Auto Loan Rates in Minnesota 2026 — Best Rates & Options

📋 Reviewed by WiseIQ Editorial Team · Updated April 2026 · Editorially independent

Navigating the auto loan landscape in Minnesota requires understanding both national trends and state-specific nuances. From competitive interest rates offered by local credit unions to the impact of Minnesota's sales tax and registration fees, securing the best financing for your vehicle involves careful consideration. WiseIQ provides comprehensive insights into current auto loan rates, top lenders, and essential financial data to help you make an informed decision for your next car purchase in the North Star State.

Average Used Car APR

~5.24%

Average Credit Score

742

Minnesota Financial Snapshot

WISEIQ TOP PICK

PERSONAL LOANS

Upstart

Best for fair & thin credit · AI-powered approval

APR RANGE

7.80%–35.99%

LOAN AMOUNT

$1K–$50K

MIN. CREDIT

300

✓ No prepayment penalty ✓ Funds in 1 business day ✓ Soft pull pre-qualification ✓ Considers education & job history

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No credit score impact

WiseIQ may earn a referral fee if you apply through this link. Rates shown are representative and may vary. See Upstart's website for full terms.

Auto Loans in Minnesota: What You Need to Know

Minnesota, known as the Land of 10,000 Lakes, has a population of 5.7M with a median household income of approximately $77,000. The current unemployment rate stands at 2.8%, which lenders consider when evaluating applications from Minnesota residents.

5.7M

Population

$77,000

Median Income

2.8%

Unemployment

Major financial hub: Minneapolis is the primary financial center for Minnesota residents, with access to both national and regional lenders.

Median Household Income

$89,062

Average Credit Score

742

Auto Sales Tax

6.875%

Top Auto Loan Lenders in Minnesota

Affinity Plus Federal Credit Union

Local Credit Union

APR: 4.74% - 5.74%

Key Benefit: Competitive rates for new and used vehicles with flexible terms.

Low rates for well-qualified borrowers
Terms up to 84 months available
Financing up to 125% of vehicle value

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Royal Credit Union

Regional Credit Union

APR: 4.54% - 6.99%

Key Benefit: Excellent rates for newer vehicles and a wide range of terms.

Very competitive rates for 2023 & newer models
Flexible terms to fit various budgets
Fast loan decisions

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Minnco Credit Union

Local Credit Union

APR: ~4.49% - 4.74%

Key Benefit: Strong local presence with personalized service and good rates.

Competitive rates for various terms
Community-focused lending
Personalized member service

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Blaze Credit Union

Local Credit Union

APR: ~4.49%

Key Benefit: Quick loan decisions and competitive rates for new and used vehicles.

Answers within 2 business hours
Minimum amount financed is $5,000
Other discounts and offers may apply

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Magnifi Financial

Local Credit Union

APR: 3.79% - 6.99%

Key Benefit: Diverse rate options based on vehicle year, offering flexibility.

Rates as low as 3.79% for newer vehicles
Flexible terms available
Local Minnesota lender

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Minnesota Auto Loan Rates Comparison

Lender	Vehicle Type/Year	Term (Months)	APR (as low as)	Est. Monthly Payment per $1,000
Affinity Plus FCU	New Auto (2025-2026)	36	4.74%	$29.85
Affinity Plus FCU	New Auto (2025-2026)	60	4.99%	$18.87
Affinity Plus FCU	Used Auto (2020-2025)	48	4.74%	$22.91
Royal Credit Union	Newer Vehicle (2023+)	36	4.94%	$29.94
Royal Credit Union	Newer Vehicle (2023+)	75	5.84%	$15.95
Royal Credit Union	Used Vehicle (2016-2022)	48	5.99%	$23.41
Minnco Credit Union	New/Used Auto	48	4.49%	$22.80
Magnifi Financial	Newer Vehicle (2022+)	36	3.79%	$29.48

How to Choose the Best Auto Loan in Minnesota

1. Compare Offers from Multiple Lenders

Don't settle for the first offer you receive. Shop around and compare rates from banks, credit unions, and online lenders. Credit unions often provide highly competitive rates to their members.

2. Understand the Impact of Your Credit Score

A higher credit score typically qualifies you for lower interest rates. In Minnesota, the average credit score is 742, which is considered good. If your score is lower, consider improving it before applying or explore options for bad credit auto loans.

3. Factor in State-Specific Costs

Remember to account for Minnesota's 6.875% auto sales tax and varying registration fees based on your vehicle's value and age. These costs can significantly impact your total vehicle expense.

4. Consider Loan Term and Monthly Payments

While longer loan terms can lead to lower monthly payments, they often result in paying more interest over the life of the loan. Balance your budget with the total cost of the loan to find the right term for you.

Frequently Asked Questions About Auto Loans in Minnesota

What is the average auto loan interest rate in Minnesota?

Average auto loan interest rates in Minnesota can vary based on factors like credit score, loan term, and whether the vehicle is new or used. Generally, new car APRs can range from 4.5% to 5.5%, while used car APRs might be slightly higher, from 5% to 7%. Credit unions often offer some of the most competitive rates.

How does my credit score affect my auto loan rate in Minnesota?

Your credit score is a significant factor in determining your auto loan interest rate. With Minnesota's average credit score being around 742, borrowers with excellent credit (720+) can expect to qualify for the lowest rates. A lower credit score may result in a higher APR, as lenders perceive a greater risk.

What are the auto sales tax and registration fees in Minnesota?

Minnesota has a state sales tax of 6.875% on vehicle purchases, effective July 1, 2023. Vehicle registration fees are calculated based on the vehicle's value and age, with newer and more expensive vehicles incurring higher initial fees. There's also a title fee, which was recently increased to $164.50.

Can I get an auto loan with bad credit in Minnesota?

Yes, it is possible to get an auto loan with bad credit in Minnesota, though you may face higher interest rates. Some lenders specialize in bad credit auto loans, and credit unions may also offer more flexible options. It's advisable to compare offers and understand all terms before committing.

Should I get a new or used car loan in Minnesota?

The choice between a new or used car loan depends on your budget and needs. New car loans typically have lower interest rates but higher principal amounts. Used car loans might have slightly higher rates but a lower overall vehicle cost. Consider the total cost of ownership, including depreciation, insurance, and maintenance, for both options.

What to Watch Out For in Minnesota

⚠

Minnesota's Consumer Small Loan Act protects borrowers

Minnesota requires personal loan lenders to be licensed under the Consumer Small Loan Act. The Minnesota Department of Commerce (commerce.mn.gov) maintains a license lookup. Unlicensed lenders cannot legally collect debt in Minnesota.

⚠

Minneapolis-area borrowers: compare credit union rates first

Minnesota has an exceptionally strong credit union culture. Affinity Plus Federal Credit Union, Wings Financial Credit Union, and Hiway Credit Union all offer competitive personal loan rates for members. Compare their offers against Upstart.

⚠

Watch for high-rate loans targeting Minnesota's immigrant communities

Minnesota's large Somali, Hmong, and Latino communities are sometimes targeted by high-rate lenders. Licensed lenders like Upstart are required to provide disclosures in plain language and cannot discriminate based on national origin.

How to Apply for a Personal Loan in Minnesota

Check your rate online — Minnesota residents qualify for competitive rates

Minnesota has the highest average credit score of any state we cover (733). Apply at Upstart.com for a rate estimate in 5 minutes. The initial check is a soft pull.

Compare against Minnesota credit unions

Affinity Plus and Wings Financial serve Minnesota residents statewide. Their rates are often competitive with or better than online lenders for members with good credit.

Submit your Minnesota ID and income documentation

Provide your Minnesota driver's license or state ID, Social Security number, and income documentation.

Receive funds in 1 business day

After signing, Upstart deposits funds to your Minnesota bank account within 1 business day.

Frequently Asked Questions

Why does Minnesota have the highest average credit score?

Minnesota consistently ranks among the top states for average credit score (733 vs. national average of 690). This is attributed to Minnesota's strong economy, low unemployment, high education levels, and cultural emphasis on financial responsibility. This means Minnesota residents typically qualify for the best personal loan rates available.

What credit score do I need for a personal loan in Minnesota?

Minnesota's average credit score is 733. Most lenders require 620+. With Minnesota's high average scores, many residents qualify for premium rates (below 10% APR) from lenders like SoFi, LightStream, or Marcus. Upstart accepts scores as low as 300.

What are the best personal loan lenders in Minneapolis?

For Minneapolis residents: Upstart (best for all credit types), SoFi (best for 700+ scores), Affinity Plus Federal Credit Union (best for members), and LightStream (best for home improvement). Affinity Plus is particularly strong for Minnesota residents.

Can I get a personal loan in Minnesota with no credit history?

Yes. Upstart is the best option for Minnesota borrowers with no credit history because it uses AI underwriting that considers education and employment history. Minnesota residents with college degrees and stable employment often qualify even with thin credit files.

Are personal loans from Minnesota credit unions better than online lenders?

For members with good credit (700+), Minnesota credit unions often offer rates comparable to or better than online lenders. For borrowers with fair or bad credit, online lenders like Upstart typically offer better rates because they use more sophisticated underwriting.