Is a 10% interest rate on a car loan good on a 60-month loan?
I've been shopping around for car loans and the best rate I can find is 10%. Is this good?
Whether or not a 10% interest rate on a car loan is good or bad depends on your credit score, your income, and your debt-to-income ratio.
Overall, the average interest rate on a 60-month car loan as of September 2021 is 3.81%. So, a 10% interest rate is high by comparison.
However, that average is based on all credit scores.
To help calculate what you should be paying for your credit score, here are the averages for super-prime and subprime credit scores:
- Borrowers with super-prime credit (780+) can get a loan as low as 2.34%
- While deep subprime borrowers (500 or less) have an average interest rate of 14.59%
Keep in mind that, if you agree to a loan with a 10% interest rate, you will likely be paying thousands of dollars in interest over the course of the loan. If you can wait to take out a loan until you’ve improved your credit score, that might be the best (and least expensive) choice.
If you decide to move ahead with a car loan, make sure you shop around for car insurance. Lenders require financed vehicles to be fully covered. To get the best coverage at the most affordable price, download Jerry.
Jerry collects quotes from up to 50 top insurance companies, like Nationwide, Allstate, Safeco, Progressive, and Travelers, in seconds! They even help cancel your old policy once you’ve made your pick!
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