Securing an auto loan can be a major financial decision. With a vast majority of lenders and loan products to choose from, it’s important to understand your options and find the right financing solution for your needs and budget. One of the largest banks in the United States offering auto loans is Chase.
Chase Auto Loan Products
Chase offers a variety of auto loan products to meet different financing needs. Their main loan offerings include:
New Vehicle Loans
Chase provides loans to finance the purchase of a new car, truck, or SUV. Loan terms for new vehicle financing range from 24 to 72 months. Loan amounts generally range from a minimum of $5,000 up to the vehicle purchase price plus taxes, fees, and additional auto financing products like an extended warranty.
Used Vehicle Loans
For purchasing a used vehicle, Chase auto loans can range from 24 to 72 months as well. Loan amounts tend to be the same – a minimum of $5,000 up to the total cost of the used vehicle plus applicable taxes and fees. Chase will finance used vehicles up to 10 model years old.
Auto Refinance Loans
Chase Auto Refinance loans allow existing vehicle owners to refinance an existing auto loan from another lender into a new loan with potentially lower interest rates and monthly payments through Chase. Loan terms for refinancing range from 24 to 72 months.
Gap Insurance
Chaim’s Gap Insurance product is not technically a loan but rather an insurance add-on. It covers the difference between your vehicle’s current value and the amount you owe on the auto loan in the event the vehicle is totaled or stolen.
Understanding Interest Rates
One of the most important factors to consider when comparing auto loan offers is the interest rate. Rates for Chase auto loans are usually competitive with other top lenders and vary based on your credit profile and loan terms. Here are some general guidelines regarding Chase auto loan interest rates:
- Rates for new vehicle loans currently range from 2.49% to 24.99% APR. Used vehicle and refinance loans see rates between 2.49% to 25.99% APR.
- Longer loan terms like 72 months will often have higher rates than shorter 24-36 month loans. More of the vehicle’s total cost is being financed over a longer period.
- Top-tier credit (FICO scores 720+) will qualify for Chase’s lowest advertised rates, which are commonly 2.49%-4.99% APR.
- Fair or average credit in the 620-719 range may see rates of 5.24-10.24% APR.
- Subprime or poor credit under 620 could face significantly higher “buy rates” of 10.24%-24.99% APR.
- Adding on extras like GAP coverage or an extended warranty may raise your overall APR slightly.
Taking the time to improve your credit and choosing a reasonably short loan term can help ensure the best possible rate from Chase. Multiple hard inquiries also affect your credit scores, so rate shopping within a 14-45 day period counts as a single inquiry.
Applying for a Chase Auto Loan
The auto loan application process with Chase is relatively smooth and can largely be handled online or over the phone:
Step 1: Pre-Qualify
To get an idea of your potential financing terms before actually applying, Chase allows you to pre-qualify online. This does not result in a hard credit pull. You simply enter basic information like income, debt, and the vehicle’s expected purchase price.
Step 2: Initiate Application
When ready to formally apply, go to Chase.com or visit a local branch to start the online or paper application. You’ll provide details on yourself, the vehicle, loan amount requested, and down payment amount if any.
Step 3: Verify Identification and Income
Chase will need to verify your identity and proof of income through documents like recent pay stubs, tax returns, bank statements, etc. This ensures the information matches what was provided on the application.
Step 4: Credit Check
At this stage, Chase will perform a hard credit inquiry to review your full credit report and FICO scores from all three major bureaus. This inquiry will appear in your credit reports.
Step 5: Underwriting Review
Underwriters analyze your application, credit, and income/employment to determine your creditworthiness and qualify you for specific loan terms based on pre-set Chase lending guidelines and investors’ requirements.
Step 6: Loan Decision
If approved, you’ll receive your approval terms via email or letter within one business day typically. This sets out your APR, monthly payment amount, loan term and other key details. Then, it’s time to pick up your new ride!
Most new customer applications can be reviewed and approved within a few short business days. Competitive interest rates and smooth online tools help make Chase’s auto financing process quick and simple.
Alternatives to a Standard Chase Auto Loan
While the typical fixed-rate loan model works well for many, some vehicle buyers have additional needs or circumstances that align better with alternative financing structures:
Balloon Payment Loans
With this option, you make lower monthly payments but pay off the car’s remaining balance as a large “balloon” payment at the end of the 36-72 month term. This structure works if you plan to sell/trade in the car before full repayment.
Lease Instead of Buying
Chase partners with manufacturer financing arms like Ford Credit to offer competitive auto leasing. Instead of owning the car, you pay monthly for up to 36 months to drive it and then return it, often leaving no remaining balance owed. Leasing keeps your payments low, but you never build equity in the vehicle.
Personal Loan for Auto Financing
If your credit profile is too weak for a standard auto loan, Chase may alternatively offer an unsecured personal loan of up to $50,000 that can be used for vehicle purchases. Rates are higher than auto loans, but easier approval.
Having a discussion with a Chase lending specialist can help determine if one of these options better suits your financial circumstances or planned vehicle ownership period compared to a conventional fixed-rate auto loan. Alternatives are not always the right choice, but understanding them expands your options.
Factors Affecting Your Chase Auto Loan Terms
Many elements play into your actual financing terms, approval odds, and interest rate with Chase. Understanding what the lender examines most closely can help optimize your chances of securing the best possible deal. Major consideration factors include:
- Credit History & Scores – Primary indicator of your ability to repay debt. Long credit history and above 700 FICO scores are ideal.
- Income & Employment – Stable income sourced for at least 1-2 years increases trustworthiness versus temporary work. Salaried jobs carry less risk than commissions/self-employment.
- Debt-to-Income Ratio – Your monthly debt payments like mortgages, loans, etc. compared to pre-tax income. Keeping DTI below 30-36% shows financial discipline.
- Down Payment Amount – Larger down payments of 20% or more strengthen your application, but smaller deposits are still accepted.
- Loan Term – Shorter terms like 24-36 months keep your risk lower versus 60-72 month loans where more can change.
- Co-Signer – Adding a co-signer with excellent credit may help if your profile needs support. But co-signing also risks both parties’ credit if loans default.
- Verified Income Documentation – Strong proof of earnings like pay stubs, W-2s, or tax returns help verify stated income amounts on applications.
- Accurate Application – Mistakes or inconsistencies slow things down. Double-check that all details are true and correct.
Doing what you can to optimize the above factors enhances your competitive position when applying for a Chase auto loan. And a little rate shopping ensures you get the best deal possible.
Auto Loan Tips for the Application Process
There are also some additional auto financing best practices to follow when applying through Chase or any lender to help your approval odds and terms:
Have Your Paperwork Ready
Lenders need proof of income, identity, insurance, bill of sale estimated purchase price, etc. Gather documents early to speed up verification.
Know Your Desired Monthly Payment
Shop pre-approvals early and understand how loan amounts affect payment amounts, then work backward to budget comfortably.
Avoid Multiple Hard Credit Pulls
Every hard inquiry lowers scores slightly. Rate shop all in 2 weeks for it to count as one pull rather than many separate hits over time.
Make a Down Payment if Possible
Larger down payments reduce loan amounts and risk for the lender, plus keep your payment reasonable and interest cost lower overall.
Consider Co-Signer if Needed
Just be sure both parties understand the risks and responsibilities. Co-signing affects credit for years if the loan gets delinquent or charged off.
Negotiate the Final Price Before Financing
Get vehicle costs locked in before starting loans. Dealers sometimes see room for further discounts if you pay cash rather than finance.
Read All Loan Docs Carefully
Ensure terms like the loan amount, interest rate percentage, monthly payment amount, and total payments over the loan term are exactly as you expected and agreed to based on the approval terms. Don’t rush through signing important contracts. Ask clarifying questions if anything seems off before legally agreeing to repayment obligations. Having a full understanding of the documentation protects both you and the lender going forward.
Following these various auto loan best practices and optimizing your application for Chase’s underwriting criteria helps set you up for the strongest chance of approval on competitive terms.