M&T Bank auto loan review: Limited availability and possible prepayment penalties

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In a Nutshell

An M&T auto loan may be a good option if you only want to borrow a small amount or if you’re already a bank customer and can take advantage of the relationship discount. But if you don’t live in one of the areas where the bank offers auto loans, you’ll need to find another lender.

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Pros Cons
Range of loan options Limited availability
Relationship discount for having an M&T bank account No ability to apply for prequalification (according to a customer service rep)
Borrow as little as $2,000 Must select a car before applying online
  Potential for fees

What you need to know about M&T Bank auto loans

M&T is a regional bank that offers banking, lending, insurance and investment products, including credit cards and personal loans. Founded in Buffalo, New York, in 1856, M&T serves people in Washington, D.C., and eight states along the East Coast.

If you’re considering applying for an M&T Bank auto loan, here are some features that stand out.

Range of car loan options

M&T Bank offers several auto loan options to meet a range of auto finance goals.

Competitive loan rates and customer rate discounts

M&T Bank’s starting annual percentage rate, or APR, is competitive with what some other banks offer. But to qualify for the lender’s lowest available APR, you must …

  • Choose a loan term of 63 months or less
  • Plan to buy a vehicle with a model year of 2018 or newer
  • Have or open an M&T MyChoice Premium or Power Checking account
  • Enroll in automatic payments from any M&T checking account
  • Meet the bank’s credit standards — M&T notes on its website that your APR is based on your credit profile, but doesn’t specify what credit scores you need to qualify for the lowest APR
  • Have a good deposit relationship with the bank

Must select your car before applying online

According to a customer service representative, if you want to apply for a new- or used-car loan through the M&T Bank website, you must select a vehicle first. As part of the online application, you’ll need to provide the car’s year, make, model, mileage and vehicle identification number, or VIN.

A closer look at M&T auto loans

Here are some more details that will help you compare M&T Bank with other auto lenders.

  • M&T Bank auto loans are available only to residents of Connecticut, Delaware, the District of Columbia, Maryland, New Jersey, New York, Pennsylvania, Virginia and West Virginia.
  • M&T offers loan terms of up to 84 months — but remember that while a longer loan term may mean lower monthly payments, you’ll end up paying more interest on the loan.
  • You must be 18 years or older and a legal U.S. resident to apply.
  • M&T Bank offers auto loans in amounts as low as $2,000.
  • The bank allows joint applicants. Keep in mind that your joint applicant will be held just as responsible as you are for paying back the loan.
  • Whether the bank charges fees, like a loan origination fee or prepayment penalty, isn’t clear from its website.

Is an M&T auto loan right for you?

If you live within the bank’s service area, are an existing customer and qualify for its low starting APR, an M&T Bank auto loan might be a good option. This way you can keep your banking and borrowing under one roof.

M&T Bank could also be ideal if you only need to borrow a small amount. Some auto loan lenders have higher minimum amounts — typically $4,000 or more.

But if you plan to pay off your car loan early, you might want to steer clear of M&T if an auto loan from the lender comes with a prepayment penalty.

M&T Bank may also not be your best bet if you want to shop around and compare loan offers before settling on a lender. The bank doesn’t allow you to apply for prequalification online to see what rate and terms you might qualify for. And if you don’t know what car you want when you apply, you may not find a loan option with M&T.

How to apply for a loan from M&T Bank

To apply for an auto loan with M&T Bank, you must be at least 18 years old and you must be a U.S. resident. You’ll likely need to have your vehicle already picked out as well. 

You can apply for an auto loan online, over the phone or at one of the bank’s branches.

Before you apply for an auto loan with M&T Bank,  it’s a good idea to check your credit and compare other loan offers. Understanding your credit can help set expectations — in general, lower credit scores will result in higher interest rates. And shopping around can help you find the best loan rate and terms for your needs. Read our article on how to get a car loan to learn more about the process.

Not sure if M&T Bank is right for you? Consider these alternatives.

If you don’t live in an area M&T Bank serves, or you aren’t sure if an M&T auto loan is right for you, here are some other lenders to consider.

  • Capital One AutoCapital One could be an ideal option for someone who wants the ability to apply for prequalification and see an estimated loan offer without a hard credit inquiry.
  • Bank of America auto loan: Bank of America might be a good option if you don’t want to pay a prepayment penalty.

About the author: Ashley Chorpenning is a personal finance writer and content creator. In addition to being a contributing writer at Credit Karma, she writes for solo entrepreneurs and Fortune 500 compani… Read more.