Find the Best Car Loans in Nashville, TN

How to get an auto loan in Nashville

Music City residents have multiple options when it comes to obtaining a car loan. Numerous places around the city will work with you to fund the purchase of your next vehicle, including credit unions, banks, online lenders and car dealerships.

While it’s not required, getting pre-approved for a car loan offers several advantages throughout the buying process, such as:

• Letting you decide your monthly payments before purchasing a car
• Knowing what types of vehicles you can afford
• Giving you leverage while negotiating car prices and fees

Getting a car loan in Nashville

Lenders have different requirements for qualifying for a car loan, but most require personal and financial information to show you can pay back the loan. Some things lenders may look at include:

• Credit score
• Income
• Previous loans
• Outstanding debts
• Spending habits

Your credit score heavily influences the annual percentage rate (APR) of your loan, so it’s a good idea to check your credit score before applying. Nashville residents with credit scores lower than 580 usually receive APRs in the mid-to-high teens, while people with excellent credit scores typically pay 3 to 5 percent.

When applying for a loan, you'll also choose a repayment term. Most car dealerships and credit unions offer car loans of up to five years, although some lenders have six- and seven-year loans. Shorter loans incur less interest and are cheaper overall but have higher monthly payments.

You can also choose how much you plan on paying upfront as a down payment. A more substantial down payment reduces the total you owe on the car, letting you shorten the term of your loan or make lower monthly payments.

Other expenses when purchasing a car in Nashville

When deciding the amount of your loan and how much you can spend on a car, be sure to account for additional fees or costs. In addition to any fees charged by your dealership, you need to have money on hand for car insurance, state registration fees and the vehicle’s sales tax. In Tennessee, certain situations may qualify you to be exempt from paying state sales tax.

Getting a car loan with bad credit in Nashville

If you have bad credit, there are still ways to obtain a car loan. First, ask a trusted relative or friend if they will co-sign your loan. This alleviates some of the risks for the lender, but your co-signer is responsible for your loan if you default. Some institutions, such as online lenders, work with those who have less than desirable credit scores.