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.

Credit Rating

Car Make	Average Annual Interest Rate	Average Monthly Payment
ACURA	8.78	$364
ALFA ROMEO	8.86	$365
ASTON MARTIN	8.86	$365
AUDI	9.01	$366
BENTLEY	8.86	$365
BMW	9.6	$371
BUICK	8.9	$365
CADILLAC	9.24	$368
CHEVROLET	8.9	$365
CHRYSLER	9.28	$368
DODGE	9.05	$366
FERRARI	8.86	$365
FIAT	8.94	$365
FORD	8.9	$365
GENESIS	8.86	$365
GMC	8.82	$364
HONDA	8.62	$363
HYUNDAI	8.9	$365
INFINITI	9.05	$366
JEEP	8.62	$363
Jaguar	8.86	$365
KIA	9.17	$367
LAMBORGHINI	8.86	$365
LEXUS	8.82	$364
LINCOLN	9.01	$366
LOTUS	8.86	$365
Land Rover	8.86	$365
MERCEDES-BENZ	8.86	$365
MINI	8.86	$365
MITSUBISHI	9.05	$366
Maserati	8.86	$365
Mazda	8.86	$365
NISSAN	8.97	$366
POLESTAR	8.86	$365
PORSCHE	9.04	$366
RAM	8.9	$365
ROLLS-ROYCE	8.86	$365
Subaru	8.86	$365
TESLA	9.43	$369
TOYOTA	8.62	$363
VOLKSWAGEN	8.9	$365
VOLVO	8.66	$363

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.

Credit Rating

Loan Terms	Average Annual Interest Rate	Average Monthly Payment
24	12.06	$703
36	9.15	$474
48	8.58	$366
60	8.49	$304
72	8.83	$265

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
Fair	17.85	$423
Good	8.78	$363
Very Good	5.18	$341
Excellent	3.91	$333

MORE: How to calculate total interest paid on a car loan

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 Make

Car Year	Average Annual Interest Rate	Average Monthly Payment
2021	8	$307
2020	8.47	$312
2019	8.64	$312
2018	8.43	$310
2017	8.65	$312
2016	8.82	$313
2015	9.03	$315
2014	8.99	$383
2013	9.08	$384
2012	10.08	$515
2011	10.08	$515
2010	10.08	$515

MORE: What is a good interest rate on a car?

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.

Car Make

Credit Rating

Loan Terms

Loan Amount

Average Annual Interest Rate	Average Monthly Payment
8.93	$365

MORE: Alabama electric vehicle incentives

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.