Capital One Auto Loans: A 2023 Review
If you have fair credit and wish to prequalify for an auto loan, Capital One might be the right choice for you. The company allows borrowers with less-than-perfect credit to qualify for an auto loan without adversely affecting their credit score during the prequalification process.
However, if you don’t prequalify with Capital One, you have the freedom to explore other lenders without damaging your credit. Credit unions, with their more flexible lending requirements, could be a viable alternative.
Pros and Cons of Capital One Auto Loans
Capital One auto loans come with their own set of advantages and disadvantages:
PROS
- Prequalification Available: The option to prequalify without a hard credit pull offers a no-risk opportunity for borrowers.
- Personalized Financing Options: Capital One’s Auto Navigator allows you to view real rates and monthly payment quotes on specific vehicles available for sale through participating dealers.
- Low-Income Requirement: Capital One stands out with an unusually low minimum monthly income requirement of $1,500.
CONS
- Two Applications Required: Despite being preapproved by Capital One, you’ll still need to complete a credit application at the dealership.
- Limited to Approved Dealerships: Funding is only accessible for vehicles from authorizations that work with Capital One.
- Not Available in All States: Residents of Alaska and Hawaii are ineligible for Capital One auto loans.
Qualifying for a Loan or Refinancing
While Capital One doesn’t disclose specific credit score requirements, it does outline the eligibility criteria for its auto loans:
- Monthly income of at least $1,500.
- Age of at least 18 years old.
- A residential address within the contiguous U.S. (excluding Alaska, Hawaii, and Puerto Rico).
For purchasing a used car, the financing amount must be at least $4,000, and the vehicle should not be older than 10 years or have more than 120,000 miles. Refinancing requires an outstanding loan amount of at least $7,500 with 12 months remaining.
The car being refinanced must be less than 10 years old, but there is no maximum mileage restriction. It’s important to note that Capital One doesn’t refinance vehicles that are no longer in production, and commercial vehicles are also ineligible.
Capital One versus PNC
Compared to PNC, Capital One provides prequalification without transparent pricing. PNC allows you to see rate ranges by entering your zip code and loan amount before prequalifying. PNC also has a nationwide network of branches and doesn’t restrict borrowers to approved dealerships.
However, Capital One’s minimum monthly income requirement is unusually low, making it favorable for those in a low-income bracket. Additionally, Capital One has a lower loan minimum, which is beneficial for those seeking inexpensive vehicles.
Capital One versus U.S. Bank
U.S. Bank, like PNC, offers loans without dealership restrictions, making it easier to shop around for the ideal car. Their maximum loan amount of $100,000 surpasses Capital One’s limit of $75,000. U.S. Bank also provides lease buyout loans for financing the purchase of a leased vehicle, which Capital One does not offer.
However, U.S. Bank requires a sky-high credit score of 800 or higher to obtain their best rates, making Capital One a more attractive option for borrowers with average credit scores.
DOs and DON’Ts
DOs
- Quick Prequalification: Capital One’s Auto Navigator allows for fast prequalification with no hard credit pull.
- Personalized Funding: The mobile app permits you to view monthly payments and interest rate particulars for exact vehicles.
- Low-Income Requirement: Capital One’s minimum income requirement of $1,500 per month stands out as particularly favorable.
DON’Ts
- Dual Applications: Completing a credit application at the dealership is necessary even after being preapproved by Capital One.
- Limited Dealership Options: You can only buy vehicles from charters working with Capital One.
- State Availability: Auto loans are not available to inhabitants of Alaska and Hawaii.
Contacting Capital One Support
If you need assistance with Capital One auto loans, you can reach their support team through phone or online chat.
- For Existing Loans: Representatives are available Monday through Friday from 9 a.m. to 8 p.m. ET.
- For Loan Applications: Representatives are available Monday through Friday from 9 a.m. to 9 p.m. ET and Saturday from 10 a.m. to 7 p.m. ET.
Types of Auto Loans Offered by Capital One
Capital One provides financing options for both new and used cars, as well as auto refinance loans.
New and Used Auto Loans
- Loan Amounts: Starting from $4,000.
- Loan Terms: 24 to 84 months.
- APR: Not specified.
Auto Loan Refinancing
- Loan Amounts: $7,500 to $75,000.
- Loan Terms: 24 to 84 months.
- APR: Not specified.
Auto loan refinancing with Capital One can help lower your monthly payments or APR, potentially saving you money. To qualify for better rates and terms, based on your credit score and finances, you need to meet specific eligibility criteria. You can also choose to refinance to shorten your loan term and pay off the loan faster.
Applying for a Loan with Capital One
The application process starts with a prequalification, which doesn’t require a hard credit pull. If you get prequalified, you can view monthly payments and interest rate details for specific cars you’re interested in. This prequalification is valid for 30 days, giving you ample time to shop for the right vehicle.
The next step involves visiting the dealership, completing a credit application, and getting final approval from Capital One. A second application is necessary, which can be a bit inconvenient, but it’s similar to other lenders’ processes.
Features and Perks
Capital One doesn’t provide detailed information about additional features or perks, but one notable feature is the Auto Navigator, which helps you find a car that suits your needs.
Fees and Penalties
There is no origination fee for Capital One auto loans. However, the company may charge other penalty fees, such as late or missed payment fees.
Auto Financing Restrictions
Certain brands and vehicle types are ineligible for Capital One auto loans, including Oldsmobile, Daewoo, Saab, Suzuki, Isuzu, commercial vehicles, motorcycles, RVs, ATVs, boats, camper vans, motor homes, vehicles with chronic malfunctions, branded title vehicles, lease buyouts, and vehicles without a vehicle identification number (VIN) or title.
Additionally, there are age restrictions for vehicles, both for purchase and refinancing loans.
Capital One Auto Loan Availability
Capital One auto loans are only available for vehicles from dealerships in their Auto Navigator network. Prequalification is done online, but the loan is finalized at the dealership, so you’ll know the exact APR and payment amounts after visiting a dealer in person.
Credit Score Requirements
Capital One doesn’t specify minimum credit score requirements but requires applicants to have a monthly income of at least $1,500. While it may be a good choice for those with poor credit, approval for low-credit borrowers is not guaranteed.
Impact of Credit Score on Capital One Auto Loan
Borrowers with low credit scores might encounter higher interest rates for Capital One auto financing. However, prequalification can be done without affecting the credit score, allowing comparison with other lenders’ prequalification offers.
Conclusively,
Capital One’s auto loans cater to borrowers with fair credit who appreciate the convenience of prequalification and flexible income requirements. However, it’s essential to weigh the pros and cons and compare offerings from other lenders before making a decision.
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