There's no single "best" bank for an auto loan, as it depends on your credit, relationship with the bank, and if you're buying new or used, but top contenders for low rates include PenFed Credit Union (great for membership access), Bank of America (especially for Preferred Rewards members), and Capital One Auto Finance (strong online tools and dealer network). Local credit unions like those in Southern California (CU SoCal, Wescom) often offer competitive rates too, so comparing options like myAutoloan for rate shopping is key.
These include Faysal Bank Limited, MCB Islamic Bank, Dubai Islamic Bank, MCB Bank Limited, Al Barakah Bank Limited, and Bank of Punjab. These are the best banks for automobile loans. We offer car financing in the case of both new and used cars with low car markup.
To get a 0% interest car loan, you need excellent credit (740+ FICO), a stable income, low debt, and often a significant down payment (10-20%), plus you must find specific manufacturer promotions, as these deals aren't from traditional banks, requiring you to shop for deals on certain new models and negotiate the car's price separately.
A 5% APR is considered to be a good interest rate for a car loan but not a great interest rate. Make sure to compare interest rates from different lenders before making a decision. You may be able to get a lower interest rate if you have a good credit score or if you make a large down payment.
As of January 2026, several automakers offer 0% APR deals on various models, including Chevrolet (Blazer EV, Silverado EV), Dodge (Charger), Ford (Mustang Mach-E, F-150 Lightning), Hyundai/Kia (Telluride, Palisade, EV6, Niro, Ioniq 6), Subaru (Outback, WRX, Forester Hybrid), and Mitsubishi (various models), though availability varies by region, model year, and requires excellent credit. Deals often have terms like 60 or 72 months and might include extra incentives, but expire, so checking local dealer offers is crucial.
Generally, 0% interest personal loans are rare, as lenders make profit through interest charges. Some credit cards offer introductory 0% APR on purchases or balance transfers for a limited time, but these are not personal loans.
Why Should I Get a Car Loan from a Bank Instead of a Dealership?
10 years tenure: At an interest rate of 7.45%* p.a, the EMI is approximately Rs. 1,78,507 per month. 20 years tenure: At the same interest rate, the EMI reduces to Rs. 1,24,790 per month.
If your gross salary is $60,000, your take-home monthly pay is probably around $3750, assuming about 25 percent of your pay goes toward taxes and other expenses. Based on a calculation of spending 10–15 percent of your monthly pay on a car loan, you should spend no more than $562.50 on your monthly car payment.
It may be easier to secure a loan for a new car than it is for a used car, and new car loans often come with lower interest rates. Used cars can be a good fit if you're on a budget and they generally cost less to insure; however, interest rates for used car loans are often higher than for new car loans.
Yes, car interest rates saw a gradual decline through 2025, influenced by Federal Reserve rate cuts, with modest decreases seen by year-end, though significant drops were not expected immediately; strong credit scores yielded better rates, while those with poor credit saw less relief, with expectations for slow improvement into 2026.
The average APR for a car loan will depend on what deals are available at the time so it's worth shopping around. Personal loans are often the cheapest way to borrow money to buy a car if you have a good credit rating and can get access to the best deals.
The best cars for first-time buyers focus on reliability, affordability, safety, and good fuel economy, with top recommendations consistently being the Honda Civic, Toyota Corolla, and Hyundai Elantra for sedans, plus SUVs like the Honda CR-V and Toyota RAV4 for more space, while the Mazda3 offers sporty handling and strong safety ratings. Budget-friendly options like the Nissan Versa, Kia Soul, and Subaru Impreza (with standard AWD) are also excellent choices for new drivers.