7 Best Tesla Financing Rates in the Market

Tesla has led the pack in making electric cars for over ten years. This company also leads the push toward self-driving technology more than most other automakers. People who want quality electric vehicles that are attractive, fuel-efficient, and innovative love Teslas. 

What could be better than getting a new Tesla Model? Finding the best Tesla financing rates makes car shopping even better. So let’s look at the best Tesla loan interest rates you can get to buy one of these future-forward cars.

Understand the Best Tesla Loan Rates

Part of getting the best deal while shopping for a Tesla is finding the lowest Tesla auto loan rates. It’s not difficult to shop for the best rates since Tesla doesn’t sell cars as other automakers do. 

How Tesla Sells Cars

Tesla innovates its car design and technology, and they also innovate how to sell cars.  Instead of using franchise dealerships to sell Teslas, they sell directly to consumers. By cutting out the middleman, Tesla makes their cars more affordable for more people.

Dealerships that sell other cars, like Chevrolet, Ford, Toyota, and Hyundai, make a commission on each car sold. This commission incentivizes them to raise the price over what they must pay for the cars to make a bigger profit. 

You can still go to a Tesla showroom to see and test-drive the cars, but there’s no conflict of interest inherent in franchises. Tesla sells direct and eliminates this dealership markup. The savings get passed on to you, the car buyer. 

Tesla One-Stop Shopping

Tesla maintains control of car sales, and they handle servicing, financing, charging stations, and the route of the charging network. The simplicity of dealing with one company for everything appeals to many people. 

You can get financing through Tesla if you prefer. Financing directly through Tesla offers one of the best financing rates in the market while saving you the time and hassle of searching for the best rates yourself. 

This list of the best Tesla loan interest rates starts with Tesla because it’s a convenient choice, and the interest rate is low enough that some people might prefer going direct. 

See Related: Is It Possible to Get Tesla Free Supercharging?

What is the Tesla APR Rate?

How do you know you’re getting the best financing rate? First, it helps to understand the scope of the loan and what specific terms like APR mean. 

What Is APR?

APR stands for Annual Percentage Rate. The APR tells you how much interest you’ll pay over a year. A lower APR means you’ll pay less interest than a larger APR. 

Credit cards that charge an APR of 25% cost about one-quarter of your annual balance amount in interest. For instance, if you take out a loan or owe a credit card balance of $10,000 and your APR is 25%, it will accumulate approximately one-quarter of its balance in a year, or about $2,500. 

If the APR is 2.5%, the balance will accumulate about $250 instead. If the balance changes, the accrued interest goes up and down, too.  The simplest way to think of the APR is the amount it costs you to borrow. 

What are Loan Terms?

The terms of a loan are the repayment period and the APR. For example, many auto loans have a term of 24 to 72 months, or two to five years, which means you have that amount of time to repay the loan and the interest. The monthly payment amount depends on the loan’s time limit.

Bigger loans like mortgages sometimes have terms of 20 to 30 years of monthly payments to discharge the loan. Small personal loans can be for several months to a few years. 

The goal of smart shopping is to find a loan term long enough to manage the required monthly payments while getting the best Tesla car finance rate so the loan cost is less. 

You can do this in two ways:

• Finance the loan through Tesla
• Finance the loan on your own through a bank, credit union, or another lender

This list of banks and lenders that finance the purchase of a Tesla has today’s current interest rates, but these can change with market fluctuations. Always check current rates before making a decision.

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What credit score do you need to finance through Tesla?

Generally, a credit score of 700 or above is recommended to qualify for financing through Tesla. Some customers with lower scores may still be approved based on other factors such as income and debt-to-income ratio. Also, a higher credit score may result in more favorable loan terms, such as a lower interest rate.

Finance Through Tesla Directly

Financing through Tesla is a popular option. This choice might not always offer the lowest Tesla APR rate, but the rate is usually one of the lowest. Handling the financing at the time of purchase makes it a convenient choice for many people, so they don’t have to shop around for better rates. 

Tesla uses a few partner banks like Wells Fargo for financing. Typically, if you finance the purchase of a Tesla through Tesla directly, the finance rate starts at 2.49% APR for a loan up to 36 months. Some loans will be for 24 months, while getting a longer loan is possible, depending on the car and cost. 

Buyers with a good credit score will qualify for the lowest rates, so if your credit is less than ideal and you’re approved, your APR will probably be higher. A large down payment also makes you more likely to get a lower interest rate on the remaining balance.

If your credit score is 720 or higher and you can pay at least 20% down on the car, you will most likely get the 2.49% Tesla loan interest rate. You also have the option to lease a Tesla, so ask about a leasing option if that interests you. 

See Related: Top 10 EV Charging Station Stocks to Invest in Today

Why Look at Other Lenders for Tesla Auto Loans?

Since Tesla is the convenient choice and the low rate, why would you look at other lenders? Other lenders might offer:

• A lower APR
• A longer loan term

Some banks might beat Tesla’s 2.49% APR or let you pay back the loan for up to 72 or 84 months in some cases. Let’s look at some other major banks at the terms they offer. 

See Related: Is Tesla Powerwall Worth It? Our Tesla Powerwall review

The Best Tesla Financing Rates

It’s impossible to cover every bank that offers Tesla financing since many are small and local banks. You may be able to get an auto loan from your local bank or credit union, so it’s not necessary to apply through a large chain or digital bank. 

Most small banks require that you have a check or savings account and a history with the bank before they’ll grant a loan. Some of the best Tesla auto loan rates come through nationally known banks, so it’s worth looking at their offers even if you prefer your hometown bank. 

1. Wells Fargo – Best for the Lowest Rate

An auto loan through Wells Fargo can have a rate as low as 1.99% for a short-term loan if you have excellent credit and a loan of only about two years. 

Like with most banks, the Tesla financing APR goes up with the length of the loan. For example, a 72-month loan will always have a higher APR than a 12 or 24-month loan.

See Related: Best Credit Builder Loans

2. Bank of America – Best for Fair Credit

With over $2 trillion in assets, Bank of America is the second-largest bank in the United States. Its size means you might have a better chance at getting a loan through BoA than smaller banks. 

Bank of America doesn’t charge a fee for applying for a loan, and you can get a decision within 60 seconds in many cases.

The list of restrictions on auto loans is lengthy, such as no car over ten years old and no unapproved dealers. However, BoA will grant loans for Tesla purchases like they do with most large automotive dealerships. 

The Tesla financing rate from Bank of America starts at 2.24% for new cars and 2.59% for used vehicles that meet their criteria. The loan terms run from 12 to 75 months, with a minimum loan amount of $7,500 in most states. 

See Related: What is the Average Tesla Repair Costs? Full Budgeting Guide

3. US Bank – Best for Bigger Loans

US Bank offers Tesla lending rates and rates for any new or used vehicle as low as 2.59% to 5.49% with no down payment required. 

You can borrow up to 120% of the car’s value when you get a loan through US Bank. To get the best rate, you have to meet several restrictions. 

• The loan must be for $30,000 or more
• It must be at least 80% or less of the car’s value
• The car must be less than one year old
• The term must be 36 months or less
• You must use auto-pay
• Your credit score must be 800+

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4. LightStream – Best for Fewer Restrictions

Lightstream is an online lender offering unsecured loans to borrowers. There are no restrictions on the car you buy, and your loan can apply to new or used vehicles. 

Lightstream’s lowest Tesla lending rates start at 2.49%, the same as Tesla offers. You’ll need excellent credit and the willingness to sign up for auto-pay, or the rate will increase by .05%. 

Depending on the loan and your credit, the rates can go as high as 20.49%. They offer loans up to $100,000 and repayment terms of up to 84 months. 

They also don’t advertise a minimum credit score requirement. Like what you are hearing? Read our full Lightstream review.

See Related: How to Save for a Tesla Electric Vehicle [Steps to Follow]

5. Capital One – Best for Good Credit and Car Choice

Capital One offers personal loans, auto loans, and more. However, you must plan to buy a car that meets their age and value requirements from an auto dealer on their approved list.

Capital One’s Tesla financing rates start at 2.99%, higher than other banks on this list. You may be able to get a loan with lower credit than some other lenders require and longer payment terms in exchange for the higher APR. 

See Related: Are Personal Loans Bad? Here’s What You Should Know

6. Chase Bank – Best for Chase Bank Members and High Credit Scores

JP Morgan Chase is the biggest bank in the United States. Chase Bank offers financing for auto loans from dealers in their approved network, and Tesla is one of those. 

Chase Bank’s Tesla financing rates start around 3.49% for those with excellent credit. This rate is higher than other banks on this list, but Chase Bank doesn’t require a down payment. 

If you want to buy a car with a minimal down payment or none at all, some lenders won’t approve the loan. You may be able to get financing through Chase Bank without a down payment and pay a little more for the loan over time. 

If you have an account with Chase bank before applying for a loan, you may qualify for a rate closer to the 2.49% rate Tesla offers directly.

See Related: Tips for Buying a Used Tesla

7. Carvana – Best for Poor Credit

If you’ve set your heart on a Tesla but your credit isn’t perfect, online lender Carvana might be able to help. The Tesla financing rates at this online auto lender start at 3.90%, with 36 to 72 months terms. 

Carvana also loans as little as $1,000, unlike other lenders with bigger minimums. You must make at least $4,000 yearly with no active bankruptcies.  Remember that the lower your credit, the higher your Tesla financing APR and down payment will be. 

See Related: How Much Does It Cost to Charge a Tesla?

Credit Union Financing

Let’s look at a credit union’s vehicle and Tesla financing APR. If you have a local bank, you’ve been with for years or a credit union you like, you might be able to secure a cheaper loan with better terms through them. 

DuPage Credit Union is one of the 20 biggest credit unions in the United States, serving members since 1956. Their current vehicle rates, including Tesla auto loan rates, are as low as 1.49% APR on new and used cars and trucks. 

The largest credit union in the United States is the Navy Federal Credit Union. Navy Federal offers lending rates as low as 1.79% for auto loans for members in all US military branches. 

If you qualify to join a credit union in your area, check their loan rates and compare them to the big banks before you make a decision. 

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The Bottom Line

No matter which bank, credit union, or online lender you choose, a high credit score will help. No lender will grant you a loan with the best Tesla financing rates if your credit score is low. 

If you have an imperfect credit history, a bank or credit union with an established account will probably give you a better rate than a large bank you’ve never dealt with.

Tesla’s direct financing also comes through large banks like Wells Fargo and others, so the lowest rates will be similar whether you finance through Tesla directly or seek out the best Tesla lending rates yourself.

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