Is 8% a good APR for a first-time car buyer?
"My car finally died on me, so I found a Honda Civic. The loan I got was $22,000 for 72 months at 8%. My credit score is 630.
Is this is a good loan, or should I refinance ASAP?"
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Answered on Jun 07, 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.
“An interest rate of 8% on that loan is phenomenal for your credit score, especially for only 72 months.
Because you found such a great APR with your credit, refinancing shouldn’t be on your radar until you pay your loan for probably a year.
After that, take a glance at your credit score. If you’ve sprung into the low 700s, you might find a better rate, so it’s worth shopping around.
Furthermore, if you can afford it, you might also look at lowering the length of your loan to 48 months or 36 months, as this will lower the rate even more and reduce the amount of interest you’ll pay over the life of the loan.”
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