Before you apply for a car loan in North Carolina, make sure your credit score is at least 660. When considering your options, look for a loan with the lowest interest rate and a term that is lower than 60 months (five years).

Applying for a car loan can be confusing for first-time buyers. But you don’t have to go in unprepared. With Jerry, the fully licensed car insurance brokerage app here to offer guidance, you’ll have everything you need to know about finding a car loan in North Carolina.

Use the following as a step-by-step guide, or as a reference tool, wherever you are in the process!

How to get a car loan in North Carolina

Car loans are among the most common loans taken out, not least because almost everyone needs a car and few are prepared to pay the full cost for one. Traditional car loans are extremely straightforward—you apply, get approved, use the loan towards the purchase of your car, and repay the value of the loan plus interest over a predetermined number of years, or loan term.

You can apply for a loan through your bank or credit union, or through the dealership from which you’re buying a car. Each may have different terms and conditions, so be sure to do your research before deciding.

Here’s how taking out a car loan works in North Carolina:

First, you’ll start with making a down payment, which is typically around 10% of the value of the car.
Next, you’ll decide on a loan term, which is how long you’ll have to pay off the loan.
Once the term is decided, you and your lender will determine your interest rate. The lower your interest rate, the less you’ll pay over time.
Then, over the course of the loan term, you’ll repay the loan principal, which is the amount you borrowed, and the monthly interest as determined by your interest rate, in monthly installments.
You’ll also pay the cost of borrowing the money, including interest and fees, as determined by the loan’s annual percentage rate (APR). Your loan size and type will be determined based on several factors, including the loan term, your credit score, and the kind of car you’re buying. To see what you can expect from your loan in terms of APR and monthly payments, take a look at the table below:

Credit Rating

Car Make	Average Annual Interest Rate	Average Monthly Payment
ACURA	8.1	$360
ALFA ROMEO	8.16	$361
ASTON MARTIN	8.16	$361
AUDI	8.27	$362
BENTLEY	8.16	$361
BMW	8.67	$365
BUICK	8.19	$361
CADILLAC	8.43	$363
CHEVROLET	8.19	$361
CHRYSLER	8.45	$363
DODGE	8.29	$362
FERRARI	8.16	$361
FIAT	8.21	$361
FORD	8.19	$361
GENESIS	8.16	$361
GMC	8.13	$360
HONDA	7.98	$359
HYUNDAI	8.19	$361
INFINITI	8.29	$362
JEEP	7.98	$359
Jaguar	8.16	$361
KIA	8.37	$363
LAMBORGHINI	8.16	$361
LEXUS	8.13	$360
LINCOLN	8.27	$362
LOTUS	8.16	$361
Land Rover	8.16	$361
MERCEDES-BENZ	8.16	$361
MINI	8.16	$361
MITSUBISHI	8.29	$362
Maserati	8.16	$361
Mazda	8.16	$361
NISSAN	8.24	$361
POLESTAR	8.16	$361
PORSCHE	8.28	$362
RAM	8.19	$361
ROLLS-ROYCE	8.16	$361
Subaru	8.16	$361
TESLA	8.56	$364
TOYOTA	7.98	$359
VOLKSWAGEN	8.19	$361
VOLVO	8.01	$359

If you’re ready to get started, here’s a step-by-step guide to take you through the process.

Check your credit

Your credit score has a major impact not only on your eligibility for a loan, but also on the interest rate you’ll ultimately pay. A better credit score, ideally 660 or higher, can get you a lower interest rate, typically around 5%. Having a score that’s even higher than that may qualify you for an interest rate as low as 3%.

Use the table below to estimate your average interest rate and monthly payment based on your credit rating.

Credit Rating

Loan Terms	Average Annual Interest Rate	Average Monthly Payment
24	10.59	$694
36	8.42	$470
48	7.92	$363
60	7.87	$300
72	8.14	$261

Compare lenders

It may be easiest to just take the first offer that you come across, but that’s usually the most expensive offer. Lenders are not required to give you the lowest interest rate or best loan terms up front—you have to advocate for yourself to save money.

Don’t be afraid to negotiate for lower rates. Lenders are in the business of making money, so there’s always some room in their offers for negotiation. Once you’ve come up with firm offers from at least three lenders, compare them to determine which is best.

Look for the obvious benefits, like lower interest rates and more agreeable loan terms, but don’t forget to consider the less obvious things, like the lender’s overall customer service and approval rating.

Choose your loan term

Another major factor to consider is your loan term, which is the length of time in which you agree to pay the loan off. On average, loan terms are typically between 60 months and 72 months.

Longer loan terms result in lower monthly payments, which at face value can make it seem like long loan terms are the best option. But that’s not usually the case, because you also have to factor in interest. You pay interest every month that the loan is still being repaid, so longer loan terms mean more interest paid. And that means it’s typically more expensive in the long run.

On the other hand, shorter loan terms have higher monthly payments, but you’ll pay less interest over the loan term. The monthly payments can be prohibitively expensive for many borrowers, so they’re not always ideal.

The trick is to strike a balance between monthly payments and interest rates so that you can afford the payments without paying more in interest. 60 months is typically the right balance for most borrowers.

Here’s how your APR and monthly payment could change based on your loan term in North Carolina.

Credit Rating	Average Annual Interest Rate	Average Monthly Payment
Fair	15.4	$410
Good	8.42	$361
Very Good	5.11	$341
Excellent	3.89	$333

MORE: Should you get a 72-month car loan?

Get preapproved

If you can get preapproved for a car loan, do so. Knowing the loan amount you’re approved for and what the monthly payment is puts you in an advantageous position going in, as you have a reference to use when negotiating for the best deal.

Make sure you bring your preapproval form with you when you go to your private dealer or bank.

Can you get a car loan in North Carolina for a used car?

Yes, but there are a few caveats. Apart from the fact that not every bank may be willing to approve a loan for a used car, consider the following:

Used car loans typically have higher interest rates, in the neighborhood of 8%.
If the car is past a certain age, some lenders may not approve the loan.
In addition, lenders may not approve the loan if the purchase price is too low. In this case, you may want to consider a loan from a credit union.

You can refer to the table below to see how the age of the car you want to buy could potentially affect your car loan:

Car Make

Car Year	Average Annual Interest Rate	Average Monthly Payment
2021	7.48	$305
2020	7.81	$308
2019	7.98	$308
2018	7.83	$307
2017	8	$308
2016	8.13	$309
2015	8.29	$310
2014	8.27	$379
2013	8.33	$380
2012	9.1	$510
2011	9.1	$510
2010	9.1	$510

MORE: Car Insurance in North Carolina

North Carolina car loan calculator

So now you know all the steps and it’s time to put them to work! But there’s one last bit of helpful information you should take with you before you get started: how much you could pay for a car loan and your potential interest rate based on your loan term, loan amount, car make, and credit score. Jerry’s car loan calculator can help you figure out that number before you speak to a lender.

Just remember that the value returned by the calculator is an average, not a guarantee. It’s to be used to give you a ballpark idea of what you most likely will end up spending, which can help with negotiations and help you avoid overpaying.

Car Make

Credit Rating

Loan Terms

Loan Amount

Average Annual Interest Rate	Average Monthly Payment
8.2	$361

MORE: North Carolina electric vehicle incentives

How to find affordable car insurance in North Carolina

You’ve got the loan, you’ve got the keys, and you’re about to drive off, but there’s just one thing stopping you—insurance! Every state has minimum legal insurance requirements and that includes North Carolina. So you can’t hit the road until you’ve got your car on a policy.

But instead of trying to shop on your phone in a panicked hurry, just download the Jerry app and compare quotes from more than 50 insurance companies in minutes!. Jerry is a licensed brokerage app that can find tailored quotes for your new car, so you can pick the perfect rate at the perfect price.

And if you’re tired of handling paperwork after a day at the dealership (and honestly, who can blame you), Jerry’s there to save the day again! Jerry can handle finalizing the paperwork, and even getting your old policy canceled if needed.

Best of all, Jerry users save an average of $887 a year on car insurance, and you can too!

“I was literally floored by the savings Jerry found for me. I was paying close to $960 every 6 months and now I’m paying $380 every 6 months for IDENTICAL COVERAGE in North Carolina!” —Olivia Z.

FAQs

What credit score is needed to buy a car in North Carolina?

Whether in North Carolina or elsewhere, the best credit score to have is at least 660. It’s possible to get a loan with a lower credit score, but you’ll typically spend more money repaying that loan.

Particularly low credit scores often don’t qualify for car loans, and lenders that are willing to give out car loans typically pair them with predatory interest rates that make them difficult, if not impossible, to pay off.

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

That usually depends on the bank and the price of the used car in question. Most banks are fine with granting a car loan for a used vehicle, especially if it’s purchased through a dealership. But the car in question will likely have to be above a certain purchase price, as many banks won’t loan money below a certain threshold.