GOBankingRates

All you need to Know About Car Loans

You have too much to worry about to be bogged down by car loans that are designed to make a profit at your expense. While auto financing is an unavoidable reality for some, searching for the best car loan rates can keep your finances balanced throughout the year.

When borrowers of new or used car loans finance a vehicle from a lender, the financial institution considers the car collateral. The car is used as security, in the event that the borrower defaults on the loan.

Used cars are more likely to wear down and become inoperable due to age, condition and maintenance issues, which is why some lender increase the range of used car auto loan rates to protect themselves from this potential loss.

On the other hand, newer vehicles -- while still facing an immediate depreciation just driving it off the dealership lot -- does not pose as great of a loss, should the borrower be unable to make good on repaying their auto loans.

There are several different types of car loans: loans for leasepre-approved, or refinance. GOBankingRates brings you the facts you need to find the right loan for your car.

There are a number of factors that contribute to the car loan rates you'll be offered by a lender.

  • FICO Score: A person's FICO score is one of the most influential guides that lenders use to determine whether borrowers are risky to lend money to.
  • Auto Loan Term: Another way lenders protect themselves and ensure that they get their money back on time and in less time, is to provide lower car loan rates for shorter car loan terms and slightly higher rates for longer terms.
  • Vehicle Type: As shared above, the age of your vehicle can play an important role in what rate you're offered.
  • Down Payment: Having an adequate down payment can help do a number of things like lower the total amount you'll need to finance , and by directly affecting the auto financing interest rate, even with dealer financing.

Find the best car loan rates in your region or state:

GOBankingRates brings you

Best Car Loans Rates

Explore Best Car Loan Rates

Most Read Car Loans Articles

BB&T Auto Loan Rates Today at 2.29% APR

Take the quick route to financing with low interest and flexible terms.

Read More »

3 Reasons Renting a Car Could Ruin Your Vacation Budget

First-class isn't looking too bad after all.

Read More »

4 Ways to Save on Car Loans in Riverside, Calif.

GOBankingRates lists four ways to save on car loans in Riverside. Learn how to get a lower APR on a loan for a new or used car.

Read More »

Santee Cooper Credit Union New Auto Loan Rates Today at 3.25% APR

Make low interest rates on a new car a reality in the new year.

Read More »

Auto Loan Rates Today: State Employees’ Credit Union at 1.75% APR

Summer is in full swing, a time of year when every kind of auto promo under the sun is here to choose from; but car buyers might forget th...

Read More »

Auto Loan Rates Today: Cardinal Community Credit Union at 2.82% APR

Financing terms up to 48 months help make that new purchase budget friendly.

Read More »

How No-Fee Skip-A-Pay Auto Loans Ease Holiday Budget Strain in Miami

Budgets get tight during the holidays, why not work with a credit union that understands that?

Read More »

Buy a New Car This Holiday Season With San Diego Auto Loan Rates as Low as 1.89% APR

GOBankingRates highlights Mission Fed's auto loan rate, which is currently as low as 1.89% APR.

Read More »

Types of Car Loans

Before you begin shopping for a car, it is important to know what auto financing qualifications you meet. Typically, auto loan rates are calculated based on the type of car you want to buy and your credit history. Additionally, you can get financing directly from a bank or have the dealer finance your auto loan.
  • Bad Credit Auto Loan
  • Used Car Loan
  • New Car Loan
  • Preapproved Auto Loan
  • Dealer Financing
  • Auto Refinance Loans