The good news is that you have options: You can get your car loan from a bank or credit union, or you could go through the dealer. Better Money Habits

Securing a car loan involves deciding on the loan type, gathering required documentation, and comparing rates from different lenders to find the best fit for your budget. As of , average interest rates sit around 7% for new cars and can reach over 11% for used vehicles , though those with excellent credit may still find rates under 5% . 1. Choose Your Loan Type

What Do I Need to Qualify for a Car Loan? | How to Get an Auto Loan

: You apply directly to a bank or credit union . This often offers more transparency and potentially lower rates.

: These are the most common. The vehicle serves as collateral , which generally results in lower interest rates. However, the lender can repossess the car if you default on payments.

Comparing Bank Car Loans vs Dealer Financing - Better Money Habits

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