Best Providers of Pre-Approved Car Loans
During the car-buying process, the price of the vehicle is a crucial factor that will influence your decision. Instead of paying for a new — or new-to-you — car in full, many people opt for an auto loan that breaks down the payments into monthly fees. But when you rely on the dealership to find you a loan, how do you know you’re getting the best rate? If you’re in the market to buy a car, think about securing a pre-approved loan that will ensure you’re entering a loan agreement that fits your needs and your budget.
Top Pre-Approved Car Loan Providers
There are dozens of insurance companies that can provide a pre-approved loans, but finding the best one can be overwhelming. To simplify your search, we identified the top pre-approved car loan providers based on loan offers available, average cost, credit score requirements and typical savings.
Reviews of Auto Loan Providers
1. Capital One
Capital One is a well-known bank that offers a variety of financial services, from credit cards to commercial banking solutions. With an auto loan from Capital One, you can finance a new or used car, or refinance an existing car loan. One of Capital One’s signature features is the Auto Navigator® tool that lets car shoppers view pre-qualified offer terms, search for cars that fit their budget and estimate monthly payments. Many people choose Capital One’s auto loans because they don’t require a hard credit pull up front, meaning that customers can get a loan quote without it affecting their credit score. We should note that with a pre-approved car loan from Capital One, you must purchase a vehicle at one of its participating dealerships.
- Minimum credit score: 500
- Loan amount: $4,000–$40,000
- Average monthly savings: $50
Lightstream is a lending division of SunTrust Bank, which specializes in loans for almost anything. Lightstream is a great auto loan provider for people with a good credit score, and a history of healthy finances. Customers often choose to get an auto loan from Lightstream because it’s one of the few providers that does not place restrictions on car make, model or mileage. Applicants can use Lightstream’s online monthly payment calculator to determine how much they can expect to pay each month. If you’re thinking about getting a loan from Lightstream, be aware that the company does require a hard pull of your credit when submitting an application, which will slightly impact your credit score. Because of that, Lightstream isn’t the best option for people that want to shop around for multiple quotes.
- Minimum credit score: 660
- Loan amount: $5,000–$100,000
- Average monthly savings: $55
LendingClub’s auto refinancing loans make it easy for people to save money on their monthly payments. With a simple and easy online application process, applicants can instantly check their estimated rate and see what other offers they qualify for, without it hurting their credit score. Based on their credit history and vehicle information, applicants are provided two offers—a term-match offer and a term-extension offer of up to 12 months more than the remaining term. If you choose either of the offers, LendingClub does require a hard credit pull before the loan can be approved. Additionally, LendingClub only offers refinancing loans, and doesn’t provide loans for purchasing a new car.
- Minimum credit score: 510
- Loan amount: $5,000 – $55,000
- Average monthly savings: $80
OpenRoad is a great auto loan provider for people that are rebuilding their credit. Before getting a quote, OpenRoad only requires a soft credit pull to give you an estimated rate, which won’t lower your credit score. The company also provides other car loan options, like GAP insurance and extended service contracts. Applicants can use OpenRoad’s car loan financing calculator to determine how much they can expect to pay in monthly fees. Keep in mind that OpenRoad only provides loans to applicants 40 states. If you’re thinking about getting a loan from OpenRoad, make sure you’re eligible based on your location.
- Minimum credit score: 500
- Loan amount: $10,000 – $100,000
- Average monthly savings: $100
Clearlane is a lending branch of Ally, which provides auto loans for refinancing existing cars, and for purchasing leased vehicles. Clearlane is ideal for people with a good credit score, as applicants need to have a credit score of 600 or better to qualify. However, Clearlane only uses a soft credit pull before providing quotes, so your credit score won’t decrease. Clearlane is unique in that it leverages a network of lenders to give applicants multiple quotes with just one application, making it a great auto loan provider for people who want to shop around. If you do select a loan from one of Clearlane’s network partners, they require a hard credit pull to determine your financial history.
- Minimum credit score: 600
- Loan amount: $5,000 – $100,000
- Average monthly savings: $107
AutoPay provides refinancing and new car loans by tapping into its vast lender network. Similar to Clearlane, AutoPay matches applicants with the best loan option from its network of lenders, using a single application. Applicants receive quotes from providers based on their credit history, vehicle make and model, and desired monthly payments. AutoPay is a great car loan option for people that want to avoid a hard credit pull before seeing their options. Car loan applicants can see their quote options in just minutes with AutoPay’s online application process. If you’re thinking of refinancing a vehicle, use AutoPay’s online loan calculator to determine how much you can save on your monthly payments.
- Minimum credit score: 600
- Loan amount: $2,500 – $100,000
- Average monthly savings: $83
What is a Pre-Approved Car Loan?
If you’re considering a car loan, you have two options: getting a loan directly through a dealership, or using a lender to get a pre-approved loan. A pre-approved car loan is a loan you receive from a bank or credit union before you go car shopping. Some companies even provide a physical check or voucher with the amount that you can use when paying for your car at the dealership.
Getting a pre-approval ensures you’re getting the best rate possible. Most lenders have online calculators that give you an estimated rate based on the type of car you want, your credit score and how much you can afford in monthly payments. If you get a quote directly from a dealership, you can’t guarantee that you’re getting the best value.
When Should I Get a Pre-Approved Car Loan?
If you’re on a budget, a pre-approved car loan is a great option. Getting a loan before you start car shopping helps you determine what cars you can afford. If you have a low credit score, a pre-approved car loan means you’ll get a better deal than you would get from the dealership. It also helps you negotiate the price of your vehicle, and incentivizes the dealership to give you a better loan rate than your pre-approved one.