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Can I get a car loan with a 504 credit score?
I went onto the TransUnion website to check my credit score, and it stands at 504. While I know this isn’t a stellar credit score, I need to get a car loan to get to work. Is a 504 credit score good enough for lenders to approve my application?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
A 504 credit score is in the subprime range of borrowers. Some lenders may approve you for a 504 credit score
car loan
, but your interest rate will be high.Due to your low credit score, most banks, dealerships, and credit unions will not approve your loan application. Instead, you will have to work with a lender that specializes in bad credit loans or a buy here pay here dealership. Even if you’re approved, expect a high interest rate.
According to NerdWallet, the average interest rate for someone with your credit score is:
- 9.92% for new cars
- 15.91% for used cars
A cosigner is someone you trust, such as a family member or friend. The ideal cosigner has great credit and trusts you to make your payments on time. Because they have good credit, you can usually gain approval and may even get a better interest rate.
If you’ve never had a car loan before, create a budget to manage your expenses. On top of gas, maintenance, and your car note, you will also need to pay for full coverage car insurance. Lenders will require this type of coverage, so don’t be shocked when they ask you for proof. If you want to save money on your new car insurance, turn to
Jerry
.Jerry is a licensed insurance broker that will collect quotes from over 50 top-rated insurers in minutes. After you find a great rate, Jerry can help you buy new insurance and cancel your old policy. Users save an average of $887 per year.
View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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