But even if your credit isn’t perfect, some lenders offer interest rate discounts and other features that may make them a good fit for you. We’ve rounded up banks, credit unions and online lending platforms offering some of the best starting loan rates (as of November 18, 2021) and other potential benefits for different auto loan types.

*May offer different terms on Credit Karma.

Best rates for new-car loans: Bank of America and PenFed Credit Union

Loans for new cars typically have lower interest rates than used-car loans, so you may already be on track to score a better auto loan rate. Among all of the lenders we reviewed, Bank of America and PenFed Credit Union are our top choices.

Best rates for used-car loans: Chase and U.S. Bank

If you’re buying used, you may not get an auto loan rate that’s as low as if you were buying new. But considering that, according to Carfax, new cars can lose more than 10% of their value within a month of your purchase, a used vehicle may still make better sense financially.

For used-car loans, we like Chase and U.S. Bank. Here’s why.

Best rates for private-party loans: LightStream and PNC

Buying a car from an individual instead of a car dealership has both benefits and drawbacks. It can be cheaper, but not all lenders offer financing for private-party sales.

LightStream and PNC are two banks that offer private-party loans with low starting rates.

Best rates through lending platforms: AutoPay and MyAutoLoan

AutoPay and MyAutoLoan aren’t direct lenders — they partner with financial institutions across the U.S. to offer auto loans online. Working with a variety of partners helps both companies find loans for people across the credit spectrum, as well as offer competitive starting APRs to those who qualify.

How we picked these lenders

In choosing lenders for this roundup, we looked primarily at their starting loan rates. But we also considered other factors that can be beneficial, such as a range of loan terms, interest rate discounts, the ability to apply for prequalification or preapproval, and geographic availability.

While some of these lenders don’t offer auto loans in all 50 states, we still felt they could offer enough value to include them on the list.

What to consider with starting auto loan rates

The most important thing to keep in mind as you’re searching for the best auto loan rates is that they’re typically reserved for people with excellent credit. Depending on the credit-scoring model the lender uses, that could mean having a score in the high 700s or even 800s.

Beyond your credit scores, factors including the kind of loan you want, the amount and the repayment term could affect whether you qualify for a lender’s lowest interest rates.

Note that as you’re shopping around, you can apply for multiple auto loans in a short period — typically 14 days, though it can vary by credit scoring model — during which the associated hard credit inquiries might only count as a single hit.

As you compare loan offers, consider any fees, the loan amount, loan term and estimated monthly payment in addition to the APR. Weighing all loan factors can help you identify the best loan for your needs.

What is a good interest rate on an auto loan?

These were the average car loan interest rates as of June 25, 2021, according to the National Credit Union Administration.

But remember that a range of factors, including the type of lender, can affect the rate you’re offered. Credit unions tend to offer lower rates than banks. And if you qualify, you may be able to get the lowest possible rate — 0% APR — when you get a new-car loan through an automaker’s finance company.

FAQ: Editors’ answers

What kind of credit scores do you need to buy a car?

There’s no universal minimum credit score required to get a car loan — score requirements vary from lender to lender. Some lenders specialize in lending to people with excellent or good credit, while others focus on lending to those with less-than-perfect credit scores.

In general, lower credit scores could result in fewer offers from lenders. In those cases, you may be required to make a down payment or apply with a co-signer who has good credit.

Lower credit scores can also drive up the interest rate offered to you, which means you could end up paying more to finance your car than someone with good credit. Shopping around to see what rates and terms you might qualify for with different lenders can help you find a loan that fits your budget.

What credit score do you need to get 0% APR on a car loan?

To qualify for a 0% APR auto loan, you typically must have excellent credit scores. This could mean a score in the upper 700s or even in the 800s, depending on the credit-scoring model the lender uses.

Plus, you’ll usually need to get your auto loan through the automaker’s financing company, and you’ll be limited to the makes and models included in the 0% APR promotion. This APR is typically only available on new cars, as well.

Is it better to get a car loan from a bank or dealership?

You may be offered a similar interest rate, terms and fees whether you apply for a loan from a bank or through a dealership, but you won’t know for sure unless you shop around and compare offers.

In some cases, though, a car loan from a bank may be a better option. Although it’s not guaranteed, a bank may offer you a lower rate because dealers sometimes add a markup to your loan’s interest rate in exchange for arranging your financing. Another benefit: It can also prevent a situation where you fall in love with a car and accept the financing the dealer offers you before comparing other loan options.

Last, some banks offer the ability to apply for preapproval. If you’re preapproved, you’ll get an estimate for a loan rate and terms you’re conditionally approved for. Preapproval isn’t a guarantee of loan approval, but it provides helpful information. For example, knowing the maximum amount you can finance can help you stay on budget and avoid tempting upsells as you shop for a car.

Is a 72-month car loan a bad idea?

Whether a 72-month car loan is good or bad depends on your unique financial situation. It’s right in some cases, and wrong in others.

While a longer loan term can reduce your monthly payment, you may end up paying more in total interest over the length of the loan. You could also end up owing more on your car than it’s worth, which can make selling or trading in your car complicated and expensive down the road. And if your loan term is longer than your car warranty period, you could find yourself shelling out a hefty amount for car repairs while still making loan payments.

Still, a 72-month auto loan may be ideal if the lower monthly payments free up some cash to pay down higher-interest debt elsewhere more quickly.

Before getting a 72-month car loan, consider whether buying a less expensive vehicle or delaying your purchase until you can save for a larger down payment might be better options to make your loan more affordable.