Get a preapproval before you set out to buy a used car. The process can take up to a week. Survey rates online and call to apply---this way you can discuss your needs with your lender.
Types
Bank loan rates are usually advertised online at the bank's web page---check online or call to find out rates. Local credit unions often have the lowest used car rates. Some banks, such as Bank of America or Wachovia, are in every state and may offer a good rate for used car loans, too. Dealerships use several banks and an electronic approval process that is usually same-day. If you are purchasing from a dealer, ask about rates for comparison purposes. Subprime lenders, found online or accessed at a dealership, offer high-interest rate loans for risky buyers or those with a negative credit history.
Considerations
After you have determined where you would like to apply, call the bank and ask how you can qualify for the used car rate. Some banks offer a low rate, but there are restrictions. For example, the rate is based on newer vehicles with low miles as determined by the bank. Or, you may have to take out a loan for shorter term to get the low interest rate. If you already know which car you want, ask competing banks about restrictions.
Warning
Check your credit history before applying---use the Annual Credit Report website, which offers one free report from each credit bureau annually. It will do you no good to review the best interest rates for car loans if you cannot secure financing. Your credit score should fall in the 700s and up, and your history should not reflect any currently past-due payments if you desire lower advertised rate approval. If you do have poor credit, you may have clear up any credit issues beforehand.
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