While private car loans usually have lower interest rates than unsecured personal loans, they have higher rates than when purchased at a dealership. PenFed Credit Union has partnered with the national car-buying service TrueCar to offer its members low auto loan rates on the market. Those borrowers, also known as high-risk borrowers, received an average APR of 2.34% for new cars and 3.66% for used cars. Preferred borrowers with a credit rating between 661 and 780 received an average APR of 3.48% for new loans and 5.41% for used loans, while non-preferred borrowers with credit scores between 601 and 660 received an average APR of 6.61% for new car loans and 10.49% for used ones.
When applying for an auto loan, car buyers can take out a loan against their car and then pay principal and interest over time through fixed monthly payments. The financial institution that lends you the money to buy a car will charge you an interest rate on that loan. A car loan is secured by a car and allows you to pay in fixed monthly payments instead of paying in cash in advance. When looking for a car loan, it's best to compare prices with some lenders before making a decision.
Consumers Credit Union offers auto loan rates to its members as low as 4.94% for new car loans of up to 60 months. The financing available depends on your credit rating and the amount you qualify to borrow, but you can only finance up to 100% of the value of the car. CarsDirect believes that everyone should have the option to buy the car they want, regardless of their credit history. Having a higher credit score may also allow you to apply for a larger loan or access a wider selection of payment terms, but there are still ways to finance a car with bad credit.
When it comes to the best car loan rates, each vendor offers variable rates to car buyers in different situations. CarsDirect also helps people with no credit history find personalized car loans through its national dealer network so they can begin to lay the foundation for a strong credit report.