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Auto Loan

Carvana Auto Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Carvana
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A new kid on the car lot, Carvana features light-up vehicle vending machines instead of acres of autos with balloons. And that’s what attracts customers who want to complete the entire car-buying process online. Carvana offers auto loans as well as autos to qualified customers. In order for you to decide if a Carvana auto loan is right for you, we did the research, so keep reading.

About Carvana

Carvana offers used cars and loans on those cars. You do not have to get a Carvana auto loan in order to buy one of its cars. Carvana accepts cash and works with most third-party lenders, so it’s OK if you want to get a loan from your credit union or bank for a Carvana car. But Carvana will only finance its own cars, not cars from competitors.

You can check out the six best auto loans for buying a used car if you’d like to compare Carvana with other possible lenders.

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Carvana financing: At a glance

Here is an overview of what Carvana auto loans are like.

  • Loan terms range from 36 to 72 months
  • Minimum loan amount is $7,600
  • Maximum loan amount is $85,700
  • Trade-ins are accepted

Though Carvana declined to share its APR range, a company spokeswoman said Carvana extends credit to customers with a broad range of credit profiles. “You can get a feel for various APR ranges for each individual vehicle by utilizing the Build My Deal tool on each vehicle’s description page,” Amy O’Hara, associate director of communications told MagnifyMoney. You could also use Carvana’s auto loan comparison calculator to get an idea of the APR you may receive.

Carvana loan rate example

We used the Build My Deal tool to compare APRs for a 2016 Toyota RAV4 LE Sport Utility 4D. The Carvana price is $18,700, which is slightly above Kelley Blue Book’s Fair Listing Price for ZIP code 28270 in Charlotte, N.C.

Credit scoreAPRMonthly payment
780 - Excellent5.5%$313
680 - Good9.70%$351
630 - Average13.37%$387
588 - Below average19.02%$447

APR and monthly payment are for a 72-month loan with a $300 down payment, taxes and title costs included. Rates vary by location.

A closer look at Carvana auto loans

Every lender has pros and cons; here are the ones we found looking at Carvana auto loans. You can compare them with the strengths and weakness of other lenders.

Highlights of Carvana auto loans

  • You may not need excellent credit to qualify since Carvana considers a range of credit profiles.
  • No prepayment penalty
  • “Soft” credit check for Carvana to preapprove your down payment and monthly car payment.

Lowlights of Carvana auto loans

  • Carvana does not accept credit cards; you can’t give your down payment or make your car payment with a credit card
  • You can only finance a Carvana car with a Carvana loan.

You may be required to give a down payment for the Carvana auto loan. If the down payment requirement is too high, a trade-in might help, or a vehicle with a lower price or you go back over your application to see if you forgot to include any other verifiable income.

How to apply for a Carvana auto loan

To apply, you’ll need to go to Carvana’s website. Pick out the car you want before you officially apply for a Carvana auto loan. But you could get prequalified for a Carvana loan first, to better know your budget if you’d like.

To prequalify, you’ll have to input your name, ZIP code, date of birth, address and annual income. Then you can shop around for the vehicle you want. On each vehicle description page, you can play around with the Build My Deal tool to see the estimated total cost, including taxes and shipping, APR, down payment, loan term and monthly payment. Once you find the car you’d like, click on the “get started” button and follow through with the application. You can go here to see a full list of the documents you may need to have ready.

 

Carvana vending machine
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The fine print

You must be at least 18 years old, make at least $10,000 a year and have no active bankruptcies in order to qualify for Carvana financing. A loan offer from Carvana is good for 45 days. If you don’t choose a car within that time period and decide you do want to finance with Carvana later on, you’ll need to do another application. One more note: Before selecting any add-ons from Carvana, such as an extended warranty, do your homework to determine what a fair price is.

Who is Carvana financing best for?

Despite offering loans to a broad range of credit profiles, Carvana financing might be best for those with at least fair credit. Carvana’s online calculator doesn’t offer a credit score option below 550.

It’s terribly convenient to do your car shopping and your financing in one sweep — online. And if you can get a better APR with Carvana than with another lender, go with Carvana. The only way to know that you are getting the best deal, however, is apply to a few lenders. It does not hurt your credit to apply to multiple lenders any more than it does to apply to one lender if you do all applications within a 14-day window.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
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Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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Auto Loan, Reviews

Review: Wells Fargo Auto Loan

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Wells Fargo Auto Loan

If it’s time to get a new or used car, it’s time to do your research. Perhaps you’ve picked out the car of your dreams and you want to figure out the best way to pay for it.

When it comes to financing a vehicle, you have a ton of choices. Wells Fargo, founded in 1852, is one of many places to consider getting an auto loan from.

Wells Fargo Auto, a division of Wells Fargo Bank, serves more than 3 million auto loan customers throughout the United States.

About Wells Fargo

Wells Fargo offers new and used vehicle financing through its network of 11,000 active car dealerships, but it’s possible to apply with the bank directly if you’re interested in financing outside of the dealership or refinancing an existing auto loan. You could also use a Wells Fargo personal line of credit or loan to buy a car from a private seller or buy out your leased vehicle, but you may have to pay an annual fee or origination fee. A home equity loan or line of credit is another possibility but puts your home at risk should you default on your car payments.

It’s worth noting that Wells Fargo continues to compensate auto loan customers who were charged for insurance they didn’t need or add-ons after their car loans were repaid or their vehicles repossessed. The bank’s redress program came after a December 2018 settlement with attorneys general from all 50 states calling for $422 million to be repaid to auto loan customers.

Wells Fargo: At a glance

  • Loan terms up to 72months
  • Loan amounts between $5,000and $100,000for new and used auto loans.

Because a majority of Wells Fargo’s loans are through dealerships, what’s known as indirect lending, you may not know your exact rate or terms until you apply through a dealership. A Wells Fargo spokesperson said rates are based on a number of factors, including the borrower’s credit history. While the best rates and terms tend to go to those with the best credit, it’s possible to be approved with less-than-stellar scores at Wells Fargo.

Wells Fargo also offers loans for those looking for specialty vehicles like motorcycles or recreational vehicles. Existing customers may be eligible for a discount if they use autopay to make their vehicle payments from a Wells Fargo consumer checking account.

A closer look at Wells Fargo auto loans

Highlights of Wells Fargo auto loans

  • Multiple ways to pay: You could make your car payment through the bank’s online eServices function, automatic loan payments or at any Wells Fargo branch.
  • APR discount: Wells Fargo offers a 0.25% discount for existing customers who use a consumer checking account to make automatic payments on its car loans.

Lowlights of a Wells Fargo auto loan

  • Mix of direct and indirect loans: While it’s possible to apply directly through Wells Fargo for an auto loan, most of its auto lending is through dealerships.
  • Negative press: In addition to fines Wells Fargo has had to pay in regards to its auto loan customers, it has been fined for the way it treated mortgage customers as well. In all, the bank has agreed to pay billions in settlements and consent orders.

How to apply

As we’ve already mentioned, most customers apply through one of 11,000 dealerships in the Wells Fargo network. But applying outside of the dealership is possible — a Wells Fargo spokesperson said customers may call or visit a branch for more options. It’s possible to apply for a refinance loan online, in person or by calling 800-289-8004. We’ll talk more about refinance loans in more detail, below.

Here’s what the bank will want to know about you and your car:

  • Personal information: Address, contact information, date of birth and Social Security number.
  • Country of citizenship information
  • Marital status (Wisconsin only)
  • Housing information: Whether you rent or own and for how much as well as information about previous recent addresses
  • Income information: Your occupation, gross monthly income and previous employer
  • Information about your car: Year, VIN, mileage and remaining loan balance. You can find out your remaining loan balance by calling your current lender.

The fine print on an auto refinance loan

The only way to make sure you’re getting the best deal on a loan for a new car or to refinance the one you have is to shop around. Make sure a refinance really is in your best interest and that you understand Wells Fargo’s criteria before you sign:

  • Minimum loan amount of $7,500
  • Co-signers allowed
  • Not offered in Alaska, Arkansas, Hawaii, Louisiana, North Dakota or Washington, D.C.
  • May be difficult to get approved if your vehicle has more than 100,000 miles or is 8 years or older.

Once you have applied, Wells Fargo will contact you by phone, mail or email. You’ll have the option of signing and returning the loan package by mail or finishing the process online.

Who is a Wells Fargo auto loan best for?

Wells Fargo auto loans can be a good fit for those in the market for a new or used vehicle, or folks looking to refinance a current loan. It may be the best option for existing Wells Fargo customers looking to refinance — it’s possible to apply directly through the bank, online and, if you’re willing to make auto payments, you may score a lower interest rate.

A Wells Fargo auto loan might be good for anyone shopping for a new or used car as well, but the only way to make sure you’re getting the best rate, particularly if it’s one offered through the dealership, is by comparing it with your preapproval offer from another bank, credit union or online lender.

A Wells Fargo auto loan is not a good fit for anyone interested in a private party auto loan. For those, look to competitors such as Lightstream, Bank of America or a credit union.

Lindsay Martell contributed to this report.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Auto Loan, Reviews

Review: Bank of America Auto Loan

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Bank of America Auto Loan

The history of Bank of America dates back to more than two centuries, but that doesn’t mean its banking services are stuck in the past. In recent years, Bank of America has modernized its service offers by adding mobile auto lending services that allows buyers to choose a car and a car loan in one place. Yes, you can apply for its loans in person at a branch or over the phone, but it’s hard to beat the speed and convenience of applying from home or anywhere you use your smartphone.

According to Bank of America, you could receive a loan decision within 60 seconds of applying, which is about as fast an approval as you can get from any lender, whether in person or online. But don’t be so quick to gloss over the details. While you may get approval decision within a minute, you might not be getting your lowest rates. Bank of America offers competitive rates for new car financing and a discount for certain customers, but other lenders may be able to beat Bank of America when it comes to used car loans and refinancing.

About Bank of America

Bank of America’s online auto buying experience starts when you submit an electronic application through its website where you have the option to use your loan approval to shop for and buy your car through Bank of America’s network of participating dealerships. Once you get your loan approval you can visit the Bank of America website or use the banking app to search a national inventory of more than one million cars, then visit dealerships for test drives and to finish the paperwork.

You can also use a Bank of America loan to buy a vehicle outside of the network. The bank offers loans for:

For specific rates for used and new cars as well as loans you could use to refinance your existing car or to buy out your leased vehicle, see the chart below.

Bank of America: At a glance

  • Loan amounts starting at $7,500
  • Terms between 12 and 60 months

Bank of America offers a wide variety of loans, but its loans aren’t available for specialty vehicles such as motorcycles or RVs. Financing is available to residents of all 50 U.S. states who borrow a minimum of $7,500 ($8,000 in Minnesota), but it can’t be used to buy cars that are over 10 years old or with more than 125,000 miles.

Advertised rates for new car loans are comparatively low, but to find the lowest APR for your loan you’ll need to do some comparison shopping. Rates vary depending on what kind of purchase you’re making, where you shop and the condition of your credit, with the lowest rates available for buyers with excellent credit when they purchase a new car from a dealer. Bank of America advertises much higher rates for private party purchases.

Compare Auto Loans
 New from dealerUsed from dealerUsed from private party*RefinanceLease buyout*
Bank of America3.19%3.39%5.99%3.99%4.19%
Chase4.24%4.24%N/A4.89%N/A
LightStream3.99%3.99%4.99%3.99%4.99%
*Bank of America lease buyout and private party loan rates are current as of Sept. 18, 2019.

If you bank with Bank of America or have an investment account with its wealth management subsidiary, Merrill, you may be eligible for lower rates. Preferred Rewards members get a rate discount at 0.25% for Gold members, 0.35% for Platinum members and 0.50% for Platinum Honors members.

Your eligibility for Preferred Rewards is based on the average asset balances held by Bank of America and/or Merrill over the three months prior to your application, with a minimum average balance requirement of $20,000. You can enroll for free to see if you’re eligible.

A closer look at Bank of America auto loans

Advantages of Bank of America auto loans

  • Loan approval offers lock in your terms for 30 days. That gives you time to shop around and find the car you want.
  • No application or origination fees, unlike some other lenders.
  • No prepayment penalty, meaning you can pay off your loan early and potentially save on interest charges without being penalized.

Disadvantages of Bank of America auto loan

  • Other lenders’ rate discounts may be easier to qualify for than the Preferred Rewards’ discount. PenFed Credit Union, for example, offers a discount to customers who use its car buying service, which can mean new car loan rates as low as 1.49%*.
  • Loan preapproval isn’t available. That means you’ll likely have to take a hard inquiry into your credit, and possibly lose a few points from your credit scores, just to see the loan terms you’re being offered. However, it’s always a good idea to compare auto loan rates and applying to multiple lenders doesn’t hurt your credit any more than it does to apply to one, as long as you do so within a 14-day window.

How to apply for a Bank of America auto loan

Completing an application online is a straightforward process, and if you’re already a bank member you can choose to have some of the application prefilled. Whether you apply online, in person or over the phone by calling 844-892-6002, you’ll need to submit the following information to complete an application:

  • Name
  • Address
  • Social Security number
  • Employment information
  • Income
  • U.S. citizenship status
  • Email address

You may be asked to submit some of the following information to complete your application, if applicable:

  • Purchase agreement/bill of sale
  • Registration
  • Title
  • Vehicle make, model and year
  • Mileage
  • VIN number
  • Lease buyout instructions
  • Proof of income
  • Federal tax returns
  • W-2s

To apply in person, you can make an appointment through the website or walk into a bank branch and talk to a representative. Setting an appointment allows you to avoid waiting and helps ensure a specialist will be prepared with the information you need.

Once you’ve submitted your application, loan decisions are quick. Even if further review is needed after you submit your application, you’ll receive an email with your decision by the end of the following business day.

The fine print

  • Loans are only for cars purchased through franchise dealerships or private parties, which does not include independent dealerships except for CarMax, Hertz Car Sales, Enterprise Car Sales and Carvana.
  • If you apply online, you’ll get the details of your approval via email. Make sure to look them over, including interest rates and repayment terms for new versus used car purchases, before you begin car shopping.
  • Loans are available with payment terms lasting up to 60 months. While a longer term can lower your monthly payment, it can cost a lot more in interest charges. Make sure to do the math before agreeing to a long-term repayment.

Who is a Bank of America auto loan best for?

Savvy car shoppers know that using bank or credit union-backed financing for an auto purchase is generally a better option than going through a dealership. But it can be difficult to arrange bank financing and complete a car purchase without putting in the time to contact several different lenders and visit multiple lots.

If you want the security of financing with a large bank with branches around the country, or even from your pre-existing Bank of America account profile, Bank of America auto loans might be the solution for you. They offer some of the same perks as dealership financing, allowing you to apply for a loan and shop for a car, all within the same platform.

But some extra legwork usually pays off: Comparing rates with other banks, plus credit unions and online lenders is the only way to make sure you’re getting the best deal possible.

*Rate and offer current as of June 1, 2019 and are subject to change. Promotional rate is not available to refinance existing PenFed car loans. Terms apply.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Brady
Sarah Brady |

Sarah Brady is a writer at MagnifyMoney. You can email Sarah here