How to find cheap car loans in your area

car loans

Whether you’re looking to purchase a brand-new car off the lot, searching for a reliable used vehicle, seeking a project car or a classic to add to your collection, finding the right car loan for the right price is an important part of the process.

Remember, however, that borrowed money comes at a cost known as an interest rate—most often, it’s referred to as your APY. Your annual percentage rate affects how much interest you’ll pay in addition to the cost of the vehicle, or anything else you obtain a loan on. This is why interest rate shopping is important, and buyers shouldn’t just take the first loan offer they find when searching for car loans.

Why Finance? Why Get A Loan?

But wait, isn’t debt bad? Shouldn’t you avoid taking out even small loans and paying interest on cars or anything else if you can avoid it? On the surface, yes, that’s how it seems. However, after taking a closer look you may begin to see the benefits of actually saving your capital and putting it elsewhere.

With cars especially, they’re a known depreciating asset to own. Because of this, buying one almost guarantees you’ll take a hit if you keep it for any period of time, especially if it’s new. This can be mitigated by seemingly “paying more” for the vehicle due to the interest accrued, but keeping the liquidity you would’ve otherwise spent on the car in an alternative investment that can generate a rate of return higher than the negative one you’d get by putting it into a car.

So, even if you can afford to purchase a vehicle outright, you don’t necessarily need to just to “avoid debt” and the stigma that may come along with that in some consumer’s perspectives.

If You’ve Decided To Get A Loan, Get A Good One From The Right Lender

When some hear the phrase ‘cheap car loans’ they may think of title loans and junk credit lenders whose general business model is to hope for a repo. This isn’t necessarily true, and a cheap loan is good for anyone borrowing, whether it be on a home, a car, or another product.

Finding a good loan isn’t just about being cheap, it’s about ensuring the quality of the lender as well. You’ll want to make sure that the lender has a reputable status in your local area, staying true to payment and loan servicing terms, keeping the proper records and dealing with your questions or concerns amicably and in a timely manner.

You’ll want to do a thorough search for the lender of your choice through means of word of mouth and gathering references from others you may know that have taken out car loans with them, but it’s also important to do some unbiased independent research of your own by taking the time to check online.

There are many viable business websites dedicated to providing feedback on local businesses and their services. Pick through these lists and read reviews. Not just top-rated reviews, but recent reviews and reviews that contain key words relevant to whatever your needs or concerns may be. This can include considering title loan information.

Lock In The Right Rate

Auto loan

rates can be very skewed. This is because different credit histories call for different interest rates, based on the risk the borrower presents to the lender loaning them their money. The worse the credit history, the less likely it is statistically that the loan will be paid back, thus costing the lender money.

For good credit reports, loans can range from roughly 4.5% to 6% depending on whether the car is new or used, your unique credit report, and other variables. A great credit score is considered roughly 750 or north of there, so from that point on, as the score goes down, the rates go up. What’s considered a good rate for someone with a 540 would likely be a terrible one for one with a score of 780. It’s entirely subjective to you.

However, car sales have been tough in recent months since the pandemic, and dealerships are in need of sales. Many dealers finance, and some offer more promotional rates and incentives as compared to an independent party, because they’re incentivized to get both the sale and your interest payments.


Interest rates have dropped recently, and dealerships need to sell cars. Everyone is looking to make money, so lenders also want to make loans. With rates falling and sellers motivated, if you apply the principles above to finding the right lender, then now is a great time to see about getting a great cheap car loan.