What is a good interest rate for a car loan? The answer depends on your credit score

What is a good interest rate for a car loan? The answer depends on your credit score

Business·2020-02-29 01:26

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Shop around to make sure you’re getting the best interest rate.

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The interest rate on your will depend largely on your credit score, and whether you’re buying a new or used vehicle.

The average APR for a borrower with (a score between 661 and 780) was 4.96% for a new car purchase, and 6.36% for a used car purchase, according to Experian data from 2019.

Shop around for an interest rate that beats the average, and compare offers from multiple lenders to find the best.

When shopping for a new (or new-to-you) car, one of your first considerations is probably how you’ll pay for it. If an auto loan is in your future, it’s worth doing your research on what kinds of interest rates are available to you.

Auto loan interest rates, or APR, can vary widely, but the biggest factor is your credit score. You’ll want to check your credit score before you begin the process – there are plenty of free tools to check your credit score online. If your credit score is low, you may pay quite a bit in interest. If possible, waiting to buy while you work on improving your credit could save a lot of money.

What factors influence auto loan interest rates?

Your auto loan’s interest rate will be determined by a few factors:

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