Is 10.99% interest too high for a car loan?

"I currently have a credit score of 650 and I make about $5,500 a month. I want to buy a car for $20,000 for 60 months.

Every lender I've applied to has given me a double-digit interest rate, and 10.99% is the best I could find. Is this interest rate too high?"

Answer
“If you have a limited credit history and a credit score of 650 (which is below average), then a 10.99% interest rate on a loan might not be too far-fetched.
Taking that loan is another story, though. At 10.99% for 60 months, you’ll pay over $6,000 in interest over the life of the loan. This means that you’ll be almost perpetually upside-down on the loan, which is never a good idea.
Your best bet is to improve your credit score and apply for financing at a later date.”
avatar
Eric Schad
Answered on Jun 11, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
thumb-up

Did this answer help you?

Ask us a question by email and we will respond within a few days.
thumb-up

Have a different question?

You can meet us at our office and discuss the details of your question.

Read advice from car experts at Jerry

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies
Find insurance savings — it's 100% free