December 3, 2023

Car Auto Finance

Car Auto Finance FOR Everyone

Which offers better auto loans?

Regions Bank and Credit Direct are auto lenders with an overlapping regional footprint. Regions Bank is a direct lender, while Credit Direct operates a loan marketplace, helping borrowers find and compare multiple unsecured loan options.

If you’re having trouble choosing between Credit Direct and Regions Bank, we’ll break down what you need to know.

Credit Direct vs. Regions Bank at a glance

Credit Direct and Regions Banks both help people buy vehicles, but their features and fees vary.

Bankrate score

3.8

3.7

Better for 

Loans offered

  • New and used car loans

  • Auto refinance loans

Loan amounts

$1,000-$40,000

$5,000-$125,000

APRs

5.99%-29.99%

6.49% -13.99%

Loan term lengths

12-60 months

Fees

Varies by lender

Not specified

Minimum credit score

Not specified

Not specified

State footprint

14 states

15 states

Time to funding

48-72 hours

Not specified

Autopay discount?

Not specified

Yes: 0.25%

Refinancing restrictions

N/A

Not specified

Credit Direct auto loans

Credit Direct doesn’t offer loans on its own. Instead, it operates a loan marketplace, helping connect borrowers to potential lenders and making it easy to compare multiple loan options.

Credit Direct is somewhat unusual: It doesn’t offer secured auto loans. Instead, it offers unsecured personal loans for borrowers to purchase a vehicle. The benefit of this is that it lets Credit Direct offer smaller loans than some competitors. You also don’t have to get approval for a specific vehicle and make sure it can secure the loan, which speeds up the process.

The drawback is that the lack of collateral means that personal loans are typically more expensive than auto loans. Rates will typically be higher and it may be harder to qualify for the loan. However, the company’s partner lenders often use underwriting methods that look at more than just your credit, which can help offset this.

Pros

  • The loan minimum of $1,000 is unusually small among auto lenders.

  • You can rate shop without a hard credit inquiry.

  • Credit Direct states borrowers with any credit score are welcome to apply.

  • These are unsecured loans, meaning your car isn’t at risk of repossession if you default.

Cons

  • Loans are available in fewer states than Regions Bank, with loans only available in AL, AZ, AR, CA, FL, IA, LA, MD, MI, MO, NC, OK, PA and TX.

  • The loan maximum of $40,000 is smaller than the average price of a new car — you may have to save up for a sizeable down payment.

  • You’ll have to round up a fair amount of documentation to apply for these loans.

  • Credit Direct’s maximum interest rate of nearly 30 percent is sky-high — it’s more than double the average rate paid by deep subprime borrowers on new car loans.

Regions Bank auto loans

Regions Bank is a direct lender, meaning you won’t get multiple offers from different lenders when you apply. However, unlike Credit Direct, Regions Bank offers traditional auto loans that are secured by the vehicle. This can make qualification easier and help keep rates lower than personal loan rates, especially for people with less than excellent credit.

A few other benefits of Regions Bank include its high loan maximum of $125,000 and the fact that it allows for loan refinancing, giving car owners whose credit has improved the chance to lower their interest rate to save money. Signing up for automatic payments from a Regions Bank Checking account offers additional savings thanks to a 0.25 percent autopay discount.

Pros

  • While Regions Bank’s APRs aren’t the lowest available on the market, its starting rate of 6.49 percent is close to the national average.

  • You can land a 0.25% rate discount if you set up autopay.

  • The maximum amount of $125,000 is near the top for auto lenders, with only a few offering higher amounts.

  • Regions Bank offers discounted rates for qualifying electric vehicle loans, though its website doesn’t give specifics about how much of a discount

  • All Regions Bank auto loans come with free gap insurance, which most lenders charge for.

Cons

  • You won’t receive multiple loan offers to compare, as Regions Bank is a direct lender.

  • You can’t prequalify for these loans. The only way to check eligibility and rates is to submit a full loan application and accept a hard credit check.

  • To refinance, your car must be no more than 7 years old and have no more than 90,000 miles. Many other lenders accept cars up to 10 years and 100,000 miles.

  • Regions Bank serves only 15 states, partially overlapping with Credit Direct’s footprint: AL, AR, FL, GA, IL, IN, IA, KY, LA, MS, MO, NC, SC, TN and TX.

How to choose between Credit Direct and Regions Bank

Credit Direct and Regions Bank are both good lenders, but fit different circumstances. Credit Direct may be better for people who want small loans or to make comparison shopping easier. Regions Bank offers a more traditional lending experience.

Choose Credit Direct if you want a small loan or to make shopping around easy

Credit Direct offers loans for as little as $1,000, making it a better choice for borrowers who only need a small amount to help them buy a car. It also makes prequalifying risk-free and shopping for a loan easy, thanks to the multiple loan offers that you receive.

However, the fact that it connects you to personal loans rather than auto loans does have drawbacks. Rates far exceed the rates other lenders offer, especially for those with fair or poor credit. According to Bankrate data, even those with scores under 640 can get auto loan rates under 10 percent from many lenders. However, Credit Direct charges as much as 29.99 percent for its least-qualified borrowers.

Choose Regions Bank if you bank with Regions or need a large loan

Regions Bank is a more traditional auto lender, offering loans secured by the value of the vehicle you buy. If you aren’t relying on Credit Direct’s unusual underwriting process, Regions Bank may be a solid choice.

This is especially true if you have fair or poor credit — though it’s unclear if these borrowers can qualify with Regions Bank. Regions charges a maximum of 13.99 percent APR, less than half of what Credit Direct charges. It also offers much larger loans, making it a solid option if you want to buy a high-end vehicle.

Compare more lenders before applying

When you’re thinking about buying or refinancing a car, it’s essential to compare multiple loan options. Look for the lender with the best interest rates and fees and see what offers you qualify for. With a bit of legwork, you can land a good deal that will save you money.

link