Car Loan in Indiana 2023
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To be approved for a car loan in Indiana, you’re going to need a credit score of at least 660 or higher. Set your sights on a loan with low-interest rates and a shorter term length, ideally no more than 60 months.
Sometimes, car loans can be difficult to understand, but they don’t need to be—that’s why the car insurance broker and comparison shopping app Jerry will demystify car loans and tell you everything you need to know in order secure one in the Hoosier State.
Jerry will walk you through the steps of getting a car loan, share insight into comparing lenders, and explain how your credit score impacts your ability to secure a favorable car loan.
How to get a car loan in Indiana
The easiest way to get yourself a new set of wheels in Indiana is with a car loan. Of course, if you’ve got plenty of cash on hand to buy a car outright, more power to you. But if not, a loan with low-interest rates and a reasonable term rate—from a bank, a credit union, or the dealership you’re buying from—can be the ticket to car ownership.
Here’s what to expect when taking out a car loan in Indiana:
- Make a down payment (usually about 10% of the car’s total value)
- Choose your loan term (how long the loan lasts) and negotiate an interest rate with the lender
- You’ll need to pay off the loan’s principal (the amount of money you’re required to pay back) on a monthly basis over the loan’s term
- You’ll also pay interest monthly, which is based on your annual percentage rate (APR)
The loan you’re able to secure will depend on a few factors, including the make and model of your car, your credit score, and the loan term you negotiate with your lender. The table below is a handy guide in terms of what your APR and monthly payment might look like if you take out a loan in Indiana:
|Car Make||Average Annual Interest Rate||Average Monthly Payment|
Feeling good about finding a car loan in Indiana that works for you? Here’s what you need to do.
Check your credit
You want to make sure your credit score is 660 or higher in order to land a good interest rate. If your score tops 700, you might be able to qualify for a rate of 3% or less. Not too shabby, considering the national average is 5%!
The table below will help you estimate your average interest rate and monthly payment based on your credit score:
|Loan Terms||Average Annual Interest Rate||Average Monthly Payment|
Next, weigh your options and compare loans from at least three reputable lenders. Why? Because you want the loan that works best for you. Some dealerships will offer to handle your car loan, but be wary that the loan’s terms aren’t heavily stacked in the dealer’s favor—and not yours.
Instead, take a look around for a lender that offers a low-interest rate and a reasonable loan term. Also, be aware of your approval odds with a prospective lender and their customer service record.
Choose your loan term
In Indiana, when you’re looking for a loan, remember that the term is negotiable. The average car loan is between 60 and 72 months.
One thing to keep in mind when signing up for a long-term loan is that the monthly payments may be lower, but you’ll pay more in interest over the lifetime of the loan, making it more expensive down the road.
If you can, going with a short-term loan is a better bet. You might have to pay a bit more monthly, but your interest rate will be lower. Ideally, your loan term should be no more than 60 months.
Check out the table below to see how your APR and monthly payment will change based on your loan term in Indiana.
|Credit Rating||Average Annual Interest Rate||Average Monthly Payment|
If you can, get preapproved for a loan. A pre-approved loan can be your secret weapon when you walk into a dealership. Knowing you already have a loan offer to fall back on can help you shop with confidence.
If a dealer asks if you need a loan, hear them out and negotiate. They might be willing to give you a better deal. And if not? You’ve got your pre-approved loan with a monthly fee and interest rate you can handle already lined up.
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Can you get a car loan in Indiana for a used car?
Yes, you can get a car loan for a used car in Indiana. However, you won’t have as much leeway as you would when getting a loan to buy a new car:
- Used car loans usually carry a higher interest rate (around 8%)
- Some lenders won’t offer loans for vehicles of a certain age
- Most banks have minimum amounts they’ll lend out for a car loan—if the amount you seek to buy a used car is too low, try your luck with a credit union
Take a look at this table to see how the age of a car can affect loan terms in Indiana:
|Car Year||Average Annual Interest Rate||Average Monthly Payment|
Indiana car loan calculator
You’re now familiar with how to get a car loan, how to find a reasonable loan term, and how to factor in the car you’re looking at. With this knowledge in hand, use Jerry’s Indiana car calculator to add everything up.
This can help you figure out how much you might pay for a car loan in Indiana, and what your interest rate could be based on your credit rating, the loan amount, loan term, and the vehicle’s make and model.
One thing to keep in mind—these values are averages. Once you meet with your lender to finalize the details of your loan, the interest rate and loan terms are negotiable, as are extra fees and penalties. Use this tool to prepare yourself to get the best loan agreement possible.
|Average Annual Interest Rate||Average Monthly Payment|
How to find affordable car insurance in Indiana
Finding yourself a car loan that works for you is the first step to hitting Indiana’s roads—next, you’ll need to insure your new ride according to Indiana’s car insurance laws.
Doing so has never been easier—just download the Jerry app! Sign-up takes just 45 seconds, and then this broker and comparison shopping app compares more than 50 top quotes for you to choose from. Once you make your pick, Jerry signs you up for your new policy and cancels your old one. Best of all, Jerry automatically searches for better rates on your behalf before every renewal period!
“This was and is great service! Jerry saved me $400 on my renewal. I was super shocked!” —Jackson M.
What credit score is needed to buy a car in Indiana?
Ideally, you’ll have a credit score of 660 or higher to set yourself up for a car loan that works for you. Still, you will probably be able to find a lender who will give you a loan with a lower credit score.
Will a bank give me a loan for a used car?
This depends. Some banks won’t offer a loan below a certain amount. So, if you need a smaller loan than a bank is willing to give you, give a credit union a try—you’ll likely be able to find one willing to loan you the amount of money you need to buy a used car.
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