How can I estimate a car loan interest rate?
I’ve been shopping around for a used car, but I’m on a tight budget. I want to ensure I’m only looking at vehicles I can afford. Is there a way I can estimate the interest rate for a used car loan?
Determining your budget when shopping for a car can be challenging, but you can estimate a car loan interest rate using your credit score.
That said, this is a very rough estimate. Lenders determine rates on a case-by-case basis using many factors, so the only way to truly know the interest rate you’ll receive is to submit an application or get preapproved.
When applying for a used car loan, you can expect an interest rate of:
- 3.66% for scores between 781 and 850
- 5.49% for scores between 661 and 780
- 10.49% for scores between 601 and 660
- 17.11% for scores between 501 and 600
- 20.58% for scores between 300 and 500
Additionally, to ensure you’re getting the best rate, you should shop around and compare offers from multiple lenders, including:
- Local and national banks
- Credit unions
- Online lenders
Finally, when setting your budget, don’t forget to include your car insurance costs. If you want to make comparing quotes and purchasing a new policy simple, use Jerry.
Jerry is an insurance comparison app that can generate quotes from more than 50 top insurance companies like Travelers, Nationwide, and Progressive in seconds. After you make a selection, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to. They even help cancel your old policy! So why do all that extra work when Jerry can do it better?
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