The Guide to Getting the Best Car Loan Rates in Texas

Key Takeaways

• Before applying for a loan, it’s a good idea to check your credit to make sure you’re in a good position.
• Getting preapproved for a loan can help you plan your budget. 
• Credit unions typically offer the best auto loan rates in Texas.
• Car loan rates in Texas depend on your credit score, the total amount, and the length of the loan. 
• Hyundai regularly offers 0% interest for the most qualified buyers on select vehicles.

If you’re shopping for a car in Texas, the difference between a good loan and a bad one can add up to thousands of dollars. The good news is that there are effective strategies to find the best car loan rates in Texas. In this guide, we’ll cover everything you need to know: how to get approved, what affects your rate, and how to get the best terms. 

Texas Towing Regulations Texas Car Sales Tax

How to Get a Texas Car Loan

Unless you’re buying your new vehicle outright, you’ll need a loan. Here’s a quick breakdown of how to get a Texas car loan:

1. Determine your budget, including how much you can put towards a down payment. Consider what the monthly payment will look like. 
2. Check your credit before you shop. Texas lenders pull your credit score, and the rate you’re offered depends heavily on where your score lands. A good score ranges between 660 and 780. 
3. Get preapproved before you hit the dealership. Getting preapproved from a bank, credit union, or online lender gives you a hard number to work with and can also help you negotiate.  
4. Gather your documents. Texas lenders usually ask for a valid state ID, proof of income, proof of residence, and your Social Security number. 
5. Pick out your vehicle and choose your financing. Make sure you understand the terms of the loan before signing anything. Look at the interest rate, monthly payment, repayment schedule, and other conditions that may affect your auto loan. 

How to Get the Best Car Loan Rates in Texas

A good car rate can save you thousands of dollars over the life of a loan. These tips can help you get the best car loan rates in Texas:

• Go with a credit union first. Credit unions consistently offer the lowest auto loan rates in Texas because they’re owned by members and not chasing shareholder profits. 
• Dealerships can offer credit union loans too. Even if you’re not a member, the dealer’s finance department can sometimes place your loan with a credit union at a better rate than their in-house financing. 
• Boost your credit score before you apply. A score of 720+ will get you the best rates. If you’re in the 600s, spend 60 to 90 days paying down credit card balances, disputing any errors on your credit report, and avoiding new credit inquiries. Even a 30 to 40 point bump can drop your rate. 
• Shorten the loan term if you can swing the payment. Lenders offer lower rates on 36- and 48-month loans than on 60- or 72-month loans. 
• Time your purchase. Dealers and lenders often run special financial promotions around holidays like Memorial Day, Fourth of July, Labor Day, and year-end clearance. 
• Shop around to compare lenders. The first offer won’t necessarily provide the best rate.
• Make a down payment. The more money the lender provides, the higher the risk. Making a down payment lowers the overall loan, which often results in a lower auto loan rate.  

Is It Different If You’re Buying a New or Used Car?

Yes, and the difference can be pretty significant. Car loan rates in Texas are almost always lower for new cars. They are less risky for lenders because they have a known value, a full warranty, and no hidden mechanical issues. Used cars carry more risk. The older the car, the more the lender worries about breakdowns and depreciation, which can lead to a higher rate.  

Used Trucks For Sale

Does Your Credit Score Affect Your Car Loan Interest Rate?

Your credit score is the single biggest factor lenders look at. Your score tells them how likely you are to pay them back, and they set your rate accordingly. If your score is below 660, it’s worth spending 60 to 90 days improving it before you apply. Even a small improvement can lead to a lower interest rate.  

Does the Length of the Loan Affect Your Interest Rate?

Yes. Shorter loan terms get lower interest rates, and longer terms get higher rates. Lenders see longer loans as riskier because there’s more time for something to go wrong. To compensate for that risk, they charge a higher rate. You’ll get the best car loan rates in Texas on shorter loans.

For the lowest rates, consider a 24- or 36-month loan. The only catch is that your monthly payment will be higher. However, if you can swing it, you’ll save a ton of money in the long run. Avoid 72- and 84-month loans, as those come with the highest rates. 

How Long Does It Take to Get Approved for an Auto Loan at the Dealership?

Getting approved for an auto loan at the dealership is a quick process. Dealership finance departments use automated lending systems that pull your credit and submit to multiple lenders at once, with offers returning in 15 minutes to an hour. 

Does Hyundai Ever Offer 0% Interest Rates?

Yes, Hyundai offers 0% APR financing regularly, especially on select new models during promotional periods. Typically, the 0% interest rate lasts for up to 72 months. That means you pay no interest on your auto loan for up to 6 years. 

You’ll need excellent credit to qualify, as these rates are for buyers with credit scores of 720 or above. The exact promotion changes regularly, so make sure to ask your Hyundai dealer for details. 

Find Your Next Vehicle Today at Tipton Hyundai in Brownsville

In the market for a new vehicle? Finding the best car loan rates in Texas is worth the effort. To get a better rate, go through a credit union, boost your credit score before shopping, choose a shorter loan term, and compare multiple offers. 

Now that you know how to get the best Texas auto loan rates, it’s time to shop for your next vehicle at Tipton Hyundai in Brownsville. We have a huge inventory of new and used cars, and our dedicated team provides exceptional service. We’re in Brownsville and serve the entire area and state, including McAllen, Harlingen, and all the way out to Corpus Christi and San Antonio. Come check us out today! 

New Hyundai Inventory Used Cars For Sale

FAQs

Can I make extra payments on my car loan?

Yes, you can almost always make extra payments on your car loan, but you’ll need to tell the lender where to apply the payment. Make sure you write “apply to principal” in the memo or check the box on your online payment portal. 

Do car loans help improve my credit?

If you make your payments on time, an auto loan can boost your credit. On-time payments build a positive payment history. A late payment, however, can drop your score by 50 to 100 points. 

Does paying extra lower my monthly payment?

No, paying extra does not lower your future monthly payment. Your monthly payment is fixed at signing based on the loan amount, term, and interest rate. Sending extra money reduces your principal balance and shortens the loan term, meaning you’ll pay off the loan early. The only way to lower your monthly payment is to refinance the loan at a lower rate or longer term. 

What happens if I miss a payment on my car loan

It depends on how late you are. Most lenders have a grace period of up to 9 days. If you submit payment after the grace period, you’ll be charged a late fee. Your lender may also report the late payment to the credit bureaus once you’re 30 days past due. At 60 to 90 days late, the lender may repossess your car.