Banks and credit unions are traditional sources of car loans. You can apply for a car loan online, by phone, or in person at a branch. The interest rate you'll be offered will depend on your credit score, the amount of your down payment, and the term of the loan.
2. Online lenders
Online lenders offer car loans specifically for people with bad credit or no credit history. The interest rates on these loans are typically higher than those offered by banks and credit unions, but they may be your only option if you have poor credit.
3. Car dealerships
Car dealerships often offer financing for new cars. The interest rates on these loans are typically higher than those offered by banks and credit unions, but they may be able to offer you other incentives, such as cash back or a lower down payment.
4. Peer-to-peer lending
Peer-to-peer lending is a way to borrow money from individuals or institutional lenders. You can apply for a peer-to-peer loan online. The interest rates on these loans are typically lower than those offered by banks and credit unions, but they may be more difficult to qualify for.
5. Personal loans
You may be able to use a personal loan to finance a new car. Personal loans are typically offered by banks and credit unions, and the interest rates on these loans are typically higher than those offered for auto loans.
Which type of loan is right for you?
The best type of loan for you depends on your credit score, the amount of your down payment, and the term of the loan. If you have good credit and a large down payment, you're likely to get the best interest rate from a bank or credit union. If you have poor credit or no credit history, you may need to consider an online lender or a peer-to-peer loan. If you're not sure which type of loan is right for you, you can always talk to a financial advisor.
