How does APR affect a car loan?

I’m shopping for a car loan and I keep seeing APR listed. How does this number affect a car loan? What is a good APR?

Answer
Loan terms can be confusing! Especially when there are several different interest rates available on car loans. APR stands for Annual Percentage Rate and includes the amount of interest that you pay on your car loan each year and any additional fees associated with the loan. The higher the APR, the more your loan will cost you.
In general, 2.34% is considered a good APR. However, APR is often determined by your credit score. If you have excellent credit, you’ll usually have a much lower APR. If your credit score is low, you could see APRs as high as 20% or more. To learn more about your APR options, shop around with a few different lenders to see what rates they offer you.
While you’re researching your loan options, take a minute to check out the Jerry app. Jerry makes it quick and easy to find the best rates available on the car insurance coverage you want for your new vehicle.
Liz Jenson
Answered on Dec 02, 2021
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