Is 17% APR too high for a car loan?

"My partner and I just purchased a used car for $9,500. We financed through a credit union and the rate they gave us was 17%.

We both have credit scores in the 700s. Is 17% interest too high for a car loan?"

Answer
“A 17% interest rate is high for people with credit scores in the 700s.
But remember that a credit score isn’t the only determinant of your rate. Other factors include:
  • Debt-to-income ratio
  • Loan-to-value ratio
  • Age and value of the car
  • Monthly income
Factor all of these in and 17% might be a decent rate. Because it sounds like you didn’t shop around, chances are you can find a better rate elsewhere.
The best course of action is to keep paying on your current loan while simultaneously looking for lenders to refinance the vehicle.”
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Eric Schad
Answered on May 21, 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.
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