How to lower APR on a car loan

6 tips for getting a low rate and boosting your chances to save


Potential dollar savings from lowering APR


Lowering the annual percentage rate of an auto loan is one of the best ways to save on vehicle financing and the total cost of buying a car. Take a look at the following approaches to see what may work best for you.


1. Check your credit reports and build credit

Whether you want to save cash on financing for your existing car or get a low interest rate and APR to buy your next one, checking your credit position and building credit may help you get started.

You can review your credit history in credit reports, compiled by the three major credit reporting agencies, for free once a year. Check for errors and inaccuracies that might harm your credit score and dispute them if necessary. A higher score usually makes it easier to qualify for a loan and may result in a better rate.

There are no hard-and-fast rules to building credit, but the Consumer Financial Protection Bureau offers these tips: pay your bills on time, every time; don’t get close to your credit limit; a long credit history helps your score; and only apply for the credit you need.


2. Apply for refinancing

This is a popular way to potentially lower APR when you already have a car loan. Auto refinancing is the process of applying with a new lender to pay off your existing loan and replace it with a new one with agreed upon terms, such as a reduced APR and a longer or shorter loan term. If you qualify for refinancing with an APR one percentage point below your existing rate, you could make a decent saving.


3. Apply with a co-borrower or add a cosigner

When buying a car, a creditworthy co-borrower will often strengthen the application, particularly if your own credit is bad.* Co-borrowers enter into a joint auto loan contract, each with equal rights to the vehicle and obligations on the loan, which spreads risk in the eyes of a lender. Alternatively, consider adding a cosigner to the application. A cosigner is required to make any missed payments or pay back the loan in full if the borrower fails to do so, but has no rights to the vehicle.


4. Shop around

Shopping around for auto financing online lets you compare rates and terms and may land you a reduced rate from the comfort of your chair. Consider direct-to-consumer lenders, such as RoadLoans, that offer a streamlined process and instant decisions.


5. Think about shorter loan terms

Longer loan durations often have higher interest rates so a shorter term may be another route to a lower APR on your auto loan. Keep in mind a shorter term might result in a higher monthly payment than a lengthier one, where the loan amount is spread over a greater period. However, a shorter term means you’ll pay interest over a shorter period, of course, which may also reduce what you’ll pay for the vehicle in total.


6. Negotiate APR and interest rate

Did you know APR and interest rate are two factors that are typically negotiable on a car loan? Negotiating lower rates with a lender is another way for approved applicants to potentially save.


See if you can lower your APR in just a few minutes

Lowering the APR on an auto loan doesn’t have to be a time-draining hassle. Whether you’re interested in refinancing or maximizing your chances of getting a low rate for your next vehicle, it takes only a few minutes to complete RoadLoans’ short online application. Enter your information, click submit and we’ll provide you with an instant decision. If approved, you may be on the road to some great savings, which leaves more cash in your budget for other things in life.

RoadLoans accepts applications from people with all types of credit. However, we do not accept applications to refinance loans from existing Santander Consumer USA and Chrysler Capital customers.

Apply for auto financing and get an instant decision.


* “Bad” or “poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press),,, Investopedia, and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by and Santander Consumer USA.



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