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Is a 13% interest rate a good car loan rate if I have a 675 credit score?

I’m interested in a car loan, so I’ve started shopping for interest rates. The lowest rate I can find is 13%. I have a credit score of 675; is this really the best I can do?

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Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yikes! In September 2021, the average interest rate for a prime borrower was 3.48% on a new car and 5.49% on a used one. Because 675 is within the prime range of credit scores, a 13% interest rate is fairly high. 
Something other than your credit score might be inflating your rates, such as:
  • Your debt-to-income ratio (DTI): If you just took out a mortgage or a personal loan, your DTI may appear unacceptably high to some lenders. Apply for a car loan pre-approval after resolving your other debts.
  • The length of your credit history: You might have a good credit score, but how far back does it go? You may have to wait a few years to get a better interest rate.
  • The longer the loan term, the higher the interest rate. Instead of an 84-month term, opt for a 60- or
    72-month car loan
    to lower your interest payments.
If all else fails, you can improve your potential interest rates by improving your credit score quickly. Good luck!
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