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An In-Depth Wells Fargo Auto Loans Review: What You Need To Know

Taking out a car loan comes with making important decisions. That is why this Wells Fargo auto loans review will provide you some essential details that you must know and should carefully consider before signing any car loan document from the company.

Wells Fargo Auto Loans Review

Based on an Experian study published in March 2020, the American people do already have an existing $1.3 trillion in auto loan debt as of 2019, which is an 81% increase as compared to how much it was back in 2009.

Furthermore, to date, Americans owe more by average as compared to a decade ago. In fact, the average debt is $19,231 already, which has increased by 25% from 2009 as well.

Meanwhile, according to a study by the Federal Reserve, around 35% of American adults rely on an auto loan to pay for car purchases in the same year.

Although the increase of the number of American people taking out a car loan seems to continue this year and the years to come, according to a Finder article, “the percentage of Americans with car loans has actually decreased over the past few years.

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Nevertheless, one thing’s for sure – Americans do get auto loans to be able to purchase vehicles that they have been eyeing for.

Now, similar to any other loans out there, there are a lot of lending companies or financial institutions that provide auto loans. In fact, the industry is pretty much competitive.

Among the financial institutions that offer auto loans is Wells Fargo. Yes, it is one of the very well-known banks in the country.

But just like what we always say whenever we make reviews, as borrowers, we owe it to ourselves to research before we deal with any lending company or financial institution. It is our responsibility to know the details and be informed to avoid regretting it in the end.

Having said that, in this Wells Fargo auto loans review, we are going to provide you some if not most of the details that we though borrowers need to know before signing any auto loan document from the said financial institution.

In particular, we are going to provide you answers to the following – most commonly asked – questions:

  • What is Wells Fargo?
  • What auto loan products do Wells Fargo offer?
  • What do borrowers need to know about Wells Fargo auto loans?
  • Who qualifies for a Wells Fargo auto loan?
  • How to apply for a Wells Fargo auto loan?
  • What are the pros and cons of Wells Fargo auto loans?

WHAT IS WELLS FARGO?

Wells Fargo and Company or simply known as Wells Fargo is an American multinational financial services company.

While it is headquartered in San Francisco, California, the company does have central offices across the United States.

Based on its market capitalization, Wells Fargo is the world’s fourth-largest bank. More so, it is ranked as the fourth-largest bank in the US based on total assets.

As earlier mentioned, Wells Fargo is a multinational financial services company. It particularly engages in banking, investments, insurance, mortgage, as well as consumer and commercial finance.

Furthermore, the financial institution operates through various segments, which include Wholesale Banking, Community Banking, as well as Wealth and Investment Management, and many more.

The Community Banking segment in particular offers a complete line of financial products for both individual consumers and small businesses, which include checking and savings accounts, credit and debit cards, as well as student, small business, and automobile lending. The latter being our highlight in this review.

By the way, recently, the bank was involved in an auto insurance scandal, which in a way tarnished the bank’s reputation.

If you want to know more about it, and how the company managed such a challenge in their business, watch the video below by The Young Turks:

WHAT AUTO LOAN PRODUCTS DO WELL FARGO OFFER?

Wells Fargo is definitely one of the biggest rather largest auto lenders in the country today.

But although it is known to have a really good reputation when it comes to the products and services it provides, as borrowers, it is important that you still look into the details — in this case, about what particular auto loan products does the company provides.

First and foremost, it is important to take note that starting annual percentage rates (APR) will be based on the lender’s credit scores and the amount of income and debt he or she has.

Wells Fargo offers a variety of auto loan products, which include the following:

  • New Car Financing – This product is available for those who want to buy a new car directly from a dealer. Generally speaking, this does have a fairly low starting APR — somewhere around 4%.
  • Used Car Financing – This product is ideal for people who are either planning on buying a used car from a dealer, or those who are opting to buy from a private car seller. If you choose to buy from a private seller, the ARS is usually around 7%.
  • Lease Buyout Financing – This product is applicable to those who leased a car and eventually decide to keep it by the end of the lease term. If you opt to buy the car instead, the APR usually are close to 4.5%

While it does offer a good variety of auto loan products, unfortunately, Wells Fargo does not offer auto loan refinancing for borrowers who have an existing car loan but are not satisfied with their current rate.

You see, based on the firm’s list of auto loan products, as a car buyer or as a borrower, you really also need to take time to consider what kind of product you will go for. If we are going to base it on APR though, buying a new car does have better rates. But again, the final rates will depend on your qualification, particularly, your creditworthiness.

So, the better your credit score is, the more likely you are to get better rates.

WHAT DO BORROWERS NEED TO KNOW ABOUT WELLS FARGO AUTO LOANS?

As we mentioned earlier, this Wells Fargo auto loans review will provide you with important details you need to know before applying for an auto loan from the firm.

Apart from APR, there is actually more information that you, as a borrower needs to know to avoid confusion or worse, regretting the decision you made.

In particular, we are going to provide you information on the following:

  • Loan Amounts
  • Interest Rates
  • Loan Terms
  • Fees and Penalties
  • Discounts
  • Disbursement of Funds
  • Limitations
  • Other Information

Now, let’s get to it one by one —

Loan Amounts

While it is important to have a specific amount in your head, it is also important to consider the loan amounts offered by the lending company or financial institution you are looking for. By doing so, it helps you reconsider your options, or you can stick to it and just specifically look for a lender that could cater to your needs.

At Wells Fargo, it is important to note that the funding a borrower gets from an auto loan depends on a number of factors including credit score, credit history, as well as the type of car the borrower is eyeing for.

Wells Fargo, however, provides funding that starts from $5,000 and without an upper limit. Please take note, though, that the amount borrowed will depend also on the state you are from.

But technically, compared to other lenders, Wells Fargo definitely has one of the best and most flexible loan amounts.

Interest Rates

Another important thing to factor in when looking for an auto lender is the interest rate. Every lender does have their own rates and qualifications on specific rates.

However, as a general rule, people with high credit scores usually end up having the best rates possible. Meanwhile, borrowers with fair or poor credit score get a higher interest rate.

The company’s auto loan rates usually range from 0% to 11%, with an average of 4.99%. But for your reference, here’s what APR you can expect based on auto loan type:

  • New Car Financing – around 4%
  • Used Car Financing – around 7%
  • Lease Buyout Financing – around 4.5%

Again, as mentioned, the final APR will depend on several factors especially your credit score. Thus, we highly recommend working on having a high or excellent credit score to be able to take advantage of lower rates and other perks.

Loan Terms

Loan terms refer to the length of time you are going to repay the loan. It’s definitely another factor to consider when taking out a loan as you need to gauge if you are able to pay off the loan based on agreed terms.

As compared to other lenders with a lot of loan term options, some even offer long repayment periods, with Wells Fargo, the firm’s auto loans do only offer repayment periods between 60 months and 75 months (average).           

So, if you are looking at repaying on a longer-term, you may then consider other lending companies instead.

By the way, it is important also to keep in mind that if you will opt for long repayment terms, this could probably lead to paying more in interest over the life of the loan as compared to paying it off in a shorter period of time.

Fees and Penalties

Apart from APR, another money-related factor to consider when taking out a loan, or in this case, an auto loan, is fees and penalties.

Although Wells Fargo does not charge early payment fees, which means a borrower can repay the loan any time before it is due without having to worry about such charges, Wells Fargo borrowers could run into potential late fees and a credit score impact if they make a late payment.

In addition, a borrower may have to pay additional charges in specific states because of insufficient funding in his or her account.

Currently, the company decided to halt lending money to most independent car dealerships because of the financial fallout brought by the current COVID-19 pandemic. Just so you know if you are intending to get into this.

Discounts

Being one of the country’s largest auto lenders, it is not surprising that Wells Fargo offers perks.

In particular, the firm offers discounts to borrowers who are already Wells Fargo customers, as well as those in the military.

Disbursement of Funds

If you need quick credit decisions, and fast funding (in as soon as same-day), then Wells Fargo may just be the right match for you.

Yes, the firm could provide you with the amount you need as soon as the same day you applied for an auto loan — provided, of course, you pass all the requirements and qualifications.

Limitations

While some auto lenders may provide funds for any type of vehicle, with Wells Fargo, there are some limitations.

There are certain vehicles that are not eligible for Wells Fargo financing. This includes large commercial-type vehicles (like dump trucks) as well as vehicles that auto manufacturers have already discontinued.

This is very important also when taking out an auto loan. Make sure that the vehicle you are purchasing is eligible for the lender’s auto loan products.

Other Information

Apart from the details and/or information we have already mentioned, Wells Fargo also has another feature that borrowers must look into.

Unlike other auto lenders, the firm allows borrowers to change the due date on your payment loan once over the entire period of the loan. This may come very handy if a borrower fell short on cash one month or that he or she wants to line up the car loan payment due date with his or her paycheck schedule.

To be fair, this kind of feature is not that common among lenders, so, it’s nice to take advantage of it if the need arises.

WHO QUALIFIES FOR A WELLS FARGO AUTO LOAN?

As part of this Wells Fargo auto loans review, we are also going to provide you what you need to be able to borrow money from the firm.

First off, you have to have fair to excellent credit score. Based on Wells Fargo’s Q1 2020 quarterly report, during the first quarter of the year, nearly 34% of auto loans issued by it went to borrowers with FICO scores under 680.

So, if your credit score is somewhere around that, there is a chance that you can also get approved for an auto loan.

Apart from the FICO score, auto loan borrowers must also present a copy of the following financial documents during the application process:

  • Social security number
  • Previous and current residential addresses
  • Employment history and status of current employment
  • Proof of income
  • A statement that details your rent or mortgage payments on your home or apartment

In addition, you will also need to provide details on the vehicle you intend to apply for an auto loan. Details such as the following:

  • VIN
  • Year
  • Make
  • Model
  • Mileage

Similar to other types of loans, when applying for a Wells Fargo auto loan, make sure you are:

  • A U.S. citizen or a permanent resident card holder
  • At least 18 years old (or 19 years old depending on the state)
  • Employed or are self-employed

HOW TO APPLY FOR A WELLS FARGO AUTO LOAN?

At the moment, the only way to apply for a Wells Fargo auto loan is by filling out a credit application with a dealer within the firm’s network. Currently, Wells Fargo does have 11,000 partner dealerships.

Unfortunately, though, a list of their network of dealers is not available on their website, which means borrowers need to call and ask dealers directly if they work with Wells Fargo.

Once you found a dealer that is within the firm’s network, you will then have to fill in an application form that dealers send over to Wells Fargo underwriter for assessment and approval.

It is important to take note that Wells Fargo conducts a hard credit check, which may affect your credit score.

Once approval is granted, expect funding in as soon as the same day as the auto loan application.

WHAT ARE THE PROS AND CONS OF WELLS FARGO AUTO LOANS?

To sum up this Wells Fargo auto loans review, at the same time, to help you make an informed decision, we are also listing down the things that we like and the things that we do not like about Wells Fargo auto loans.

As you know, while the firm has its share of good things, like any other lenders out there, it does have its share of flaws as well. As borrowers, it is important to know it all so you get to consider them when making a decision.

Anyway, here’s our list of pros and cons for your reference:

PROS

  • Wells Fargo does have better rates as compared to other auto lenders out there.
  • The firm can fund your up to 100% of the amount of the vehicle you are purchasing.
  • Fees are included in your monthly payments instead of charging them upfront.
  • Wells Fargo auto loans do not require down payment.
  • It offers discounts to Wells Fargo customers availing an auto loan, as well as those working in the military.
  • It does not have a minimum credit score requirement, which makes it appealing to all types of customers.

CONS

  • You need to go through a dealership within its network in order to avail of a Wells Fargo auto loan.
  • The company website is not as informative as other websites — it does not include a list of partner dealerships.
  • Wells Fargo does not offer a refinancing option.
  • Wells Fargo auto loans are only available for up to 75 months.
  • The company, unfortunately, has been involved in a recent auto insurance scandal that may deter customers from using the bank’s auto loan products.

FINAL THOUGHTS ON WELLS FARGO AUTO LOANS

Wells Fargo may have its share of highs, but, it sure does have its lows as well, which is not surprising. After all, there’s no such thing as a perfect company or auto lender for this matter.

Given all the facts we share, are you considering taking out an auto loan at Wells Fargo?

We do hope that through this Wells Fargo auto loans review, we were able to provide you with all the information you need in order to come up with the right decision.

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SunTrust Bank Auto Loans Review: The Best Auto Lending Company For You

While there are a lot of auto loan options out there to help finance your dream car, in this SunTrust Bank auto loans review, we are going to provide you essential information to help you understand why it’s one of the auto lending companies you should take into consideration to get a loan from.

SunTrust Auto Loans Review

According to a Finder report, “Americans had $1.3 trillion in auto loan debt in 2019,” which is an increase of 81% since 2009, according to an Experian study published in March 2020.

Furthermore, in the same Finder’s report, it says that American people who get auto loans owed more on average compared to that of a decade ago. By end of 2019, American auto loan borrowers owed $19,231 on average — a 25% rise from 2009.

In addition, according to a study by the Federal Reserve, it was found that around 35% of American adults rely on car loans to pay for or buy their vehicles in 2019 alone.

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Based on the experts’ view, the number of auto loans shows no sign of slowing down. In fact, experts project that it will continue to rise in the year and the years to come.

This assumption is not surprising at all especially with the recent events in the country and in the world, more and more people will definitely aim to buy their own vehicle to get them around – providing them ease and safety transportation service.

Now, as the demand when it comes to auto loans increases, more and more lending companies are opening its doors to auto loan borrowers as well. One of them is SunTrust Bank through LightStream.

For those who do not know, LightStream is an online lending division of SunTrust that offers auto loans for both new and used sealer purchases, as well as refinancing, lease buyouts, private party purchase, classic cars, and unsecured loans for borrowers with a good or excellent credit score.

In this SunTrust Bank auto loans review, we are particularly going to answer some very important questions that borrowers usually ask. This includes the following:

  • Who is SunTrust?
  • What is SunTrust LightStream?
  • What auto loan products are offered by SunTrust LightStream?
  • What do borrowers need to know about SunTrust Bank auto loans?
  • Who qualifies for a SunTrust Bank auto loan?
  • How to apply for a SunTrust Bank auto loan?
  • What are the pros and cons of a SunTrust Bank auto loan?

WHO IS SUNTRUST?

Headquartered in Atlanta, Georgia, SunTrust Bank is an American bank holding company. It is the largest subsidiary of SunTrust Banks, Inc., having an asset of $199 billion as of March 31, 2018.

In 2019, SunTrust Bank merged with a fellow regional bank, which is the BB&T. Both of them created a new bank called Truist, which is currently positioned as the country’s sixth-largest bank, having a combined asset amounting to a total of $442 billion.

Although the two banks merged, both retained their own branding as well as products, which is why SunTrust still exists.

Now, SunTrust Bank offers a wide variety of banking products, as well as lending, credit cards, mortgages, and wealth management. Among the products offered by SunTrust Bank is an auto loan, which is offered through LightStream.

The bank also offers unusual perks to its customers in 10 southeastern states and the District of Columbia. As of the last quarter of 2016, SunTrust Bank had 1,400 bank branches and 2,160 ATMs in the U.S.

WHAT IS SUNTRUST LIGHTSTREAM?

As mentioned earlier, SunTrust Bank offers a wide variety of products and services, which include auto loans through LightStream.

LightStream is the online division of the bank, which makes providing loan services to customers easier for SunTrust Bank.

LightStream offers a full spectrum of auto loans to borrowers with very attractive credit and equally healthy finances.

The online lending division of SunTrust bank offers a variety of auto loan products for private party purchases, new and used dealer purchases, lease buyouts, refinancing, as well as classic cars and unsecured loans.

The SunTrust LightStream auto loan is specifically ideal for borrowers with good or excellent credit with a “background of solid financial management,” those who want to get an immediate response to their auto loan application (as LightStream gives a decision as soon as a few hours after filing of an auto loan application), and those who want maximum flexibility (because LightStream does not have any restrictions on car make, model as well as mileage).

Meanwhile, if you want to know more about LightStream auto loans, check the video below by Honest Finance. He shares a very insightful review, and we thought you got to check this out:

WHAT AUTO LOAN PRODUCTS ARE OFFERED BY SUNTRUST LIGHTSTREAM?

Again, as mentioned, LightStream is SunTrust online division, which caters to auto loans.

One thing that LightStream is popular is that it offers a variety of auto loans to its customers.

Customers may choose on the following auto loan options:

  • New Dealer Purchase
  • Used Dealer Purchase
  • Private Party Purchase
  • Refinance
  • Lease Buyout
  • Unsecured Auto Loans

We just want to point out that LightStream’s classic car option does not have any restrictions on make, model, age, or mileage.

Furthermore, unsecured auto loans basically mean your car will not be used collateral in case of default payments.

In addition, you can use SunTrust LightStream auto loans to refinance, as well as buy out a lease, and even to finance an RV or a motorcycle purchase.

By its list of products offered alone, as compared to other auto lending companies, SunTrust definitely has an edge. It’s safe to say that their line-up of auto loan products is well-thought-out. They ensured everything is covered, and that they have a product that fits every kind of auto loan borrower – leaving no room to look elsewhere.

WHAT DO BORROWERS NEED TO KNOW ABOUT SUNTRUST BANK AUTO LOANS?

As we always say, when eyeing for a loan – whether it be an auto loan or not – it is important to shop and compare. Look around and see what auto lenders offer. Compare their loan offers before making a decision, before sealing the deal.

By doing so, you get to choose the best deal possible – leaving no room for regrets. Well, as borrowers, the last thing you want is to realize you actually cannot afford to pay off the loan, which means, you might end up broke or in a bad light.

With that said, as part of our SunTrust Bank auto loans review, we are going to share with you some of the most vital information regarding what they offer.

In particular, we are going to share with you information on the following aspects:

  • Loan Amount
  • Interest Rate
  • Loan Terms
  • Refinancing Options
  • Fees and Penalties
  • Collateral

Now, let’s discuss the items one by one to give you clarity and a better understanding of what to expect with SunTrust Bank auto loans —

Loan Amount

When borrowing money from a bank or any lending company or financial institution for that matter, make sure you have already determined the amount of money you need to purchase the vehicle. That way, you get to save time and energy – focusing only on banks or lending companies that offer loan amounts based on how much you need.

SunTrust Bank, through LightStream, offers loan amounts from as low as $5,000 up to $100,000.

Compared to other lending companies and financial institutions offering auto loans, SunTrust’s LighStream definitely has one of the highest loan amounts.

So, if you are looking at borrowing money within this range, SunTrust’s LightStream is definitely a good fit for you.

Interest Rate

Another very important thing that every borrower needs to consider when getting an auto loan is the interest rate or the annual percentage rate charged by the lending company or the bank. This will help you gauge if you are able to pay off the loan or not. Needless to say, this helps you determine if the loan is worth it or not.

Take note that every financial institution has its own rate – thus, the importance of shopping/looking around and comparing before anything else.

For your reference, here’s how much SunTrust’s LightStream charges for auto loans depending based on loan category:

  • New dealer purchase – 3.49% to 8.34%
  • Used dealer purchase – 3.49% to 8.34%
  • Private party purchase – 4.99% to 9.19%
  • Refinance – 3.49% to 8.34%
  • Lease buyout – 4.99% to 9.19% (with autopay discount)

The interest rate varies depending on certain factors like your credit score or creditworthiness, your location, loan amount, loan terms, etc. So, if you want a concrete detail, it is best to check with SunTrust’s LightStream as soon as you can.

As we have mentioned, SunTrust Bank offers unusual perks. One of them is that if you have been offered a lower rate by another lender, what SunTrust does is that it will offer .10% points less than the rate that you have been approved for. Of course, the evidence must be submitted.

In addition to SunTrust Bank auto loan perks, if a borrower sets up auto pay, he or she gets an additional 0.50% off from LightStream.

Loan Terms

Another important thing to factor in when deciding where to borrow money from is the loan terms or the length of time you are going to repay the loan.

Every lender has its own loan terms. As for SunTrust’s LightStream auto loans, the loan terms are flexible. The minimum length of borrowing is 24 months, while it can also be as long as 84 months.

However, like in any other type of loan, the lengthier the loan term is, the bigger the interest becomes. Meanwhile, if you opt to repay the loan as soon as possible, you definitely can enjoy a lower interest charge.

Refinancing Options

As mentioned earlier, SunTrust Bank through its online division, LightStream, offers a variety of auto loan options, which include refinancing.

Yes, you can borrow money from LightStream intended to help pay off any existing auto loan.

Fees and Penalties

Some lenders may offer lower rates, but they charge a lot of fees and penalties, which can be burdensome for borrowers. Imagine paying off an interest plus fees and penalties.

Anyway, as a borrower, you also need to take into consideration the fees and penalties charged by the lender before making any concrete decision.

At the end of the day, you want to save as much money as possible, right? An auto loan is useless if you are paying way more than what you are supposed to pay.

What we particularly like about SunTrust Bank auto loans is that they do not charge an origination fee, late payment fee, as well as prepayment penalties. On the latter, it means you can repay the loan in full anytime you want before the scheduled end of the term without having to worry about prepayment penalties.

Collateral

Unfortunately, the auto loan offered by SunTrust Bank’s LightStream is only applicable to borrowers with good or excellent credit. Those with unattractive or poor credit score may consider looking for other auto loan providers.

Now, SunTrust Bank auto loans can either be secured or unsecured. Secured auto loans mean your vehicle automatically becomes the collateral of the loan, which means, in case of default payment, the bank has all the right to get the vehicle from you.

Meanwhile, with SunTrust’s unsecured loans, the company requires borrowers to have an excellent credit score. According to the bank, borrowers must have the following to get approval for the unsecured auto loan:

  • Minimum of five year’s substantial credit experience in different credit account types
  • Excellent payment records, with no delinquencies or record of bankruptcies
  • Proven ability to save money

WHO QUALIFIES FOR A SUNTRUST BANK AUTO LOAN?

Borrowers, it is important to know that every lending company or financial institution have their own set of requirements or qualifications.

These requirements or qualifications are set to make the approval of auto loan applications easier.

Ideally, before anything else, borrowers must first and foremost check the requirements set by the lender to help save time and effort.

As for SunTrust Bank auto loans, please take note of the following requirements or qualifications:

  • Must have a good or excellent credit score (at least 660 to qualify for lowest rates and most lenient terms)
  • No delinquencies or record of bankruptcies
  • Must have a proven ability to save money
  • Must have sufficient income to cover debts
  • Must have at least five years of credit history
  • Must own a variety of account types

In addition, you must of course be of legal age and a U.S. citizen or a permanent residence cardholder to be able to obtain a SunTrust auto loan via LightStream.

HOW TO APPLY FOR A SUNTRUST BANK AUTO LOAN?

At this point in our SunTrust Bank auto loans review, we are going to talk about how to actually apply for an auto loan at SunTrust Bank.

Following below step-by-step guide will definitely help make the auto loan application easier.

First, go to the SunTrust Bank website, and choose the type of loan you want to apply for — in this case, it’s auto loan — and then, click “Apply Now.” You will then be directed to the LightStream loan application portal.

Second, fill in all the details required to process your auto loan application. At this point, you have to indicate whether it’s an individual or a joint application. You will also be asked to input your desired loan amount and the loan term that you prefer. Once done, click, the “Next” button.

Third, fill in your personal information, which includes your contact details, place of residence or address, citizenship, work status, as well as your annual income, monthly housing costs, and your assets. When done, click the “Next” button.

Fourth, create a user ID and input your preferred password to be able to access your account. Then, choose a security question and answer. This enables you to access your account in the future.

Lastly, confirm your application details, and then submit them.

Please note that SunTrust Bank may provide funding for you as soon as the same day of your application provided you review and sign loan documents by 2:30 p.m. Eastern time, provide your bank details, and have completed the verification procedures.

By the way, SunTrust provides a satisfaction guarantee. In case, however, you are not happy with your loan experience with the company, the lender will give you $100 in return.

WHAT ARE THE PROS AND CONS OF A SUNTRUST BANK AUTO LOAN?

This review will not be complete if are not going to share with you what we like and what we do not like about SunTrust Bank auto loans.

Without anything else to say, here’s our list of pros and cons of SunTrust Bank auto loans:

PROS

  • It provides a variety of auto loan options, which include dealer or private party purchases, refinancing, classic car loans, and lease buyouts.
  • Fast auto loan processing, which allows borrowers to receive funding in as soon as the same day of the loan application.
  • Offers some of the best auto loan rates in the market today — definitely cheaper as compared to its competitors.
  • Beats competing for APR offers by offering a 0.10% points off (with conditions).
  • Does not charge an origination fee, late payment fee, as well as prepayment penalties.

CONS

  • It only caters to borrowers with strong credit.
  • It does not offer a phone or email application process, which could be an issue for non-tech savvy borrowers.
  • It has very strict requirements for auto loan approval.

FINAL THOUGHTS ON SUNTRUST BANK AUTO LOANS REVIEW

To sum it all up, SunTrust Bank auto loans through LightStream offers great deals. It comes with perks such as a rate match guarantee, as well as a customer satisfaction guarantee. Needless to say, the bank offers one of the lowest rates in the industry today.

Unfortunately though, qualifying for a SunTrust auto loan can be quite daunting. It has very stringent requirements. Unless you have very good credit, and you meet all the qualifications set, then, there should be no problem at all.

So, do we recommend SunTrust auto loans?

With everything we have shared in this SunTrust Bank auto loans review, we definitely say, yes, we do recommend it especially to borrowers with excellent credit records. They definitely will benefit a lot from it.

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What Are Collateral Loans And What Makes Them Ideal For You

There are two types of loans — one that requires collateral, and the other that does not require any “security”. Today, we are going to put some light on what collateral loans are. We will provide all the essential information to help you understand what this type of loan is all about, and why you should consider getting one.

What Are Collateral Loans

In an investigative paper entitled, “Secured Lending and Borrowers’ Riskiness” by Alberto Franco Pozzolo, it says that “a large number of bank loans are backed by real or personal guarantees.” Furthermore, it states that according to a report by Berger and Udell (1990), nearly 70 percent of all commercial and industrial loans in the United States are made on a secured basis.

Meanwhile, in a report published online by Statista, it says that from March 2014 to June 2020, the loans granted by various commercial banks in the United States amounted to an estimated 14.85 trillion U.S. dollars. Definitely high as compared to previous years. We thought the numbers might even spike in the coming months given the current situation in the country and all over the world.

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Getting loans is inevitable especially during crucial times when our financial capabilities are testes – times such as now.

Now, if you are new to borrowing money from financial institutions or lending company, know that as mentioned, there are two types of loans – secured and unsecured loans.

Secured loans are collateral loans, which means, you can only apply for the loan if you have collateral that serves as the company’s “security” should you fail to meet your obligations. Meanwhile. Unsecured loans allow you to borrow money without the need for collateral.

It is important to understand both. However, today, we are going to focus on understanding what are collateral loans.

For your reference, here are the different points that we are going to tackle:

  • What is collateral?
  • How does collateral work?
  • What are the different types of collateral?
  • What is a collateral loan?
  • What are the different types of collateral loans?
  • How to apply for a collateral loan?
  • What are the pros and cons of collateral loans?

WHAT IS COLLATERAL?

Before we even talk about what collateral loan is all about, let us first define what collateral is.

The term collateral, according to Investopedia, refers to an asset that a borrower provides, while the lender accepts to serve as “security” for a loan.

Collateral comes in different forms depending on the type of loan, and also, depending on what the lender requires. It could be in the form of a real estate, vehicle, or other kinds of assets based on the purpose of the loan.

The collateral serves as a form of protection for the lending company in case the borrower defaults on their loan payments. Should that happen, the lender can seize the collateral in lieu of the missed loan payments. The lender will then have to decide whether to sell the asset or keep it.

HOW DOES COLLATERAL WORK?

When borrowing through a secured loan, normally, the borrower will have to go through a certain process wherein the lender will check if you have the ability to repay the money you are loaning for. And one of the factors that they consider, rather, the most important factor that lenders will look into is if you have collateral that will serve as security for the loan.

Generally, collateral helps minimize the risk for lenders. It gives them a sense of assurance that no matter what happens — especially if the borrower defaults — the lender has a sort of “security blanket” in the form of the borrower’s asset.

As mentioned earlier, in case the borrower does default, the lender will automatically have the power over the collateral. The lender could sell it and apply the money it gets to the unpaid portion of the loan. If for instance, the collateral is not enough to cover the remaining balance, the lender has the option to pursue legal action.

Collaterals come in different forms — it could be in the form of real estate, a car, etc. Usually, it relates to the nature of the loan, which we are going to talk about in detail later on.

Generally, secured loans or collateral loans are available in lower interest rates as compared to unsecured loans.

In addition, just so you know, a lender’s claim to a borrower’s asset, which was made collateral is called a lien. It basically refers to the lender’s legal right or claims against an asset to help satisfy a debt, according to Investopedia.

WHAT ARE THE DIFFERENT TYPES OF COLLATERAL?

Now, before we answer the question, “What are collateral loans?” Allow us to provide you first with the different types of collateral available and/or accepted by lenders when aiming to get a secured or collateral loan.

If you are a borrower, it is important that you know the different types of collateral so you get to determine if you can afford a secured loan or not.

As mentioned, any asset can serve as collateral — but that depends on the requirements of the lender. Thus, it is important that you ask your preferred lending company first what they do and do not accept as collateral before you apply for a secured loan.

Generally speaking though, lending companies or financial institutions prefer assets that are easy to value and turn into cash.

One perfect example is money in a savings account. It usually is great for collateral. Why? It is because lenders know how much their value is, and it’s very easy to collect.

Apart from that, here are some other forms of collateral:

  • Automobiles
  • Real estate (including equity of your home)
  • Investments
  • Insurance policies
  • Cash accounts (except retirement accounts – although there may be exemptions)
  • Machinery and equipment
  • Valuables and collectibles
  • Future payments from customers (receivables)

Please note that even if you are planning to get a business loan, personal assets may also be considered or part of a personal guarantee. Meanwhile, retirement accounts like IRAs are usually not allowed to serve as collateral.

In addition, we thought you might as well know that when it comes to valuing your assets, generally, lenders offer less than the value of the pledged asset. Some assets may even be heavily discounted. The purpose of doing this is that lenders will have more chances of getting all their money back just in case the investment loses value along the way.

As a borrower, it is important to keep in mind that in case your pledged assets lose value for whatever reason, there would be a greater chance that you might have to pledge additional assets to ensure a collateral loan in place.

Ideally, you must pay whatever you owe and keep your asset with you. That should always be the aim of any borrower of a secured loan. Otherwise, it’s much of a hassle really.

WHAT IS A COLLATERAL LOAN?

We always say this — loans are inevitable. All the more these days when times are really tough. Loans allow us to get through certain points in our lives — like emergency situations and money is scarce.

Good thing though lending companies and/or financial institutions do exist. While there is an easier way of getting a loan through unsecured loans, the downside is that it costs a lot.

But there is one more option available though that comes with better rates — secured loans or also known as collateral loans.

Based on the definition of what collateral is, a collateral loan refers to a type of loan wherein the lender requires an asset to serve as collateral. The collateral serves as the lender’s assurance that should the borrower do not meet his or her loan payment obligations, the lender can seize the collateral and sell it to recover some or all of its losses.

As compared to unsecured loans, secured loans or collateral loans do have lower interest rates. Needless to say, the requirements are less strict because collateral exists. Thus, this makes it ideal for people who have assets and are not afraid to lose their assets in case of default.

Before we move on, if you are seriously considering getting a collateral loan anytime soon, we suggest you check the video below by eHowFinance wherein they share about tips on collateral loans.

WHAT ARE THE DIFFERENT TYPES OF COLLATERAL LOANS?

Now that you already know what a collateral loan is all about, this time, we are going to talk about what are collateral loans – its types and a definition of each, of course.

While there are different types of collateral loans, below are some of the most popular examples of collateral loans:

  • Personal Loans
  • Auto Loans
  • Mortgages
  • Small Business Loans
  • Margin Trading

Personal Loans

While most personal loans are unsecured loans, there are also a couple of secured ones.

Generally, consumers use personal loans to consolidate existing debt, build credit, or finance everyday expenses.

As mentioned, personal loans come in two different types — secured and unsecured.

Just like any secured loan, personal loans are backed by collateral. By having collateral, it helps reduce the lender’s exposure to the risk of default.

More so, with secured personal loans, lenders are able to charge a lower interest rate as compared to unsecured personal loans.

Apart from a physical property like houses or vehicles, lenders also accept monetary assets such as savings, future paychecks, or investments as collateral for personal loans.

Auto Loans

Auto loans are one of the most common types of secured loans used by a lot of consumers.

For this particular collateral loan type, the asset being purchased, or the car that is being purchased is used as collateral for the loan.

It is usual to a lot of lenders mandating that assets be appraised to know the proper value of the collateral. This process helps lenders determine whether it is worth the approval of the loan or not.

Mortgages

Just like auto loans, mortgages are also another very common collateral loan type. Similar car loans, it also uses the asset being purchased as collateral for the loan.

When it comes to appraisal, as compared to auto loans, lenders are more strict in mandating that the property be appraised to determine the current value of the collateral.

The appraisal process is particularly important for mortgage applicants because lenders only approve home loans if the appraised value matches or exceeds the sale price.

Small Business Loans

If you have a growing business, and you need funds to help finance its needs, one of the most popular ways business owners do is to apply for a small business loan. Small business loans can be used for different reasons like financing office space, hiring new people, as well as in purchasing new equipment.

Normally, acceptable collateral for this type of loan includes future payments by customers, inventory, as well as real estate. Personal assets of the business owner/s may also be used to secure approval for this type of loan.

In some cases, there are lenders that require a “personal guarantee” from small business owners. This refers to a written promise or assurance that the borrower’s personal assets can be seized if the company fails to meet its financial obligations to the lender.

Margin Trading

Although this one’s not as highly popular as the previous ones, collateralized loans are also considered a factor in margin trading.

What happens is that an investor would borrow funds from a broker to buy shares. The investor will then use the balance in his or her brokerage account as collateral to the loan.

The loan helps increase the number of shares the investor can buy, which multiplies the potential gains in case of an increase in value.

The downside of this type of loan though is that the risks are also multiplied. This means, should the shares decrease in value, it is likely that the broker will demand payment of whatever the difference is, which means the account serves as collateral if the borrower is unable to cover whatever is lost.

HOW TO APPLY FOR A COLLATERAL LOAN?

Now that you already know some of the primary details on collateral loans, this time, we are going to look into the application process.

Generally speaking, the application process for collateral loans vary depending on factors like the type of collateral used, as well as the amount of the loan. Of course, where you apply for a collateral loan will also be factored in as some lenders have a very extensive application process, while others are not.

Just like any other loan application though, borrowers must gather some important documents that lenders need to proceed with the application. This includes documentation such as Social Security number, proof of income, as well as driver’s license and state ID.

Since this is a collateral loan, obviously, borrowers must also be able to provide documentation on the collateral itself like the title or deed for an auto or home loan. If in case the loan is secured by other personal property like bank accounts, insurance policy, or valuables, lenders may require borrowers to provide registration paperwork, photos, or other proof of ownership.

Once all necessary documents are ready, the lender or the financing company will then prepare the loan paperwork. They will also gather signatures from the borrower, and will also do a verification process to ensure the borrower’s eligibility for the loan. The verification includes credit scores, income, identity, as well as the ownership of the collateral.

When all the documentation is already gathered, all paperwork will then be sent through underwriting. Underwriting refers to a process that financing companies use to check on the risk associated with the loan. After this, the lender will make a decision about whether the application gets approved or not. Depending on the company,

Depending on the company, the underwriting process can take either a few minutes or several weeks, especially for mortgage loan applications.

As soon as the loan is approved though, financing companies issue check for the loan amount to the borrower.

WHAT ARE THE PROS AND CONS OF COLLATERAL LOANS?

There’s no such thing as perfect, right? The same philosophy goes to collateral loans, while it does have benefits, it also has its share of downfalls.

Having said that, here are some of the pros and cons we found with collateral loans:

PROS

  • It offers lower interest rates as compared to unsecured loans. The existence of collateral makes it possible for lenders to provide lower interest rates to borrowers of the loan. Lending companies are assured that even if the borrower does default, they will recover if not all, at least a portion of the loan through the collateral.
  • It can help build a borrower’s credit. Lenders report the payments you make to major credit bureaus. Thus, by making payments on time, a collateral loan can definitely help you build your credit score.
  • It provides loan opportunities for people with imperfect credit history. Because of the collateral, lenders are more willing to take a risk on borrowers with imperfect credit history. They are assured that no matter what happens, there’s collateral that will serve as the lender’s fallback.
  • It provides increased loan amounts. If a borrower does have extensive savings or a certificate of deposit, it would be easier for him or her to borrow larger amounts if need be.

CONS

  • The application process may take a while. Unlike unsecured loans, collateral loans require a lot of documentation. Needless to say, there’s a verification process as well. Thus, the whole application process may take a while.
  • Collateral can be repossessed by the lender due to default. Failure to pay the loan means the borrower will lose the asset, which was made as collateral to the loan. Once it is repossessed by the lender, the borrower automatically loses his or her ownership of the collateral.

FINAL THOUGHTS ON WHAT ARE COLLATERAL LOANS

To sum it all up, collateral loans are ideal for people who own assets that could serve as collateral to the loan. While it does have its risks, the fact that the interest is lower as compared to unsecured loans should make it a valuable choice among borrowers.

Have you thought of getting a collateral loan anytime soon? How do you find it so far?

We hope that through this, we were able to provide you essential information/answers to the question, “What are collateral loans?”

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Investment Apps and Websites

5 Of The Best Online Car Buying Sites In The Country

One of the best ways to do when shopping for a car or any vehicle for that matter is to check the best online car buying sites out there. There is actually a lot to choose from, which means more options to compare to be able to get the best deal possible.

the best online car buying sites in town

Perhaps it’s not surprising that a lot of people in the country own a car or two. Owning or having a car is considered a necessity for most people. It’s something that you got to save for because it makes life easier. Going places is made easier when you own one.

In an article published by CNN in 2017, it says that in 2016, car sales in the country set a record of 17.6 million cars and trucks included.

Meanwhile, in data published by Hedges and Company, it says that there were 284.5 million registered vehicles in the United States as of 2019 and that it is expected to rise even more this 2020.

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You see, these numbers are real. This only goes to show that indeed, having a car is not merely want, but a need – at least for most of us.

So, here you are planning to buy yourself a new car. What about now?

Well, if you are not new to this, you probably know by now what to do – unless you want to refresh your thoughts about it. However, if it’s your first time buying a car, it’s a totally different story.

But don’t worry, there are so many references on and offline where you can get idea from –

In fact, you no longer have to go elsewhere because today, we are going to share with you some important details that you need to know prior to buying a car, and of course, we are going to share with you some of the best online buying sites.

Yes, there is such a thing as online buying sites! Later on, we’re going to share with you what these sites are. But first, we are going to tackle some very essential information that every car buyer needs to know.

TIPS WHEN BUYING A CAR

As mentioned, before we move on to our list of some of the best car buying sites out there, here are some of the important things that you need to know first before you even make a car purchase.

TIP 1: Make sure to have a budget.

When buying a car, it is important to set a budget, and of course, stick to it. Avoid buying a car just because you like it even if you cannot afford it. While car loans are everywhere, and they surely help a lot, at the end of the day, you do not want to drown in debt, right? Or that you end up working just to be able to pay for the car that you bought.

You can use different tools to be able to determine how much you can afford. You can either go traditional by simply computing how much space you have in a month to spare for car payments, or you may use an auto loan calculator, which you can find online in different auto loan sites.

TIP 2: Ensure you have a good credit score.

Having a good credit score is a big help especially if you are planning to apply for an auto loan. Financial institutions like banks and credit unions usually check a borrower’s credit score to be able to determine whether or not the person deserves approval of the loan.

Now, if you do not have good credit, don’t worry you may opt to either buy a car through an auto dealership or peer-to-peer credit, or you may choose to look for a co-signer with great credit standing.

TIP 3: Know your auto financing options.

If you can buy a car in cold cash, then, that’s the best option. However, if you cannot afford to do that, there are three common places where you can apply for a car or auto loan. These are banks, credit unions, and an auto dealership.

All these three have their respective pros and cons, you just got to check them, and see for yourself the best possible option based on your preference and what you can afford. Also, make it a habit to compare the APRs and other factors before setting a deal with a financial institution.

TIP 4: Compare car prices.

Before you even make a deal, make sure to compare prices. There are so many car dealers out there, and guess what? While some of them sell the same type of car, they differ when it comes to the price. That is why it is very important to compare prices first before purchasing a car.

Later on, we are going to share with you some of the best online car buying sites. You can check them out and check how one differs from another.

TIP 5: Finalize the deal.

Once you have decided already where to buy the car from, and you have already chosen the car loan provider to deal with, make sure to finalize the deal. Basically, the requirements vary from one dealer or car loan provider to another. You just got to check with your preferred entity.

So, there you have it.

Now, are you excited about our list of the best online car buying sites? Hang in there first as we want to share The List Show TV’s own list first. We find this very helpful especially for those who are new to the idea of buying a car online. Check the video below by clicking the play button:

BEST ONLINE CAR BUYING SITES

With the advent of technology and the internet, it is not surprising that even buying and selling a car is now available online. Technology has indeed changed the way of buying and selling a car is. But let’s be honest here, it’s to our advantage, right? It’s more convenient and easy as compared to shopping cars from one shop to another, which can get exhausting and time-consuming.

Anyway, so, for your car shopping needs, here are some of the best online car buying sites that you should check out – in no particular order:

CARFAX

CARFAX Incorporated is an online commercial service that supplies vehicle history reports to both individuals and businesses regarding used cars as well as light trucks for consumers from the United States or Canada.

The company, which was founded in 1984 is headquartered in Centreville, Virginia.

Over the years, and given the fact that Carfax has been in the market for decades already, the company has become one of the trusted names in vehicle history reports.

However, what a lot of people do not know is that they actually do have an online used-car marketplace as well. The company is integrated with Facebook Marketplace. This brings more transparency as well as the confidence to buyers who are looking for a used car. Given the fact that Facebook Marketplace has already become popular, their partnership made Carfax well-known, particularly to car buyers.

Advantages:

Carfax offers a very simple website. But what makes it a standout is the fact that it provides a quality vehicle history report to future owners of the cars they sell. Every car listed on Carfax comes with a free Carfax Vehicle History Report. Having such will give any shopper peace of mind.

Carfax provides also provides the original price of the car through the Carfax History-Based Value feature. We actually like this because at least you’d know if the current price is worth it.

Another advantage of Carfax is that potential buyers like you have the option to sign-up for email as well as text alerts so in case there’s a similar used car for sale, you will get notified.

Disadvantages:

Unlike other car buying sites, the Carfax website is a bit old-school. Nonetheless, it gets the job done. Apart from car make, model, color, body type, price as well as ZIP code, and quality, the company does not provide any other filters that are original to them. So, if you have something particular that you are looking for in a vehicle, you might find it a hard time.

AUTOTRADER

Autotrader is also one of the best online car buying sites out there. Founded in 1997, this online marketplace aggregates new, used, as well as certified second-hand cars from dealers and private sellers.

The website allows you to research as well as compare cars by searching for the body type, price, mileage, and a lot more other criteria. Autotrader comes with Lifestyle Centers that allow its customers to locate vehicles that meet their needs and preferences and compare them side by side.

Over the years of its existence, the company has earned several awards and recognitions from different organizations. This includes a recognition from J.D. Power & Associates, Information Week, as well as Dealers’ Choice Diamond Awards.

Advantages:

We find the Autotrader’s website very modern and sleek. It comes with bells and whistles, which is already expected by industry leaders.

One feature that really stands out for us is the integration of its homepage with Kelly Blue Book as it allows users to get an offer on their old vehicle while using the site.

Browsing is not a problem with the Autotrader website. You can browse cars and other vehicle types by location, price, trim packages, and many other variables.

If you are particularly looking for a new vehicle, the Autotrader website provides ample research as well as helpful information that you may need.

Unlike other car buying sites, most of Autotrader’s sellers are dealers instead of private sellers. Thus, expect to talk to sellers with a high level of professionalism.

Disadvantages:

Sometimes, too much information can get overwhelming especially if you do not know how to narrow your filters, or you do not know exactly what you are looking for in a vehicle.

Another thing we noticed is that finding financing information is quite a challenge.

CARVANA

Carvana lets you pick up a car from an eerie but “futuristic vending machine”. Sounds interesting, right?

Well, that is exactly what a Carvana experience is all about.

Founded just recently, in 2012 to be exact, Carvana was reported to be the fastest-growing used car dealer in the country today.

The company, which is headquartered in Tempe, Arizona, has gained popularity because of its multi-story Car Vending Machine.

As of this writing, the Carvana website has over 23,000 cars in stock. Each of these cars comes with their own Carfax history report, which is very important for every buyer.

All cars being sold by Carvana are stored in reconditioning centers. All of the cars were inspected and certified. The centers, however, are not open to the public.

Search online from their thousands of car options, and once you have picked your car, Carvana will deliver it right at your doorstep, or you can pick it up yourself at a car vending machine.

By the way, one thing that draws people to Carvana is the fact that they offer a next-day delivery feature. Now that is customer service at its finest, don’t you think?

Advantages:

All paperwork can be filled out on the site. Carvana also offers free delivery to most major cities — that saves you money.

Carvana does not require a minimum credit score when applying for financing. More so, they only do a soft credit inquiry. You can obtain financing online, too, which makes it really convenient for customers.

Now, for those who want to experience the Car Vending Machine, Carvana usually subsidizes your flight.

Disadvantages:

While they do not have a minimum credit score requirement, Carvana requires a minimum income of $10,000 a year to be able to apply for car financing. So, if you are a part-time employee or a student, this may not work for you.

Also, the fact that it’s an online marketplace for cars means you cannot check the vehicles in person. However, Carvana offers a seven-day return policy just in case you find something odd about the vehicle you purchased.

VROOM

Vroom is an online car buying site known for selling cars that are preowned, have low mileage, under three years old, which are the same as pre-owned vehicles. The cars that the company sells online come from dealers, private sellers, as well as auctions.

To ensure safety and the readiness of the car for sale, all units go through several inspection levels.

Basically, all transactions with Vroom are made online. When you buy from the company, rest assure that Vroom handles all paperwork, and deliver it anywhere in the lower 48.

One thing to like about Vroom is that they give a quote for trade-in. Also, they pick up your car once they deliver the one that you purchased.

Once you have the car, you are given a week or 250 miles to test drive the vehicle.

As of this writing, Vroom offers approximately 5,000 vehicles on their site. Also, the company does not offer to haggle pricing. As with financing, they do offer car financing through over 12 banks.

While Vroom may not be the largest online marketplace for cars, it sure does have lots of high-end, clean vehicles to choose from

Advantages:

As mentioned, once you buy a car from Vroom, you are given seven days to test drive.

Each vehicle comes with a 90-day, 6,000-mile limited warranty. Rest assured that all cars from Vroom have clean titles that have undergone inspections and that each comes to their respective Carfax report.

What we like about Vroom also is that most of the vehicles they sell have low-mileage and that a lot are still under the original manufacturer’s warranty.

Disadvantages:

Vroom is ideal for people with good credit — although technically, the company does not have a minimum credit score requirement. So, yeah, even with a not-so-good credit score, you can still shop around their site.

Unlike other online car buying sites, Vroom charges a delivery fee amounting to $499. However, you have the option to pick up the car in Houston to get away with the fee.

CARMAX

Headquartered in Richmond, Virginia, CarMax is known to be the country’s largest used-car retailer. It is also a Fortune 500 company.

CarMax takes pride in the kind of service they offer to their customers. They ensure that all the cars they sell have gone through extensive inspections before they even show up on their site.

We consider CarMax as one of the best online car buying sites in the country because of several factors. Apart from the extensive inspections of car units, the company also offers a number of purchase protections such as a seven-day return window should the buyer find anything not good about the unit, limited warranty on all cars, and they also offer an option to buy a comprehensive service plan.

Advantages:

There are a few things we like about CarMax — like they free vehicle history reports, they deliver the car for a test drive (although this includes certain fees), they provide a seven-day return window, 90-day or 4,000-mile limited warranty.

CarMax also allows you to apply for car financing through their site. They also have stores across the country in case you want an in-person experience.

Disadvantages:

The company does not welcome price negotiations. They also do not provide price guidance to know if the price is a good deal or not.

If you want to see a car or test drive a car, fees apply.

FINAL THOUGHTS ON THE BEST CAR BUYING SITES

As you can see, we only provided five of the best online car buying sites. There are actually a lot more to choose from. Each comes with their respective offerings.

What’s nice about using car-buying sites is that it is not time-consuming. It’s very accessible – like you can check what they offer anytime and anywhere you want.

So, if you are someone looking for a car – new or pre-owned – but does not have the time to shop from one store to another, car buying websites are the best for you.

Just remember though to make sure you are searching for cars from legit, and only from the best online car buying sites.

Categories
Investment Apps and Websites

7 Best Auto Loan Rates In The Country Today

When buying a new car, van, or truck whether, for personal or business purposes, it is always ideal to find the best auto loan rates in town. There are actually a lot of choices out there, but of the so many options, we found some of them, and we’ll be sharing it with you today.

best auto loan rates your guide

Let’s admit it, the idea of buying something new especially when it comes to cars can really bring so much excitement in us. So much that we would find ourselves spending time scanning through different options — brands, model, color, features, etc. We compare one model to another, go test drives, and imagine yourself driving the car.

It’s really an amazing feeling.

However, here comes the reality — the cost. It’s probably safe to say that for some of us, the cost of a car or van or truck could be less exciting.

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But just before you feel bad and all, here’s the thing — auto loans do exist, and there are a lot of companies offering them. What you should do is, as you compare car models, you should also make time to compare the best auto loan rates. Do not commit to some people’s mistake of just signing up on whatever loan companies that come first. As a borrower, it is your responsibility to ensure that you deal only with the best rates. After all, this will be beneficial to you unless you want to drown in debt, right?

Loaning money to buy a car is not a bad thing at all. In fact, there are a lot of people who are in auto loans.

In an article published by Forbes, it says that in 2017 alone, “the average amount borrowed for a new car was $31,099, averaging a $515 monthly payment while $21,375 was taken out for a used car, working out at $398 a month.”

Furthermore, as stated in the same article, “a Finder analysis of the Federal Reserve Bank of New York data, Americans accumulated $568.6 billion in auto loans by the end of 2017.”

You see, auto loans are very in-demand.

As we have said, borrowing money is not bad, not paying the loan makes it grueling because you will really suffer from consequences. So, the key is – make sure that you only transact with a loan company that offers the best auto loan rates according to your preference, to what you can.

Anyway, as we have mentioned, we are going to share with you a few of the many lending companies that offer the best auto loan rates in the country.

Before we move on to our list, here’s a very insightful video created by Honest Finance. This gives you an idea of how to get a car loan today. Hit the play button below to watch the whole thing:

AT A GLANCE: BEST AUTO LOAN RATES COMPANIES

FINANCIAL INSTITUTION ANNUAL PERCENTAGE RATE (APR) LOANABLE AMOUNT REQUIREMENTS
Oportun 20.00 – 67.00% (estimate) $5,000 up to $35,000 500 credit score requirement, plus at least $2,000 monthly income
Consumers Credit Union 2.69% – 21.99% (with automatic payment discount) $250 up to $500,000 640 credit score, $6,000 annual gross income, $5 membership fee, and  $5 a month minimum savings account balance
OpenRoad Lending 2.9% – 24.9% $10,000 up to $100,000 500 credit score, at least $1,500 monthly income
Capital One Purchase: 3.59% for those with excellent credit Refinance: 4.07% – 24.99% Purchase: $4,000 Refinance: $7,500 up to $50,000 Purchase: 500 credit score, at least $1,500 monthly income Refinance: 540 credit score, at least $1,500 monthly income
Lending Tree Starts at 3.09% varies depending on the type of auto loan no minimum credit score requirement
Lending Club 3.99% to 24.99% $5,000 up to $55,000 must be a U.S. citizen, permanent resident, or valid long-term visa who is 18 years of age or older with a verifiable bank account
Carvana 3.90% – 27.90% amount varies depending on your car choice no credit score requirement, at least $10,000 annual income

LIST OF BEST AUTO LOAN RATES COMPANIES

If you are ready to know what’s on our list, well, then, let’s begin —

1. OPORTUN

Oportun is ideal for those with not-so-good to bad credit standing. The company is an online lender that allows you to loan for a car that you bought from an auto dealer or a private party. Yes, they do cater to private party purchased cars, which is actually way cheaper than those from dealers.

WHO IS OPORTUN:

As mentioned, Oportun is an online lending company that is “passionate about providing inclusive, affordable, financial services that empower our customers to build a better future“.

The company, which was established in 2005, has worked really hard ever since to ensure they get to serve about 100 million people in the United States. These people are those who have been “shut out of the financial mainstream because they don’t have a credit score or have a limited credit history.”

Unlike other lenders, Oportun believes that “by lending money to hardworking, low-to-moderate-income individuals,” they get to “help our customers move forward in their lives, demonstrate their creditworthiness, and establish the credit history they need to access new opportunities.”

Just this year, Oportun prides itself on being listed in the top 10 most innovative finance companies by Fast Company. Apart from that, their other products, particularly personal loans were also names as best consumer lending products by FinTech Breakthrough in 2019, while in 2018, they were tagged as one of Time Magazine’s Genius Companies.

Oportun is certified by the U.S. Department of Treasury.

ANNUAL PERCENTAGE RATE:  20.00 – 67.00% (estimate)

LOANABLE AMOUNTS: Oportun approved auto loans amounting from $5,000 up to $35,000.

REQUIREMENTS: To be able to avail an auto loan from Oportun, you have to meet its 500 credit score requirement, plus at least $2,000 monthly income.

2. CONSUMERS CREDIT UNION

Consumers Credit Union is actually considered as the best auto lending company in all aspects, but particularly on providing lower interest rates compared to banks. People with an existing account at a credit union is a part-owner, thus, institutions like Consumers Credit Union or CCU can offer members amazing deals.

WHO IS CONSUMERS CREDIT UNION:

Consumers Credit Union has been around since 1930. Based in Lake County, in Illinois, the company has been guided by the same principles ever since — these are “long term stability, dedication to providing the finest financial services, committed investment in its members“.

The company is an open-to-the-public, not-for-profit institution. It focuses on no less but their customers. Consumers Credit Union aims to provide service that is customized and unique to each and every customer, backed by offerings that address the customer’s banking needs.

Apart from auto loans, Consumers Credit Union offers other products and services to its members. This includes checking, savings, debit and credit cards, consumer loans, money market accounts, as well as certificates of deposit, and a variety of mortgage products.

ANNUAL PERCENTAGE RATE:  2.69% – 21.99% (with automatic payment discount)

LOANABLE AMOUNT:  Consumers Credit Union provides auto loans amounting from $250 up to $500,000.

REQUIREMENTS:  With Consumers Credit Union, you have to have at least 640 credit score, $6,000 annual gross income. Also, it requires a $5 membership fee, and a $5 per month minimum savings account balance.

3. OPENROAD LENDING

OpenRoad Lending is another popular name when it comes to the best auto loan rates. What makes it a standout though is the fact that it allows eligible applicants to refinance existing loans. This way the applicant gets to save an average of $100 monthly on their vehicle payments.

OpenRoad Lending provides a very simple process that is done entirely online. It’s too easy that even the decision of your loan application can be received in less than an hour.

WHO IS OPENROAD LENDING:

OpenRoad Lending is an award-winning auto finance company that is located in the Dallas Fort Worth area. The company was established in 2009 and has since become well-known in the auto loan industry.

Since its inception, OpenRoad has already “helped hundreds of thousands of customers save over $100/month on average by refinancing their auto loan“.

Regardless of your credit record, OpenRoad creates a customized or personalized loan option for you. Rest-assured that the ones handling your loans are a team of auto refinancing experts. More so, these people are there to help you achieve your refinance goals.

Over time, OpenRoad Lending has earned different recognitions like being tagged by Inc. Magazine as the 37th fastest-growing private company in the U.S., as well as being Dallas/Fort Worth Best and Brightest Company. Furthermore, OpenRoad Lending has also been recognized by the Dallas Business Journal as the Best Place to Work.

With OpenRoad Lending, you are assured of the following:

  • Lower Rates and Amazing Savings
  • A+ Accredited by the BBB and a trusted member of the American Financial Services Association
  • Quick loan decisions, flexible financing options and cutting edge technology for a great experience
  • There’s no obligation to apply, no hidden costs and no application fees
  • The highest level of customer satisfaction and award-winning customer service

ANNUAL PERCENTAGE RATE:  2.9% – 24.9%

LOANABLE AMOUNT: OpenRoad Lending provides loans to as much as $10,000 up to $100,000.

REQUIREMENTS:  With at least 500 credit score, and at least $1,500 monthly income, you can already apply for an auto loan with OpenRoad Lending.

4. CAPITAL ONE

CapitalOne is ideal for borrowers who prefer a major financial institution with a household name.

The bank provides auto loans for customers who prefer an either new or used car. Through its Auto Navigator program, customers can apply for preapproval. Do not worry as this step will not affect your credit at all.

The pre-approval letter, however, is valid at over 12,000 dealers all over the country, which you can all find on the CapitalOne’s website. If you are ready, all you have to do is present the letter to the dealership, and start off the entire application process.

WHO IS CAPITAL ONE:

CapitalOne is one of the well-known financial institutions in the country. Its mission is “to help our customers succeed by bringing ingenuity, simplicity, and humanity to banking“.

Founded by Chairman and Chief Executive Officer Richard Fairbank, the company believes that “innovation is powered by perspective and that teamwork and respect for each other lead to superior results”.

Capital One is best known for providing a wide range of products, which include credit cards, auto loans, banking, and savings accounts.

The bank, which is headquartered in McLean, Virginia currently has 755 branches including 30 café style locations and 2,000 ATMs across the country.

ANNUAL PERCENTAGE RATE:  Purchase – As low as 3.59% for those with excellent credit; Refinance – 4.07% – 24.99%

LOANABLE AMOUNT:  CapitalOne lends for as low as $4,000 for purchase, while fore refinancing, they refinance loans starting from $7,500 up to $50,000.

REQUIREMENTS:  For purchase, CapitalOne requires at least 500 credit score, while 540 minimum credit score for refinancing. Meanwhile, for both purchasing and refinancing, the company requires at least $1,500 monthly income depending on credit.

5. LENDING TREE

The Lending tree is ideal for customers who are keen on their budget. Lending Tree lets you shop from a wide selection of lenders without having to worry about your credit being affected.

By simply providing details like your desired loan type, down payment, financial status, and the vehicle you want, Lending Tree will then match you with appropriate lenders.

WHO IS LENDING TREE:

Lending Tree is an online marketplace for different financial borrowing needs such as credit cards, personal loans, small business loans, auto loans, and many more.

Lending Tree serves as an avenue wherein borrowers can compare rates and more from various financial institutions.

The company was founded by Doug Lebda and has been around since 1997. Since its inception, Lending Tree has brought rates online, which in turn makes banks compete.

To date, the company prides itself on having served over 50 billion worth of loans, more than 30 billion worth of loans saved, and over 100 million customers served.

ANNUAL PERCENTAGE RATE:  Starts at 3.09%

LOANABLE AMOUNT:  Lending Tree’s loan amount varies depending on the type of auto loan (whether it be for a new or used car), and also the loan terms.

REQUIREMENTS: According to Lending Tree, while “there’s no minimum credit score qualifying for an auto loan, your credit score will be a factor in how much you can borrow and the terms you’ll be eligible for.”

6. LENDING CLUB

Lending Club is the best for shopping around refinancing loans, which include auto loans. This is ideal for borrowers who are looking for ways to lower down their monthly bills.

To be able to shop around, all you need to do is complete the initial application process and eventually receive instant offers. Just like the previous ones, this step won’t harm your credit score at all.

Once you have offers, you may not compare them from one another, and choose the one that fits best according to your needs and preferences.

Through Lending Clun, you can find a lender that would either provide you with a lower interest rate or increased length of your loan.

WHO IS LENDING CLUB:

Lending Club has been around since 2007. The company has since brought borrowers and investors together to help transform the “way people access to credit”. Since its inception, Lending Club has already helped millions of people particularly enabling them to take control of their debt, grow their small businesses, or invest in the future.

Furthermore, Lending Club is committed to four particular things. These are:

  • Reinvent credit and investing
  • Deliver world-class experiences
  • Do what’s right
  • Level the playing field

Throughout the company’s first decade in the industry, it has already earned notable recognitions such as one of Fast Company’s 50 Most Innovative Companies, one of 2914 Best Places to Work in the Bay Area, and CBNC Disruptor 50 Class of 2014.

Lending Club is headquartered in San Francisco, California.

ANNUAL PERCENTAGE RATE:  3.99% to 24.99%

LOANABLE AMOUNT:  Loanable amount with Lending Club is between $5,000 and $55,000.

REQUIREMENTS: To qualify, you must be a U.S. citizen, permanent resident, or valid long-term visa who is 18 years of age or older with a verifiable bank account.

7. CARVANA

The last, but definitely not the least on our list is Carvana. This one’s ideal for those who would rather skip both the dealership and the bank.

With Carvana, you can apply for an auto loan, choose the vehicle you desire, and have it delivered at your doorstep. Yes, you read it right, you can do all that right at the comfort of your home.

More so, you may also opt to trade your old car without having to leave home. Basically, what Carvana does is give you an offer, and they will pick it up from your home. Very convenient, right?

WHO IS CARVANA:

Based in Tempe, Arizona, Carvana has been reported to be the fastest-growing used car dealer in the United States in 2018.

This online used-car retailer and technology business has earned popularity for its multi-story Car Vending Machines.

Carvana provides direct financing for the cars the company sells. This allows shoppers to browse the company’s online inventory, choose what they like, and then complete transactions without having to leave their homes.

As of this writing, Carvana takes pride in its wide selection of over 10,000 cars. By the way, once you have chosen your preferred unit, you may also choose your preferred financing terms, and complete the rest of the application process online.

ANNUAL PERCENTAGE RATE:  3.90% – 27.90%

LOANABLE AMOUNT:  The amount varies depending on your car choice from the company’s wide selection of vehicles.

REQUIREMENTS: The company does not require any credit score. It, however, requires buyers/borrowers to at least have a $10,000 income annually.

FINAL THOUGHTS ON BEST AUTO LOAN RATES

As you can see, there are a lot of financial institutions that offer the best auto loan rates. In fact, too many to choose from it can get overwhelming. However, the key to picking the one for you will depend on your ability to pay, as well as your personal preference or terms.

Have you found the best auto loan rate for you yet?

As mentioned, while there are so many best auto loan rates to choose from, at the end of the day, the best among them all will depend on you, the customer. It will all depend on your needs and preferences.