The most important step when buying a car is figuring out how you are going to pay for it. More often than not, paying for a car in cash is not entirely possible.
For this reason, financing with an auto loan is the best move for most people. With an auto loan, you can pay for your purchase over time with a monthly payment that you can afford. See more in the link below:
Before you sign a loan agreement with the first place that offers you financing, you should do some research and try to find the lowest interest rate that you can.
A lower interest rate will reduce your monthly payments and the total amount that you will end up paying for the car.
So, what are the best rates on auto loans in 2020, and how do you find them? Here is some important information that can help you out.
What to Consider Before Signing an Auto Loan?
The first thing you need to consider is your credit score. Are you able to qualify for a low interest rate? Are you even able to qualify for a loan at all?
Your credit score is the deciding factor lenders take into account when determining if they want to extend a loan offer to you.
You will need to make sure your credit score meets the minimum requirements of a lender.
Consider shopping around at a few lenders before making your decision. If you can, go through the approval process to get the most relevant quote and to see what your loan will look like.
Where Can I Find the Best Auto Loan Rate?
To save you some extensive research, this list will tell you the top credit union, national banks, and online lenders who can offer the best auto loan rates in 2020.
Best Overall
PenFed Credit Union
PenFed Credit Union offers surprisingly low rates. A 36-month new or refinanced loan will start as low as 2.14%. If you want to purchase a used car, the rate starts as low as 2.99% on a 36-month term.
They also offer a car buying service for their members, and if you choose to use it you will get a steep discount. The rates for the car buying service are as low as 1.39% for a new car and 2.24% for a used car.
To access a loan from this credit union, you will need to become a member, but the requirements to join are incredibly simple. Current and former military and their families automatically qualify in all 50 states and Puerto Rico. If you do not have any military affiliation, you will be allowed to join by making a one-time donation to the National Military Family Association or a $15 donation to Voices for America’s Troops.
Once you become a member, you can access auto loans as low as $500 up to $100,000. This is by far one of the widest range of loan amounts offered. Like most banks, you will need to have an excellent credit score to obtain the lowest rates.
Consumers Credit Union
Consumers Credit Union offers interest rates as low as 2.69% with autopay. If you are looking to purchase a new car and have a strong credit history and score, you will be able to qualify for the lowest interest rate possible at their credit union. The loan terms available range from 0 to 84 months. They do require a minimum credit score of 640.
To get the 2.69% rate listed above, there is one additional requirement you need to meet. You will need to set up autopay from a bank account in your name that is also at Consumers Credit Union.
To become a member, you must pay a one-time fee of $5. Once you meet this requirement, you will get a 0.50% discount on your interest rate. If you make automatic payments from another bank, your interest rate will be discounted by 0.25%.
Another great thing about this credit union is that they offer 100% financing for your car. This means that you may not have to pay any money for a down payment when you sign your loan agreement. You would only have to cover out-of-pocket expenses such as insurance and tags.
Best for Bad Credit
myAutoloan
If you have less than desirable credit, it may seem impossible to get an auto loan without having an insanely high interest rate. myAutoloan is actually a marketplace that makes it easy to compare multiple offers from different lenders based on your credit score and history.
This website gives you the ability to search multiple loan offers at once for lease buyout, private party, refinance, used, and new auto loans.
The best thing about this website is how efficient and quick it is. You fill out one form that only takes a few minutes to submit. After your application is complete, the system will automatically match you with up to four lenders.
Once you choose a lender, you will receive a certificate or a check for your purchase within 24 hours. The interest rate can be as low as 2.49%, and the minimum loan amount for purchase is $8,000 and $5,000 for a refinance.
Requirements will vary based on each lender that you will have access to during the online process, but typically you can be accepted with a credit score as low as 575 and still be considered eligible for a loan.
Keep in mind this service is only available in 48 states, so if you live in Alaska or Hawaii unfortunately this will not be an option for you.
Oportun
While you can’t always expect a low interest rate with bad credit, Oportun can save you from overpaying on your loan.
This online lender allows you to get an auto loan for a dealer purchase or a private party purchase. This is beneficial because buying from a private party is generally cheaper than buying from a dealership.
The minimum credit score to qualify for an Oportun loan is 500 as long as you make at least $2,000 a month. This is incredibly low compared to so many other lenders.
The loan amounts offered range from $5,000 to $35,000 so you can get almost any car you want. Oportun also does not require a hard pull on your credit, so checking them out won’t cause damage to your credit report.
The loan application is super quick and is completed completely online. In most cases, you will be given an instant decision on your application.
Capital One
Capital One is a great option for less than perfect credit. If you are more comfortable working with a more well-known bank, Capital One allows you to submit a request for a pre-qualification so you can find out if you qualify without having to take a hard hit on your credit report.
This can be done through the bank’s online service called Auto Navigator. If you get a prequalification from Capital One, it will be valid at 12,000 dealerships or more across the country. You will be able to find where you can use the offer on the Capital One website.
Best Online Experience
Carvana
Carvana is a lender and dealership that allows you to complete the car buying process, start to finish, from the comfort of your own home. Yes, the power of the internet.
There is no minimum credit score requirement, so it will be beneficial to those who have a fair credit score. To qualify, you must have an annual income of at least $10,000 and no current or active bankruptcies.

Per usual, borrowers with the best credit will get the lowest interest rate offers. The lowest interest rate offered by Carvana is 3.9%. They also offer a nifty tool on their website that allows you to get an estimate of what your monthly payment might be depending on the loan amount you are asking for and your credit.
Conclusion
Qualifying for an auto loan with a low interest rate can save you money on your monthly payments as well as the total amount that you will pay for your car. You should check out more than one lender before agreeing to sign a loan offer because it is always possible that someone else can offer you a better loan.
Check out each of the six lenders listed above to see if you will qualify for one of their loans. Whether you choose a credit union, big bank, or online bank, make sure you get the best rate you can find.