Those searching for a car loan in Alabama should have a credit score of at least 660. Consider offers with a low-interest rate and a 60-month term length. If you’re looking to get a car loan in Alabama,
Car insurance and loan super app
Jerry is here to walk you through the process.
We’ll cover each step of getting a loan in the Black Bear state—from finding the right lender to understanding how credit will affect your offers.
How to get a car loan in Alabama
A traditional loan is a great first step for establishing the ownership of a vehicle in Alabama. If you’re in a pinch (or don’t wish to pay upfront), a loan will stretch out a vehicle’s payment over a period of time. Loans can be acquired from any certified dealership, bank, or credit union.
When you take out a loan in Alabama, you can expect the following:
- A down payment (upfront payment worth at least 10% of the actual value)
- Settling on an interest rate and term-length (how long the loan will last) with your lender
- Monthly payments to pay off the loan principal (complete value owed to your lender)
- An interest rate based on your annual percentage rate (APR).
The unique loan you are given will result from numerous factors—such as the type of vehicle, the chosen term length, and your credit score. The table below demonstrates likely APR and monthly payments for car loans in Alabama.
Car Make | Average Annual Interest Rate | Average Monthly Payment |
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Think taking out a car loan is the right option for you? We’ve got the next steps.
Check your credit
You’ll want to check your credit score first. Optimal scores will be
660 or better. Good credit will open up better
interest rates reducing the amount you’ll pay over time. Those with above-average scores (700 or above) can qualify for interest rates as low as **3%**—way below the national average.
The following table displays average interest rates and monthly payments based on credit rating.
Loan Terms | Average Annual Interest Rate | Average Monthly Payment |
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Compare lenders
When shopping for a loan, it’s best to keep your options open. You may be hit with several convenient-sounding offers from your car dealer or even direct mail—but these options rarely give you the best deal.
Before locking yourself into an agreement, compare offers from at least three lenders. The most important factor will be what interest rate they offer you—but don’t ignore adjacent factors such as customer service and approval odds.
Choose your loan term
No step of the car loan process is passive. You’ll be able to negotiate how long you’ll be paying off the vehicle—or the loan term. According to the Alabama average, you can expect between 60 months and 72 months for your loan term.
Longer loan terms mean lower monthly payments. But those with long term lengths will end up paying more in interest. You should strive for a term no longer than 60 months if your budget can afford it.
This table presents how loan terms will affect your APR and monthly payments.
Credit Rating | Average Annual Interest Rate | Average Monthly Payment |
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Get preapproved
Getting preapproved for a car loan will always give you an advantage when negotiating a loan. Preapproval means you’ve already been certified for a competitive monthly rate according to your loan. With this power, lenders won’t be able to oversell you, and you can be confident that you’re getting a great deal.
Can you get a car loan in Alabama for a used car?
It’s possible to acquire a loan for a used vehicle in Alabama. When doing so, understand the following:
- Used car loans come with a higher interest rate (around 8%)
- Many lenders have age limits when approving used vehicle loans
- Those looking for a small used car loan may want to seek out loans from a credit union, as most banks have minimums.
If you’re curious about how age will affect a car’s ability to get a loan, use this table.
Car Year | Average Annual Interest Rate | Average Monthly Payment |
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Alabama car loan calculator
Now that you’re up to speed on car loan basics, choosing the right loan term, and how the type of car you offer will affect your rates you’re ready to put it all together. Jerry’s car loan calculator will be your final step in figuring out how much you should pay for a car loan in Alabama.
This tool won’t impact your actual agreement, but it can give you an advantage in knowing your worth! Use the averages below to better negotiate a fair deal between you and your lender.
Average Annual Interest Rate | Average Monthly Payment |
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How to find affordable car insurance in Alabama
Once you’re financed, it’s time to make sure your vehicle complies with
Alabama’s minimum car insurance laws—the best way to do so is by using
Jerry.
Jerry is a personal insurance broker that lives in your pocket. But don’t worry about buying tiny office furniture, Jerry is an app. Once you download Jerry, just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan.
Best of all, Jerry customers save an average of $887 a year on car insurance.
“I’ve shaved off at least $50 a month using
Jerry. For now, I chose only to pay for Alabama state minimums, but I am confident that with Jerry, I can upgrade or change my coverage at any time. The AI-integrated process is really intuitive, too!” —Fred D.
FAQs
What credit score is needed to buy a car in Alabama?
When shopping for a car loan, you should have a credit score of 660 or above. This will let you qualify for a good loan in Alabama—but you might still be able to find a lender willing to give loans for lower scores.
Will a bank give me a loan for a used car?
If the vehicle is decently new, you’ll likely be able to get a loan. Keep in mind that many banks place a minimum on monthly payments. If your used car loan is too small, it may be denied.