Wells Fargo vs. Credit Direct: Which offers better auto loans?

Established in 1852, Wells Fargo is a brick-and-mortar bank offering a variety of personal, small business and corporate banking solutions. Credit Direct is an online personal loan marketplace that matches borrowers with lenders in its network.

Wells Fargo caters to borrowers with good or excellent credit scores, while Credit Direct is better for borrowers who want to shop around for the best rates.

Wells Fargo vs. Credit Direct at a glance

Both Wells Fargo and Credit Direct provide new and used car loans. However, Wells Fargo offers secured auto loans through partner dealerships. Credit Direct matches borrowers with unsecured auto loans that can be used at any dealership.

Best for borrowers with excellent credit

Wells Fargo

Rating: 3.2 stars out of 5

3.2

Learn more in our Bankrate review

• Bankrate’s view

  Wells Fargo’s website doesn’t share information on auto loan eligibility guidelines or terms. Still, it could be a suitable funding option if you have good or excellent credit and prefer in-person support at a physical branch.

  However, loans are only available through Wells Fargo’s nearly 11,000 partner dealerships. There’s no way to get prequalified or apply online. The upside is its loans are free of application, origination and prepayment penalties.

• Pros and cons

  

  Pros

  • Many physical branches: With over 4,900 retail banking branches nationwide, you can easily manage your auto loan if you prefer in-person support.
  • Fast funding times: Wells Fargo funds your loan and sends it to the dealership immediately following approval.
  • No added fees: You won’t pay loan origination fees or early repayment penalties on your auto loan. While these fees are becoming less common, some lenders still charge them.

  

  Cons

  • No online application: There’s no way to apply for auto loan financing online or at a branch. Loans are only available through partner dealerships.
  • Online prequalification unavailable: Wells Fargo does not offer an online prequalification tool. You’ll need to formally apply and take a temporary credit hit to see your possible rates.
  • Limited online disclosures: Loan terms and rates for auto loans are not published on the website, making comparison shopping before you get to the dealership impossible.

Best for rate shopping

Credit direct

Rating: 4 stars out of 5

4

Learn more in our Bankrate review

• Bankrate’s view

  Credit Direct is an online platform that simplifies getting the funding you need for your next car purchase. It originates loans directly and through partners in its network. You can take out an unsecured personal loan of up to $40,000 with a 12- to 60-month term.

  Unlike most lenders, Credit Direct and its lending partners offer loans for as little as $1,000. The starting APR (annual percentage rate) is also competitive — especially among unsecured loans — and you can get prequalified online to view potential loan terms.

  Credit Direct is also worth considering if you want to own your car outright since the vehicle isn’t used as collateral to secure the loan.

• Pros and cons

  

  Pros

  • Flexible eligibility guidelines: Credit Direct sees you as more than just a credit score and could approve you even if your score is lower.
  • Small minimum loan amount: You can borrow as little as $1,000 to purchase a new or used vehicle. That’s especially useful if you want to buy a very old car or a car with a salvage title, which many lenders reject.
  • Prequalification available: You can view loan offers without impacting your credit score, something you can’t do with Wells Fargo.

  

  Cons

  • Not available nationwide: Credit Direct only serves customers in 14 states versus the entire 50-state serviced region offered by Wells Fargo.
  • Low loan limit: Loans are capped at $40,000, but the average new car price exceeds $48,000. If you’re buying a new car, you may need to save up for a down payment to cover the difference.
  • Documentation requirements: Borrowers are required to provide a recent W2, pay stubs and bank statements to secure financing. While all lenders require proof of income, requiring all of these documents is more unusual.

How to choose between Wells Fargo and Credit Direct

Wells Fargo and Credit Direct could both work for borrowers with excellent credit. Credit Direct is better if you have past credit challenges or want to comparison shop for a competitive auto loan.

Choose Wells Fargo if you have a strong credit score

Wells Fargo could be worth considering if you have a strong credit rating. You’ll have the luxury of managing your loan in a branch once it’s funded.

You may also want to choose Wells Fargo if you want a traditional auto loan. While an unsecured personal loan can benefit some, secured auto loans often result in lower interest rates.

Choose Credit Direct if you want to shop around for the best deal

You don’t get to view loan offers with Wells Fargo until you pick out your ride and apply for financing at the dealership. Credit Direct lets you check your rate in minutes directly from its website without hurting your credit score.

Like most banks, Wells Fargo likely reserves its best rates for borrowers with excellent credit. A lower credit score could make it harder to qualify for a loan. However, Credit Direct states borrowers with all credit scores are welcome to apply. But if you have bad credit, your loan’s interest rate may be on the high end of the range.

Compare more lenders before applying

When you’re ready to apply for auto financing, Wells Fargo and Credit Direct aren’t the only options to keep in mind. Request quotes from three or more additional lenders and compare auto loan rates, borrowing costs and other terms. Also, explore other lenders if you want to refinance your current loan. You may find a lender beyond these two options works better for your unique financial situation.