6 Types of Auto Loans

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

You can use auto loans to buy new cars, used cars, buy out a lease, and refinance existing auto loans. Every lender has its own requirements for auto loans, and individual interest rates will vary based on your credit score, the age of the car, the type of loan you’re taking out, and the amount of equity you have in the car.

Learn more about the six different types of auto loans to find one that’s best for you:

6 types of auto loans

Several different types of auto loans are available, depending on your credit score and particular situation.

New-car loan

New-car loans are exactly what they sound like — loans that you take out to buy a new car. All other things being equal, new-car loans typically have the best interest rates out of all of the loan types listed here because new cars have the longest anticipated life.

You can get a new-car loan through a dealership, bank, credit union, or an online lender that specializes in auto loans. Dealerships frequently get a commission from the banks they partner with to offer auto loans and may offer a lower purchase price on the car you’re buying if you finance through them. That lower purchase price may come with a higher interest rate — the bank has to make back that commission somehow. Shop around to make sure you’re getting the best rate possible.

Keep in mind: If the dealership’s lower price is worth the higher interest rate, you may be able to refinance your auto loan later to a lower rate.

Used-car loan

Used-car loans are available from all the same places new-car loans are. You can get a used-car loan from a bank, dealership, credit union, or online lender. You can also use these loans to buy cars from private parties, saving you thousands in dealer fees in the process.

Keep in mind that used-car loans for very old cars can be difficult to find because some auto lenders will only finance vehicles under a certain age or mileage limit. If you’re on a tight budget or looking to buy a 20-year-old beater for your teenager to learn to drive on, you may be able to get a personal loan to purchase the car with instead.

The personal loan companies in the table below compete for your business through Credible. You can request rates from all of these partner lenders by filling out just one form (instead of one form for each) and without affecting your credit score.

Lender Fixed rates Loan amounts

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
9.95% – 35.99% APR $2,000 to $35,000**
  • Fixed APR: 9.95% – 35.99% APR
  • Variable APR: N/A
  • Min. credit score: 550
  • Loan amount: $2,000 to $35,000**
  • Loan terms (years): 2, 3, 4, 5*
  • Time to fund: As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except CO, IA, HI, VT, NV NY, WV
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Loan servicer: Avant
  • Loan Uses: Debt consolidation, emergency expense, life event, home improvement, and other purposes
  • Min. Income: $1,200 monthly

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.79% – 14.99% APR $10,000 to $50,000
  • Fixed APR: 7.79% – 14.99% APR
  • Variable APR: N/A
  • Min. credit score: 700
  • Loan amount: $10,000 to $50,000
  • Loan terms (years): 3 to 6
  • Time to fund: Next business day
  • Fees: No prepayment penalty
  • Discounts: None
  • Eligibility: Available in all 50 states
  • Customer service: Phone
  • Soft credit check: Yes
  • Min. Income: Does not disclose
  • Loan Uses: Debt consolidation, home improvement, self-employment, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.99% – 35.99% APR $5,000 to $50,000
  • Fixed APR: 7.99% – 35.99% APR
  • Variable APR: N/A
  • Min. credit score: 600
  • Loan amount: $2,000 to $50,000
  • Loan terms (years): 2, 3, 4, 5
  • Time to fund: As soon as 1 to 3 business days after successful verification
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all states except DC, IA, VT, and WV
  • Customer service: Phone
  • Soft credit check: Yes
  • Loan servicer: Best Egg and Blue Ridge Bank
  • Min. Income: None
  • Loan Uses: Credit card refinancing, debt consolidation, home improvement, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
5.99% – 24.99% APR $2,500 to $35,000
  • Fixed APR: 5.99% – 24.99% APR
  • Min. credit score: 660
  • Loan amount: $2,500 to $35,000
  • Loan terms (years): 3, 4, 5, 6, 7
  • Time to fund: As soon as the next business day after acceptance
  • Fees: Late fee
  • Discounts: None
  • Eligibility:  Available in all 50 states
  • Customer service: Phone
  • Soft credit check: Yes
  • Loan Uses: Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.99% – 29.99% APR $7,500 to $50,000
  • Fixed APR: 7.99% – 29.99% APR
  • Min. credit score: Does not disclose
  • Loan amount: $10,000 to $50,000
  • Loan terms (years): 2, 3, 4, 5
  • Time to fund: As soon as 2 business days
  • Fees: Origination fee
  • Discounts: No
  • Eligibility: Available in all states except CO, CT, HI, KS, NH, NY, ND, OR, VT, WV, WI, and WY
  • Customer service: Phone
  • Soft credit check: Yes
  • Min. Income: None
  • Loan Uses: Debt consolidation, home improvement, wedding, travel, medical expenses, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
5.99% – 24.99% APR $5,000 to $40,000
  • Fixed APR: 5.99% – 24.99% APR
  • Min. credit score: 600
  • Loan amount: $5,000 to $40,000
  • Loan terms (years): 2, 3, 4, 5
  • Time to fund: As soon as 2 to 5 business days after verification
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all states except MA and NV
  • Customer service: Phone, email, chat
  • Soft credit check: Yes
  • Min. Income: None
  • Loan Uses: Debt consolidation and credit card consolidation only

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.04% – 35.89% APR $1,000 to $40,000
  • Fixed APR: 7.04% – 35.89% APR
  • Min. credit score: 600
  • Loan amount: $1,000 to $40,000
  • Loan terms (years): 3, 5
  • Time to fund: Usually takes about 2 days
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all 50 states
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Loan servicer: LendingClub Bank
  • Min. Income: None
  • Loan Uses: Debt consolidation, paying off credit cards, home improvement, pool loans, vacations, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.99% – 35.99% APR $2,000 to $36,500
  • Fixed APR: 7.99% – 35.99% APR
  • Min. credit score: 580
  • Loan amount: $2,000 to $36,500
  • Loan terms (years): 2, 3, 4, 5, 6
  • Time to fund: As soon as the next business day
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except NV and WV
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. Income: $20,000
  • Loan Uses: Home improvement, consolidate debt, credit card refinancing, relocate, make a large purchase, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
3.99% – 19.99% APR $5,000 to $100,000
  • Fixed APR: 3.99% – 19.99% APR
  • Min. credit score: 660
  • Loan amount: $5,000 to $100,000
  • Loan terms (years): 2, 3, 4, 5, 6, 7*
  • Time to fund: As soon as the same business day
  • Fees: None
  • Discounts: Autopay
  • Eligibility: Available in all states except RI and VT
  • Customer service: Phone, email
  • Soft credit check: No
  • Loan servicer: LightStream
  • Min. Income: Does not disclose
  • Loan Uses: Credit card refinancing, debt consolidation, home improvement, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
6.99% – 24.99% APR1 $3,500 to $40,0002
  • Fixed APR: 6.99% – 24.99% APR1
  • Min. credit score: 660
    (TransUnion FICO®️ Score 9)
  • Loan amount: $3,500 to $40,0002
  • Loan terms (years): 3, 4, 5, 6
  • Time to fund: Many Marcus customers receive funds in as little as three days
  • Fees: None
  • Discounts: Autopay
  • Eligibility: Available in all 50 states
  • Customer service: Phone
  • Soft credit check: Yes
  • Loan servicer: Goldman Sachs
  • Min. Income: $30,000
  • Loan Uses: Credit card refinancing, debt consolidation, home improvement, major purchase, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
18.0% – 35.99% APR $1,500 to $20,000
  • Fixed APR: 18.0% – 35.99% APR
  • Min. credit score: None
  • Loan amount: $1,500 to $20,000
  • Loan terms (years): 2, 3, 4, 5
  • Time to fund: As soon as the same day, but usually requires a visit to a branch office
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Must have photo I.D. issued by U.S. federal, state or local government
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. Income: Does not disclose

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.74% – 17.99% APR $600 to $50,000
(depending on loan term)
  • Fixed APR: 7.74% – 17.99% APR
  • Min. credit score: 660
  • Loan amount: $600 to $50,000*
  • Loan terms (years): 1, 2, 3, 4, 5
  • Time to fund: 2 to 4 business days after verification
  • Fees: None
  • Discounts: None
  • Eligibility: Does not disclose
  • Customer service: Phone, email
  • Soft credit check: No
  • Min. Income: Does not disclose
  • Loan Uses: Debt consolidation, home improvement, transportation, medical, dental, life events

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.95% – 35.99% APR $2,000 to $50,000
  • Fixed APR: 7.95% – 35.99% APR
  • Min. credit score: 640
  • Loan amount: $2,000 to $50,000
  • Loan terms (years): 2, 3, 4, 5
  • Time to fund: As soon as one business day
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all states except IA, ND, WV
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. Income: None
  • Loan Uses: Debt consolidation, home improvement, vehicles, small business, new baby expenses, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
5.99% – 35.99% APR $3,500 to $40,000
  • Fixed APR: 5.99% – 35.99% APR
  • Min. credit score: 600
  • Loan amount: $3,500 to $40,000
  • Loan terms (years): 2, 3, 4, 5
  • Time to fund: 90% funded within a day13
  • Fees: Origination Fee, $15 Late Fee, $25 NSF Fee
  • Discounts: None
  • Eligibility: Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Loan servicer: Reach Financial
  • Min. Income: $1,000 monthly
  • Loan Uses: Debt consolidation, credit card refinancing

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
7.99% – 23.43% APR10 $5,000 to $100,000
  • Fixed APR: 7.99% – 23.43% APR10
  • Min. credit score: Does not disclose
  • Loan amount: $5,000 to $100,000
  • Loan terms (years): 2, 3, 4, 5, 6, 7
  • Time to fund: 3 business days
  • Fees: None
  • Discounts: Autopay
  • Eligibility: Available in all states except MS
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. Income: Does not disclose
  • Loan Uses: Solely for personal, family, or household uses

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
11.69% – 35.93% APR7 $1,000 to $20,000
  • Fixed APR: 11.69% – 35.93% APR7
  • Min. credit score: 560
  • Loan amount: $1,000 to $50,000
  • Loan terms: 3 to 5 years 8
  • Time to fund: Within one day, once approved9
  • Loan types: Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: A U.S. citizen or permanent resident; not available in DC, SC, WV
  • Customer service: Phone, email
  • Soft credit check: Yes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

6.95% – 35.97% APR $1,000 to $50,000
  • Fixed APR: 6.95% – 35.97% APR
  • Min. credit score: 560
  • Loan amount: $1,000 to $50,000*
  • Loan terms (years): 2, 3, 5, 6
  • Time to fund: Within a day of clearing necessary verifications
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except West Virginia
  • Customer service: Email
  • Soft credit check: Yes
  • Min. Income: Does not disclose
  • Loan Uses: Debt consolidation, credit card refinancing, home improvement, and other purposes

Credible Rating

Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
5.4% – 35.99% APR4 $1,000 to $50,0005
  • Fixed APR: 5.4% – 35.99% APR4
  • Min. credit score: 580
  • Loan amount: $1,000 to $50,0005
  • Loan terms (years): 3 to 5 years4
  • Time to fund: As fast as 1 business day6
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all 50 states
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. Income: $12,000
  • Loan Uses: Payoff credit cards, consolidate debt, take a course or bootcamp, relocate, make a large purchase, and other purposes
Compare rates from these lenders without affecting your credit score. 100% free!Compare Now
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | 10SoFi Disclosures | Read more about Rates and Terms

Auto refinancing loan

Refinancing your auto loan lets you replace your existing loan with a new one, which could save you thousands of dollars in the right situation. You can refinance an auto loan through many banks, credit unions, and online lenders.

If you originally purchased your vehicle when your credit score was lower and were given a very high interest rate, you may be able to get a significantly lower interest rate now, which could drastically reduce your monthly payment.

Before refinancing, make sure you consider the new interest rate, any fees, and your new monthly payment amount. Make sure that refinancing will benefit you in the end by lowering your monthly payment or allowing you to pay off your loan sooner.

When you refinance your auto loan, you can sometimes pull out any equity you have in the car. The equity you have is the difference between what the car is worth on paper and what you owe on it. Be careful when pulling out your equity, especially when refinancing into a longer loan term.

Good to know: It’s easy to become upside down on your auto loan as your car ages, which means you owe more on your car than it’s worth. Don’t get stuck in a situation where you’re paying on a loan for years after the car has stopped working.

Lease buyout loan

A lease buyout loan is a loan that allows you to purchase the vehicle you’ve been leasing. You can take one out to keep the car yourself or turn around and sell it again if it’s worth more than the lease buyout and you don’t want to keep it.

Lease buyout loans are available directly through dealerships, as well as some banks, credit unions, and online lenders.

Check Out: Should You Buy or Lease a Car? Pros and Cons of Each

Auto loans for bad credit

Some dealerships offer financing for buyers with bad credit, but some online lenders also specialize in bad credit auto loans.

You can find legitimate bad credit auto loan lenders, but make sure you’re working with a reputable lender. You may come across“buy-here, pay-here” dealerships that specifically prey on people who struggle to get approved for vehicle financing through traditional lenders.

It’s important to still shop for rates when you have bad credit to make sure you’re not being taken advantage of. When requesting rate quotes, verify in writing that they are soft inquiries that won’t ding your credit.

With high interest rates, a huge portion of your monthly payment will go toward interest and it will take a while to build equity. Try to lower your car-shopping budget to something you can definitely afford so sudden repair costs are easy to cover. If you can’t keep up with payments, your lender can repossess your car. But you’ll be left with even worse credit and be on the hook for payments on a vehicle you don’t even have.

First-time car buyer loans

Unfortunately, lenders frequently view having no credit history the same as having bad credit. If you have time before you need a car, you may be able to build credit by being added as an authorized user on someone else’s credit card or getting a secured credit card through your bank.

If you aren’t able to build credit before you buy a car, you can get financing through dealerships specializing in first-time buyers, and through some banks and online lenders. Look for dealerships near colleges or ask your existing bank if it has any loan options for first-time car buyers for the best chances of finding a good rate.

Worth Reading: How to Build Credit Fast and Effectively

How to apply for an auto loan

If you’re ready to apply for an auto loan, follow these eight steps:

  1. Check your credit report. You can check your credit report for free annually at AnnualCreditReport.com. If you spot any errors, you can dispute them with the credit bureau.
  2. Check your savings and decide how much (if any) to use as a down payment. You want to have enough left in savings to cover any repairs that could come up, plus your standard emergency fund. But you want to put enough down to get a good interest rate and save on your payments later.
  3. Get prequalified for an auto loan. You can use Credible’s prequalification tool to get an idea of what you’re approved for and your estimated monthly payments, all without impacting your credit score.
  4. Check that the monthly payment fits into your total budget. You shouldn’t miss out on rent, going to a concert with friends, or saving for your future for the sake of your car payment. Use whatever budget tracker you’re comfortable with to make sure you’re buying a car you can comfortably afford.
  5. Pick out a car. With your budget in mind, you can start reviewing what type of car you want and research things like estimated repair costs and longevity for certain models.
  6. Negotiate with the seller or dealer. Once you’ve narrowed down exactly what car you want, negotiate with whoever is selling it. Currently there is a national chip shortage so cars are in high demand with little room for negotiation, but you may still be able to get the price down.
  7. Pick and sign your loan. Once all negotiation is done, it’s time to decide on and sign your loan. Dealerships often tack on expensive maintenance plans and warranties at the last minute. Consider whether or not one is a sound financial choice now so you’re educated about your options when the time comes.
  8. Keep up with car maintenance and your monthly payments. You spent all this time picking out and buying a car, so it’s important to take care of it. Keeping up with oil changes, tire rotations, and other routine maintenance can save you thousands of dollars in repairs later. Set up automatic monthly payments so you never forget one.

When applying for an auto loan, pay special attention to these terms:

  • Interest rate and APR: The interest rate on the loan is how much you’ll pay to borrow the money you need for the car. The annual percentage rate (APR) is a number that breaks down any fees and charges for the loan itself over the course of the loan. The APR is a more realistic representation of what borrowing money will cost you every year. The higher your APR, the more of your monthly payment will be going to interest and fees.
  • Credit score: When you check your credit score, pay attention to any factors that may be lowering your score you can change. The Consumer Financial Protection Bureau advises that any errors can be disputed directly with the credit bureaus (Equifax, Experian, and TransUnion). If you have a high utilization percentage and have the money to pay down some of your balances without dipping into your down payment, you may be able to raise your credit score.
  • Prequalification and pre-approval: Prequalification and pre-approval are frequently used interchangeably, but they’re actually different things. Prequalification is a process that estimates what you’ll be approved for and usually comes with a soft credit inquiry and no verification of income or assets. Pre-approval usually involves a hard credit inquiry and income verification and can sometimes include a firm lending offer. Credible lets you see if you’re prequalified in under two minutes without affecting your credit score.
  • Loan term: As cars become more expensive, loan terms are becoming longer. Typical auto loans are for 36 to 60 months, but seven- and eight-year loan terms aren’t unheard of. Typical personal loan terms are anywhere between 12 and 60 months. Cars are depreciating assets, meaning that their value decreases over time. Go with the shortest loan term you can comfortably afford so you don’t end up trapped making payments for years on a car that can’t even take you anywhere.

When shopping for an auto loan, making sure that you have the right loan for you is crucial. Don’t be afraid to shop for rates and know what your options are. Go to the negotiating table armed with the options and knowledge to get the best deal possible.

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About the author
Rae Hartley Beck
Rae Hartley Beck

Rae Hartley Beck is a Credible authority on personal finance. Her work has been featured in Bankrate, MoneyWise, and Investopedia.

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