Where to Apply for a Car Loan

TurbineScholar Updated: 2025-07-04

Numerous rates, conditions, and fees are associated with auto loans. It's critical to comprehend how they impact your monthly payment as well as the overall cost of your loan. To obtain competitive estimates, you are free to shop around for lenders.
Generally speaking, credit unions provide cheaper loan interest rates. They also provide affordable loan protection add-ons and personal auto-buying concierge services.

American Bank

For borrowers desiring the convenience and security of dealing with a major financial institution, Bank of America is an excellent option. The lender offers a variety of lending choices, such as lease buyouts and loans for both new and used cars. It also lets you prequalify for an auto loan before you shop and has an accommodating application process. It also pays current creditors directly for refinance loans and does not impose a prepayment penalty.
You can apply in person at a financial center, over the phone, or online. Enterprise Car Sales, CarMax, and Carvana are three independent dealers and franchise dealerships that are part of Bank of America's authorized dealer network. Through these dealerships, one can also purchase a car from a private seller. The Bank of America mobile app facilitates account management and payment processing. In a 2023 J.D. Power survey, it came in around the center for consumer satisfaction with luxury and mass-market auto loans. A rate discount can be available to borrowers with deposit amounts of at least $20,000.

Unions for credit

An additional well-liked option for auto financing is credit unions. They provide their members with a range of benefits, including flexible terms and low prices. Applying in person, over the phone, or online is all possible. Pre-approval is another service that some credit unions provide, and it might help you negotiate better terms at the dealership. Pre-approvals usually involve a light pull on your credit report, so your score is unaffected.
You will need to submit documentation of your income and other financial details in order to be approved for a credit union auto loan. You could also need to trade in your car or make a down payment. Serving the needs of their members comes first in credit unions' business models because they are not-for-profit institutions. Because of this, credit unions frequently provide lower interest rates than banks and car dealerships. However, because of their membership restrictions, they may not be as handy for certain borrowers as banks. Furthermore, credit unions typically have stricter underwriting policies than other lenders.

Dealerships

The dealer's internal financing options should be taken into consideration if you're thinking about purchasing a car from them. Frequently referred to as "buy-here, pay-here" finance, these loans are given by the dealership's owning lender. This may facilitate and expedite the car-buying procedure. On the other hand, hefty interest rates may also follow.
Comparing loan offers from banks, credit unions, and online lenders is still a smart idea. The vehicle loan interest rate comparison tool on Bankrate can be useful.
Remember that you might not be able to get an auto loan at all if your credit is terrible. If so, spend the next six to twelve months working to restore your credit before reapplying. You might be able to get less restrictive conditions and cheaper interest rates by doing this. Another useful tool is the free credit score app from NerdWallet. It gives you individualized information and lets you keep track of your score. All of the main mobile devices support it.

Internet lenders

Numerous lenders that operate exclusively online provide expedited auto loan application procedures and easy access to funds. They frequently provide lower costs and competitive interest rates in comparison to traditional banks. Additionally, they might be able to work with borrowers who don't have the best credit.
How much a borrower can afford to borrow, whether they are authorized for a loan, and the interest rate are all heavily influenced by their credit record and scores. It is advisable for borrowers to review their credit reports to make sure there are no inaccuracies, such as false accounts or late payments.
Knowing what kind of car you want to buy and researching the terms and rates of a loan are helpful. A down payment lowers the amount and risk of your loan. Additionally, some manufacturers and dealerships occasionally offer 0% APR auto loans. Before choosing a loan offer, make sure you evaluate them all. An auto loan calculator can assist you in doing this.