RoadLoans Auto Loan Review

RoadLoans is a subsidiary of Santander Consumer USA that offers financing for new and used cars through dealers, as well as auto loan refinancing direct to applicants. When you’re comparing loan offers, you may want to consider initiating an online application with this company to see its offers.

About RoadLoans

The lender, based in Fort Worth, Texas, has been originating auto loans for consumers since 1997. You can apply on the company’s website, get prequalified, and shop for your next vehicle with financing in hand. Its pre-qualification is good for 30 days if you qualify for a loan. RoadLoans promises “instant” decisions, but it’s worth noting that checking rates with the lender will mean a hard credit inquiry. However, it should not impact your credit to complete multiple auto loan applications any more than it does to apply to one, as long as you do so within a two-week window.

Like most auto lenders, RoadLoans bases its decision about whether to approve your application and how much money it might be willing to lend you on your FICO credit score, your income level and whether you can verify your identity.  RoadLoans does consider applicants with bad credit, previous bankruptcies or no credit history.

If you’re approved, the funds may be available in as little as one business day. Preapproval lets you shop at various car dealerships as if you have cash in hand.

RoadLoans: At a glance

• Loan amounts between $5,000 and $75,000. Minimum amounts are higher in certain states.
• Not available in certain states including Alaska, Hawaii, New Hampshire, Mississippi and Nevada. There are further restrictions on states where cashback refinancing is available.

RoadLoans offers financing for new and used cars and two types of refinancing: the traditional method and what it calls cashback refinancing, when you refinance your auto loan for more than you owe. RoadLoans lists several advantages to cashback refinancing, like a cash sum up to $5,000 to be used to pay off other debt. However, there are several disadvantages, too — you could wind up “underwater” on your car, owing more than it is worth.

Notably, cashback refinancing is not available in Alaska, Arkansas, Connecticut, Hawaii, Kansas, Kentucky, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Pennsylvania, Virginia or Washington, D.C.

Although RoadLoans says that it offers loans to consumers with credit issues, it does not list a minimum credit score or ranges for rates and terms on its website. “Bad” credit, in this case, may be scores around 600. However, the cost of credit for those with less-than-stellar credit scores may be high: the average APR for Santander loans, including those made through dealers, was 17.2% as of March 31, 2019.

Loan amounts range between $5,000 and $75,000, though minimum amounts are higher in Arizona ($10,001), California ($6,000) and Massachusetts ($6,001). If you decide to apply and RoadLoans approves you, its loan terms are included with the offer.

No matter the condition of your credit or your income level, it’s important to shop around to get the best possible interest rate and terms on your auto loan. Comparing rates from multiple lenders is the only way to know for sure that you aren’t paying unnecessarily high interest rates.

How to apply for financing

Applicants ages 18 years or older may apply online, free. A co-borrower is allowed, which may improve your chances of approval. RoadLoans will ask whether you’d like to purchase from a dealer, refinance your current auto loan or apply for a cashback refinance. The RoadLoans application requires your:

• Email address
• Full legal name
• Phone number
• Home address
• Date of birth
• Social Security number
• Annual income
• Any additional income you receive

RoadLoans does not offer refinancing to active-duty service members or their immediate family members.

The fine print

• RoadLoans doesn’t work with every dealership.
• Vehicles must meet certain eligibility criteria.
• RoadLoans does not finance trailers, recreational vehicles, commercial vehicles or motorcycles.

RoadLoans offers fast decisions on an auto loan you could take to the dealership, but not any dealership. The company provides applicants with a list of preferred dealerships where they can choose a vehicle with a price that fits within the loan offer’s parameters. If you don’t see one in your area, you may use your preapproved loan at any franchised dealer, but not at an independent dealer unless it is part of RoadLoans’ network.

Vehicles must also fall within certain parameters. Vehicles to be financed must be nine years old or newer, have less than 120,000 miles, and have clean titles. Vehicles to be refinanced must be seven years or newer with fewer than 105,000 miles. You may only refinance auto loans from companies other than RoadLoans — RoadLoans won’t refinance its own loans.

Pros and cons of financing through RoadLoans

Every auto loan company has pros and cons that affect how appropriate it is for your specific situation. It’s important to research multiple companies and get multiple loan offers so you can compare your options and make sure you can get terms you are comfortable with, including a payment that fits into your budget.

Poor credit

It is possible to get a bad credit auto loan, even with a bankruptcy in your past. Lenders issued 379,100 auto loans to “subprime” car buyers with credit scores below 620 during the first quarter of 2019, according to Equifax. The average loan amount for these subprime accounts was $18,934 during January 2019.

Improved credit

If your credit has improved since taking out your original auto loan, refinancing may help you save money. You may be eligible for a lower interest rate, which will reduce the total amount you pay for your vehicle over the life of your loan so long as the term remains the same. You could also refinance for a longer loan term (hopefully at a lower interest rate) and also save money on your monthly payment, but the longer your term, the more you’ll pay overall in interest.

Here are some specifics about the pros and cons of financing a vehicle through RoadLoans:

Highlights of RoadLoans auto loans

• No fees — There is no application or early payoff fee.
• Preapproval — You can get preapproved for a loan before you go car shopping. There is no obligation to “activate” the loan. Pre-approval is good for 30 days.
• All credit types welcome — RoadLoans may approve all types of credit, including subprime, those with no credit, and those who have been through bankruptcy.
• Quick approval — “Instant” approval in many cases after filling out a one-page online application.
• Delay a payment — Depending on how your loan payment due date falls on the calendar, you may be able to delay your first payment up to 60 days.

Lowlights of RoadLoans auto loans

• Limited information — You must fill out an application in order to see rates and terms, which will involve a hard credit pull.
• Limited dealerships — If you get approved, your offer will include a list of dealerships in your area that accept RoadLoans’ financing. Although there are 14,000 dealers in its network, you are restricted to shopping at these dealerships or a franchised dealer.
• Poor reviews — Although the Better Business Bureau gives RoadLoans an A- rating, the lender only received 1 out of 5 stars based on 100 customer reviews.
• Legal issues — Santander, RoadLoans’ parent company, has been cited for overcharging customers, including auto loan customers who had their vehicles repossessed. In November 2018, Santander settled for nearly $11.8 million in restitution and fees with the Consumer Financial Protection Bureau after the agency said Santander improperly disclosed terms and conditions of its auto loan add-on product and loan extensions.

The bottom line: Who is a RoadLoans auto loan best for?

RoadLoans describes itself as a subprime lender that will finance consumers with bad credit, no credit, and those who have been through a bankruptcy. It take other factors into consideration like the value of the car, your down payment, whether you have a cosigner with good credit, and your income. This can help borrowers with credit challenges get approved.

Those with credit scores above the mid-600s may get a better deal at their local credit union or with a bank they already work with regularly. If you are shopping for a new car and you have good credit, you may get better terms by taking advantage of dealer incentives, rebates, and financing offers.

The rates and fees mentioned in this article are accurate as of the date of publishing.