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US Bank Auto Loans Review 2022

 3 days ago
source link: https://www.businessinsider.com/personal-finance/us-bank-auto-loans-review
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US Bank auto loans review: Great rates on used cars, but a fee for paying off your loan within a year

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US Bank offers its lowest auto loan rates to borrowers with credit scores over 800. US Bank; Alyssa Powell/Insider

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Editor's rating: 3.5 out of 5 stars

The bottom line: US Bank offers loans at great rates for borrowers who have excellent credit, and it's an especially strong option if you're looking for a used car or to refinance. However, you won't be able to buy out a lease with US Bank, and borrowers with worse credit might not qualify. 

Pros and cons of US Bank auto loans

  • Many options for term lengths. You're able to choose from six term lengths, ranging from one to six years with US Bank. This allows for flexibility on the timeframe you want to repay the loan.
  • Great rates available for borrowers with excellent credit. US Bank's top rates are comparable to other competitors' rates, particularly on used cars and auto loan refinancing. 
  • Discount for having other accounts with US Bank. If you set up automatic loan payments from a US Bank checking or savings account, you'll get a 0.5% rate reduction. 
  • Mobile app. The bank has a well-reviewed mobile app on the Google Play and Apple stores if you prefer to manage your loan on the go. 
  • No option to buy out current lease. Other lenders have this choice available, so if this is the loan product you're looking for, you'll have to go somewhere else. 
  • High minimum loan amount. The lowest amount of money you can take out with US Bank is $5,000, so it may not be a fit if you only need a small amount of financing for your vehicle. 
  • Prepayment penalty. If you close your account within 12 months, you'll fork over a prepayment penalty of 1% of the original loan amount, with a $50 minimum and $100 maximum.

How US Bank auto loans work

US Bank offers new and used car loans, and will help you refinance your current auto loan. US Bank doesn't offer the option to buy out your current lease. You can borrow between $5,000 and $100,000, regardless of the loan type.

APRs for US Bank's auto loans: New as low as 5.49%, Refinancing as low as 6.09%.

Term lengths are between one and six years. Understand that the longer your term, the more you'll pay in interest. A long loan term could also cause you to go upside down on your loan, meaning you owe more money on your car than it's worth. 

The lender will allow you to get your financing preapproved without having your car picked out. Once you decide on a car, you can finalize your loan terms. US Bank doesn't specify a minimum credit score to get a loan or a timeframe for when you'll receive your money. 

US Bank lists the following requirements to get the best rate on your auto loan:

  • A term length that is three years or shorter
  • A loan amount of $30,000 or more
  • A credit score of 800 or higher
  • A vehicle less than one year old
  • A financing amount of 80% or less of the car's value

You'll also need to set up automatic payments from a US Bank savings or checking account to get the lowest rate, but you don't need to do so to be approved for a loan. A US Bank relationship will take 0.5% off your rate. 

However, if you close your account within one year, you'll pay a prepayment penalty of 1% of the original loan amount, with a $50 minimum and $100 maximum. Depending on where you live, you may also pay a title registration fee. 

Customer service is available by phone Monday through Friday from 7 a.m. to 10 p.m. CT and Saturday from 9 a.m. to 5 p.m. CT. 

Is US Bank trustworthy?

US Bank, a Better Business Bureau-accredited company, has an A+ rating from the BBB. The BBB is a nonprofit organization focused on consumer protection and trust. The BBB evaluates companies based on their response to customer complaints, honesty in advertising, and openness about business practices.

However, US Bank has been at the center of a couple of recent scandals. In 2020, US Bank was one of three mortgage servicers that settled an agreement with the Department of Justice to pay a combined $74 million. The DOJ claimed that the servicers didn't follow certain regulations and made errors that impacted borrowers filing bankruptcy.

In that same year, US Bank paid $200 million in a settlement with the government over allegations that the bank approved home loans for insurance when the borrowers did not meet standard underwriting requirements. 

If US Bank's recent scandals make you uncomfortable, you may want to consider a different lender for your auto loan needs. 

How US Bank auto loans compare
  • 61a1537f1ca528001811734d?width=400
    US Bank Auto Loans
  • 619d2130d2fd62001820aba6?width=400
    PNC Auto Loans
  • 605e2b798e71b30018519125?width=400
    Bank of America Auto Loan
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Editor's Rating
3.5/5
A five pointed starA five pointed starA five pointed starA five pointed starA five pointed star
Regular APR
New as low as 5.49%, Refinancing as low as 6.09%
Editor's Rating
3.5/5
A five pointed starA five pointed starA five pointed starA five pointed starA five pointed star
Regular APR
From dealer: 2.14% to 14.54%, From private party: 4.64% to 21.04%, Lease buyout: 3.64% to 20.04%, Refinance: 2.64% to 19.04%
Editor's Rating
4.75/5
A five pointed starA five pointed starA five pointed starA five pointed starA five pointed star
Regular APR
New: Starts at 3.79%, Used: Starts at 3.99%, Refinance/Lease Buyout: Starts at 4.89%
Apply for a loan
On US Bank's website

US Bank and PNC have the same loan amount range, while Bank of America has a higher minimum and maximum. If you're looking for a large loan amount, Bank of America might be the best choice. 

All three lenders service every US state and Washington, DC, though you may also pay a title registration fee with US Bank depending on where you live. 

US Bank has the highest starting rates for new cars, but lower starting rates for used cars and refinancing than PNC or Bank of America. You'll probably need to have solid credit to qualify for loans from any of these three lenders, and the lower your credit score, the more likely you are to pay higher rates. 

Frequently asked questions

Is US Bank a good bank for auto loans? Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.

Yes, US Bank is one of many good options for auto loans, though the best fit for you depends on your individual needs and financial situation. US Bank offers competitive rates for borrowers with excellent credit, though borrowers with worse credit might not qualify at all. 

How long does it take US Bank to approve a car loan? Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.

The bank says most applicants get an approval decision within two hours during normal business hours. 

What credit score is needed to get a car loan from US Bank? Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.

US Bank doesn't list a minimum credit score requirement for its auto loans. That said, you're more likely to qualify with a strong credit score. 

Loans Reporter
Ryan Wangman is a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF). In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe.  Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services here >>
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