How Auto Loans Work When applying for an auto loan, the borrower approaches a lender, such as a bank, credit union, or dealership, to finance the vehicle. The lender evaluates the applicant's credit score, income, and debt-to-income ratio to determine the loan terms. The better the borrower's credit, the more favorable the loan terms, such as lower interest rates. In contrast, those w... https://www.reddit.com/r/financeonloans/