Car Loans for Good, Fair and Bad Credit

To put yourself in a stronger position when car shopping, it’s a smart idea to get pre-approved for a car loan before you visit the lot to buy your car. Pre-approval removes the uncertainty of the loan application process and allows you to easily compare interest rates so you can get the best auto loan. Read more about the online auto-loan process below.

Lender	Loan Amount	Minimum FICO	Maximum Loan Term	Key Facts
Learn More	$5,000 - $100,000	680	84 months	Available in all 50 states Offers rate match program Offers $100 loan experience guarantee
Learn More	$10,000 - $50,000	500	72 months	Available in 44 states Exceptions: NV, ND, MI, TN, OR, and HI BBB accredited
Learn More	$8,000 - $99,000	475	72 months	Available in all mainland states (excludes AK and HI) Online portal shows up to four offers for comparison via multiple hard credit inquiries BBB accredited
Learn More	No restriction	300	72 months	Choose your own financing terms Financing available only for cars bought through the Carvana website Free delivery currently available in Atlanta, Nashville, Birmingham, Charlotte, Raleigh, Dallas/Ft. Worth, Houston, Austin, and San Antonio Carvana has delivered cars in 43 states to date

Here’s how getting pre-approved for an auto loan online works:

1. Once you apply, the lender will quickly contact you with a decision, often within an hour. If your loan is approved, the lender will offer you a maximum amount you can borrow at a fixed interest rate. For example, they might offer a $20,000 loan at 3.9 percent.
2. If you agree to these terms, the lender will give you a no-obligation check or certificate you can take to the dealership or car lot. (Note: some lenders have restrictions on where cars can be purchased using their loan. For example, some lenders won’t grant loans to buy cars from private party sellers.)
3. Negotiate your best deal for the car being sure to leave enough money to cover taxes and fees. For example, if the loan is for up to $20,000, look for a car in the $15,000 range because the final price will be about $16,500 or higher.
4. Once you pay for the car with the lender’s check, the loan is finalized at that amount.

Pre-approval helps streamline the negotiation process because you can sidestep the car salesperson’s favorite tactic: the monthly payment game. If you negotiate for a monthly payment instead of the price of the car, it’s easy for the salesman to obscure the real price. But with a pre-approved check in hand, you become a “cash buyer,” meaning that you can ignore the monthly payment question and concentrate on negotiating only the price of the car.

Here are other points to keep in mind as you shop for an online car loan:

• Apply to several lenders to find your best interest rate. But do this within a two-week period to minimize damage to your credit that can be caused by multiple credit checks over an extended period.
• Be sure to check the loan terms offered by your bank or credit union. Their rates are often very competitive.
• Gather all your financial documents before beginning the loan application process: driver’s license, bank account numbers and pay stubs.
• Set up your loan so you pay it off as quickly you comfortably can. Shorter terms usually mean lower interest rates.
• Be careful: If you’re shopping at a dealership, the finance manager will probably try to “flip” you — get you to use the carmaker’s financing. It doesn’t hurt to hear the pitch but make sure all the terms — particularly the length of the payback period — are the same so you can compare the dealership’s offer accurately to your pre-approved loan.

When shopping for a car loan it’s important to be realistic. Just because interest rates are low doesn’t mean you should buy too much car. And remember, the most important thing for you, your budget and your credit score is to keep up with the payments and get the loan paid off on time.