Shop your loan around on MyAutoLoan to get the best rates available even on bad credit
I’ve covered personal loans and peer-to-peer lending for years but there’s one part of the loan market that never seemed to make it into the 21st century.
Getting a car loan has remained an in-person struggle for people with bad credit, fighting with the banks and car dealerships for affordable rates.
MyAutoLoan has taken from the LendingTree business model to help you shop your loan around. The website connects national lenders and car dealers directly with borrowers to get you up to four offers on your loan.
In this MyAutoLoan review, we’ll cover how the process works as well as pros and cons of the website.
Pros of MyAutoLoan
- Get multiple offers on your loan and pick the best rate
- Easy loan requirements even for bad credit borrowers
- Get pre-approved for a loan before you go car shopping
- Loan terms from 24 to 84 months
Cons of MyAutoLoan
- Rates as high as 24% for bad credit loans
- Not available in Alaska or Hawaii
How Does My Auto Loan Work?
MyAutoLoan is a loan aggregator which means it has a partnership with national lenders, dealer financing and others to connect borrower loan applications. When you fill out a loan application on the website, you get up to four offers from different lenders.
That competition between lenders for your loan means you get a better deal on rates.
The website specializes in all types of car loans including new, used, refinance and lease loans. They can even help you get a motorcycle loan.
Clicking through to the website, you’ll use the drop-down to pick your loan type and get offers. MyAutoLoan does one check on your credit so you don’t have each lender pulling your credit report. The website automatically matches your loan with up to four lenders that will each estimate your interest rate.
Rates and terms will differ a little on the different types of car loans the website offers. MyAutoLoan has a great rate calculator that will estimate your payments and interest rate depending on your credit.
Filling out the application takes less than a few minutes with your address, contact info and employment information. The process works instantly. You’ll get offers within minutes and can have the loan approved within a day or two.
New car loans are the most common type of credit the site offers. Since new cars are in better condition and hold their value, loan rates are the lowest for this type of loan. MyAutoLoan can work directly with the dealership to get you behind the wheel.
** Sorry, I’ve got to get on my soapbox here. While rates are lower for new car loans, and everyone loves that new car smell…can you really afford a $25,000 car? I talk to readers every week that are drowning in debt because they have a car payment that’s as much as their mortgage.
Please consider a used car, even if it’s only a couple years’ old, instead of that expensive new model. (rant over)
Used car loans buying from a dealer can get you a great value and low rates. MyAutoLoan works with a nationwide lender as well as individual dealers that compete for your loan. You can get pre-approved for an amount to know exactly how much loan you can afford when shopping.
Refinancing a car loan can be a great choice, especially if you went to one of those buy-here, pay-here dealers. The rates on those loans are often 36% or more so refinancing through MyAutoLoan can save you thousands in interest and lower your monthly payment.
Lease car loans can be used to buy out the lease on your car. I’ve leased a car before that I loved but then had to turn it in at the end of the lease. With a car lease loan, you can get the money to buy the car and keep it.
Private party car loans are basically like peer-to-peer loans and MyAutoLoan is one of the only sites I’ve found that does it. Just like a personal loan, the website will deposit money in your account to buy the car from the owner.
Does MyAutoLoan Work for Bad Credit?
MyAutoLoan works with just about any credit score, even bad credit. Loan guidelines on the website require only a 500 credit score or higher.
To give you an idea of how low this is, I destroyed my credit score in 2009 after missing mortgage payments on rental properties and was almost pushed into bankruptcy. Even then, my credit score only fell to a 580 FICO.
The fact that anyone can get a car loan on MyAutoLoan doesn’t necessarily mean you should. Interest rates are going to be higher for bad credit loans. I used the auto loan rate calculator on the website to estimate bad credit rates and got a range between 18% to 21% annually.
That’s way under rates on credit cards or buy-here, pay-here dealers but will still mean a payment of $208 each month. Not too bad but might be tough to make when your budget is tight already.
The truth is though, most people need a car if only to get to and from work every day. MyAutoLoan offers some of the lowest rates I’ve seen by shopping your loan around to national lenders and dealers.
Before you apply for financing at the dealer, make sure you’re getting a good deal by checking on the website here.
MyAutoLoan Car Loan Requirements
While the website specializes in bad credit car loans, there are some general requirements you need to meet for approval. These are pretty standard as far as online personal loans and most people should qualify.
- Be at least 18 years of age (you can use a co-borrower)
- Minimum income of $1,800 per month or $21,600 per year
- Buying or refinancing a car with less than 125,000 miles and less than 11 years old
- Loan must be for at least $8,000
- Have a 500 credit score or higher
- Not have applied for a car loan within 31 days
Basically, the website is only making loans on quality cars with some value in them. The requirements for borrowers are some of the easiest I’ve seen. Almost nobody else lends as low as a 500 FICO score.
What APR is Good for a Car Loan?
Most people only look at the interest rate when deciding on a loan but the annual percentage rate (APR) is the real cost of the loan. All lenders are required to show you the APR and include any fees and costs to the loan.
But what’s a good APR for a car loan?
Since car loans are secured on the vehicle, rates are usually lower than you’ll find with an unsecured personal loan. You rate is going to be higher or lower depending on your credit score but there is a standard range.
Loan rates start around 3.6% for very good credit but rise quickly from there. Most people will get a rate between 7% to 10% on their loan unless they have very bad credit.
The average rate of 19% for bad credit car loans on MyAutoLoan is still well below the average personal loan rate of 24% and 28% on credit cards.
MyAutoLoan offers an easy rate calculator to estimate your loan. You filter by type of loan, loan amount, credit score and your zip code to find the average rates on the website.
I played around with this rate calculator to find low, average and high rates for different types of credit scores. The lowest rate I got was just 2.4% on a new car loan and excellent credit. The highest I found was around 24% for bad credit on a used car.
That’s comparable to most dealer car loan rates, maybe even a little lower because MyAutoLoan shops your loan around to different lenders.
Can You Pay Off a Car Loan Early?
There are no prepayment penalties on car loans so you can always pay off your loan early to save on interest.
One of my favorite debt payoff strategies is called the debt snowball. This means ranking your debt by interest rate, from highest to lowest, and then making extra payments on the highest-rate debt first.
Where your car loan falls in this list is going to depend on your credit score and other debts. If you have credit cards then it’s likely that they will be at higher rates. Your mortgage will likely be at a lower rate even if you have bad credit but rates on car loans aren’t too much higher.
It’s always smart to pay off your loans early by making extra payments but make sure you have money set aside in an emergency fund. Making those extra payments on a loan is fine but an emergency expense could make it difficult to make even regular payments on your loans.
Lenders won’t care if you’ve been making extra payments on a loan if you fall behind on regular payments. Make sure you have at least a month or two expenses covered in an emergency fund before making extra payments on your loans.
What Credit Score Do I Need for a Car Loan?
Most traditional banks and car dealerships won’t even look your way if you have a credit score under 670 FICO. That’s the cutoff for prime lending and where borrowers qualify for government loan guarantees.
Getting a loan with a 660 credit score or lower means going online to personal loan sites or aggregators like MyAutoLoan.
Even with personal loan and peer-to-peer sites, you’ll usually need a credit score of at least 540 or higher. That’s why I’m surprised that MyAutoLoan can approve borrowers with a score as low as 500 FICO.
One important thing to consider is that most of these websites do a soft-pull of your credit for pre-approval and to estimate a rate. It doesn’t get recorded on your credit report and won’t hurt your score.
That means you can apply to a few different loan websites to check your rate and get the best deal. Most of these websites will provide instant approval and you’ll get your loan within a couple of days.
MyAutoLoan Review Summary
MyAutoLoan is one of the first websites to shop your car loan around to 20+ national lenders and dealers, promising up to four loan offers in minutes. This means you get to pick the best rate available and can customize your loan by term.
One of the biggest advantages of MyAutoLoan is its easy credit requirements including a credit score as low as 500 FICO and the ability to use a co-signer for your loan. You can get a loan on a car as old as 10 years and for up to $100,000 on monthly payments.
The one drawback to MyAutoLoan is that your credit information is shared with individual loan companies which means you could get calls and offers even after you’ve accepted a loan. This can be annoying but it’s a small price to pay to instantly shop your loan around.
It’s nice to see car loans finally catch up to the online model of personal loans and peer-to-peer lending. MyAutoLoan is a great option to shop your auto loan around to get the best rate available and the site even works for bad credit borrowers. Make sure you know how much loan you can afford and consider making extra payments to pay off your car loan early when possible.