2.49% APR
2.39% APR
Compare Auto Loan Rates Today
Auto loans are typically secured loans that charge simple interest, interest calculated on your loan balance, over two to seven years. Your auto loan interest rate is determined by your credit score, loan term and amount, along with the value of the car itself.
While many buyers shop for a car loan at the same time they’re shopping for a car, a better way is to compare annual percentage rates (APRs) across multiple lenders to make sure you’re getting a competitive rate. If the dealer can beat it, you’ll know you’re getting a fair offer.
Comparing loan rates before you buy a new or used car puts you in a stronger negotiating position at the dealership. This is true whether you have strong credit or need a car loan for bad credit. The lenders above are a good place to start your search.
The higher your credit score, the better rate you’ll receive on an auto loan. Borrowers with good credit can expect to receive an APR around 5.59% or lower for used car loans and 3.69% or lower for new cars. It’s possible to get 0% financing from auto manufacturers, but 0% APRs are typically reserved for those with excellent credit (740+) and may only be available on certain makes and models.
| Average auto loan rates by credit score | ||
| Credit score | New car avg. APR | Used car avg. APR |
| 781-850 | 2.65% | 3.80% |
| 661-780 | 3.69% | 5.59% |
| 601-660 | 6.64% | 10.13% |
| 501-600 | 10.58% | 16.56% |
| 300-500 | 14.20% | 20.3% |
Source: Experian State of the Automotive Finance Market Q4 2020
Estimate your monthly car payment with our Auto Loan Calculator for both new and used cars.
Whether you’re just starting out and have no credit history, or have simply made some credit mistakes along the way, it’s still possible to get an auto loan. Many lenders provide car loans for bad credit.
Once you have a car loan, making on-time payment can help improve your credit score. You may be able to later refinance your car loan at an even better rate. If you’d like to improve your chances of being approved or possibly get a lower rate now, consider adding a cosigner, making a large down payment or both.
Apply to a couple of our best auto lenders or your own bank, credit union or online lender directly — without a middleman — and then ask the dealer to beat your preapproved rate.
Yes, you can negotiate APR the same way you negotiate the car’s price by showing the dealer that your own lender gave you a lower rate. You can also ask the dealer what it would take to get a “tier bump.” Dealers sort borrowers into tiers by credit score — the higher the tier, the lower your APR. They may say that you need to put more money down or get a cosigner in order to reach a higher tier.
It’s best to apply to both: a bank, credit union or online lender and the dealer so you have options and can choose the best car loan for you.
The average APR for an auto loan was 9.46% in 2020, but it’s possible to get a lower rate, especially if your credit is strong. Credit unions tend to offer some of the lowest starting rates we’ve seen if you meet their membership requirements, which may be easier than you think. Car manufacturers offer 0% financing, but those deals require high credit scores and only apply to certain models. Used car loans tend to have higher starting rates than new, but manufacturers do offer APR deals on certified pre-owned cars.
To get a car loan, first use an auto loan calculator to figure out how much car you can afford and then apply to a few lenders online or in person. You could fill out an online form at LendingTree and get up to five car loan offers from lenders at once, depending on your creditworthiness.
When you accept a car loan, a lender provides a lump sum of money for the purpose of buying a vehicle that you agree to repay with interest over a set period of time for a set monthly payment. The size of that monthly payment depends on how much you borrow, for how long and at what interest rate. The loan is secured by the car itself — if you fail to repay it, the lender could repossess the car. Read more in our first-time car buyer’s guide.
When deciding between auto loan offers, consider the APR, the reputation of the lender and how much you’ll pay for the loan in total. A low APR on a long-term auto loan could result in the loan costing more overall. That’s why it’s important to compare monthly payments and total interest costs to see which option is better for you.
Automakers, credit unions, banks and online lenders could all potentially provide a low rate. You’ll never know what you qualify for until you apply. Applying to multiple lenders within a two-week window will not hurt your credit score any more than applying to one lender. Any drop to your credit score will be slight and temporary.