Loans can be confusing, but we have all the information you need to find a great lender in Minnesota. We’ll cover everything from comparing lenders to the perks of getting pre-approved.

How to get a car loan in Minnesota

Those in the market for a car loan have a few options when choosing a lender—banks, credit unions, or even your car dealership. A car loan allows the buyer to spread payments out over time. Loans are a solid option for those who don’t want to pay upfront.

Minnesotans should expect the following when shopping for a loan:

10% of the vehicle’s value paid upfront (down payment)
A lender will negotiate the term length with you
A loan principal (total value) divided into monthly payments
An interest rate based on your annual percentage rate (APR).

Your loan will be unique, depending on personalized factors such as type of vehicle, chosen term length, and credit score. Use the table below to see how APR and monthly payments affect the Minnesotans qualifying for loans.

Credit Rating

Car Make	Average Annual Interest Rate	Average Monthly Payment

We have the next steps if you’re ready for a car loan:

Check your credit

If you’re in the market for a new loan, you’ll need to know your credit. The optimal score, 660 or above, will give you access to loans with 5% interest—the national average. Excellent scores (700 or more) can lend you rates as low as 3%.

You don’t need great credit to apply for a car loan, but better scores will open up the most competitive offers—and make the process more straightforward.

The table below will demonstrate what interest rates and monthly payments you might qualify for based on your credit rating.

Credit Rating

Loan Terms	Average Annual Interest Rate	Average Monthly Payment

Compare lenders

Savvy loan shoppers don’t settle for the first option. Regardless of your vehicle, spend time comparing offers from several lenders. Many lenders will offer you quick loans at the cost of high interest rates—weed out these lenders first.

It can take a long time to pay off a car loan completely. Before settling on a lender, compare at least three options. Once you’ve got an interest rate you’re happy with, brush off those negotiation skills, and begin the loan process.

MORE: What is a good credit score for a car loan?

Choose your loan term

Find a term that works for you. When you sit down with a lender, you’ll be able to negotiate your term length—the duration it takes to pay off your vehicle entirely. Opting for a lower term will reduce your monthly payment, but you’ll pay more over time.

The average loan term in Minnesota is between 60 and 72 months. A 60-month loan term is a popular choice to keep monthly costs low without excessive interest markups.

Want to know how loan terms affect APR and monthly payments? See the table below.

Credit Rating	Average Annual Interest Rate	Average Monthly Payment

Get preapproved

Preapproval is a must-have for those chasing a fair deal. Getting preapproved means you’ve already qualified for an interest rate with an outside lender, and this will give you greater leverage when you walk into the dealership.

Can you get a car loan in Minnesota for a used car?

You might be able to get a car loan for a used one in Minnesota—but it will depend on the vehicle’s age and purchase price. Keep the following in mind:

Used cars have higher interest rates (around 8%) than new vehicles
Lenders have limits on the age of vehicles they approve for loans
Vehicles with a small purchase price may be declined by larger banks (credit unions offer more comprehensive price ranges)

The table below explores how a car’s make and year will affect loans in Minnesota.

Car Make

Car Year	Average Annual Interest Rate	Average Monthly Payment

MORE: How to get a car loan from a credit union

Minnesota car loan calculator

Feeling comfortable with car loan basics? It’s time to turn it up a gear. Jerry’s car loan calculator can show you the average loan you’ll qualify for based on your credit rating, loan term, and car make.

The value below is strictly an estimate. Use this knowledge to confidently assess whether your lender is giving you a fair deal—or just to see what’s out there.

Car Make

Credit Rating

Loan Terms

Loan Amount

Average Annual Interest Rate	Average Monthly Payment

MORE: Minnesota electric vehicle incentives

How to find affordable car insurance in Minnesota

Minnesota has some of the best public education in all 50 states. What don’t they teach you? Most drivers overpay for the protection their car needs.

Once your vehicle is properly financed, use Jerry to ensure your vehicle meets Minnesota insurance law standards.

Jerry is a personal insurance broker that lives in your pocket. But don’t worry about buying tiny office furniture, Jerry is an app! Download Jerry, answer a handful of questions, 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 was paying $350 a month for my new car. With Jerry, I set up a new policy in under 30 minutes that will save me over $1,000 a year!” —Mariah K.

FAQs

What credit score is needed to buy a car in Minnesota?

Most lenders will approve you for a loan if your credit is 660 or higher. You might be able to find a loan with a lower score—but you’ll end up paying more based on interest and term length.

Will a bank give me a loan for a used car?

Used car loans are possible but depend on a lot of factors. A lender will approve you for a loan only if the vehicle is fairly new and has a high enough purchase price. Used vehicle loans can also be expensive due to high interest rates.