Bank of America auto loan review: Competitive interest rates and no upfront fee

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In a Nutshell

A Bank of America auto loan could be a strong option if you’re a Preferred Rewards client with the bank or can qualify for the bank’s competitive interest rates. But Bank of America doesn’t offer the ability to get prequalified to view estimated rates, and the lender is selective about which dealerships you can buy from.

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Pros Cons
Competitive rates Many independent dealerships are ineligible
Interest rate discount for Preferred Rewards members Vehicle must be worth at least $6,000
No application fee or prepayment penalty No prequalification option

What you need to know about Bank of America auto loans

If you’re considering applying for a Bank of America auto loan, here are some features that stand out.

Several car loan options

Bank of America offers a range of auto loan options, depending on what you’re trying to do.

Dealership limitations

If you’re planning to buy from a dealership, take note that only franchise dealerships, such as Ford, Honda, Chrysler, General Motors and others, are eligible. You may also purchase your vehicle from an approved independent dealership, which includes CarMax, Hertz Car Sales, Enterprise Car Sales and Carvana.

If you want to buy from a different independent dealer, you’ll need to find another lender.

Discounts for eligible Bank of America customers

If you’re a Preferred Rewards client, you can qualify for an interest rate discount of 0.25% to 0.50% on top of Bank of America’s already competitive interest rates.

But to qualify as a Preferred Rewards client, you need an eligible personal checking account with the bank and a three-month average combined balance of $20,000 or more in qualifying Bank of America, Merrill Edge or Merrill Lynch accounts.

No prequalification option

Many auto lenders allow borrowers to get prequalified to get an idea of what terms they might be eligible for. This prequalification typically requires only a soft credit inquiry, which won’t hurt your credit scores.

With Bank of America, you’ll need to officially apply with a hard credit inquiry to see what rate you qualify for. That said, you might be able to get a decision in as little as one minute, and the rate is locked in for 30 days, which could give you time to find the right car.

A closer look at Bank of America auto loans

Here are some other things to know as you compare Bank of America with other auto lenders.

  • There’s no application fee or prepayment penalty, but you may incur a loan fee if you live in Indiana or Ohio.
  • Loans are available in all 50 states and the District of Columbia.
  • Your vehicle must not be older than 10 calendar years or have more than 125,000 miles or more on the odometer.
  • You can’t use the car for commercial or business purposes.
  • The minimum loan amount is $7,500 ($8,000 in Minnesota), and the minimum vehicle value is $6,000.
  • Repayment terms range from 12 to 75 months, but you’ll only be able to choose a 48-, 60- or 72-month loan term on the online application.

Is a Bank of America auto loan the right fit for you?

A Bank of America auto loan could be a great option if you’re a Preferred Rewards client with the bank and can take advantage of the interest rate discount. Even if you’re not, it could be a good fit if the car you’re planning to buy meets the lender’s standards and you’re looking for a competitive interest rate.

Keep in mind that Bank of America’s starting annual percentage rates for auto loans are only available to those with what the bank considers excellent credit. Your APR may be higher, based on factors including your credit history, loan amount, loan term and state of residence.

Since it comes with no prepayment penalty, a Bank of America auto loan is worth considering if you’re thinking about paying off the loan quickly.

How to apply for a loan from Bank of America

You can choose where you apply — online, over the phone or at one of the bank’s branches. And you don’t need the vehicle information to apply.

Here’s how you apply online.

  1. Click the “Apply Now” button on the Bank of America auto loans page.
  2. Check the box to prefill your application with your information if you’re an existing Bank of America customer.
  3. Enter your desired loan amount and loan term, along with personal information, including your address, Social Security number and date of birth. You’ll also need to provide employment and income information, and specify whether you have a co-applicant.
  4. Carefully read the terms and conditions. If you accept them, you can review your application one more time and submit it.

Lender alternatives to consider

Bank of America auto loans offer competitive rates, making them worth considering if the vehicle you’re looking at meets the lender’s requirements.

If you’re not sure that a Bank of America auto loan is right for you, here is another option to consider.

  • Capital One auto loan: This lender is an option for people who want the ability to apply for prequalification and see an estimated loan offer without a hard credit inquiry.
  • Wells Fargo auto loan: This lender might be good for people who want to take out a smaller auto loan.