Should I get a car loan or a personal loan to buy a Subaru Crosstrek?
"I can pay off a loan in a year, as I'm going to receive an inheritance. However, I don't know which type of loan to get.
For a Crosstrek, is it better to get a personal loan or an auto loan? How will each affect my credit score?"
Answer provided by
Answered on May 21, 2021
“Both personal and car loans are installment loans, so they should affect your credit in the same way. Therefore, one isn’t better than the other with respect to raising your credit score.
You should think about interest rates. If you have even a halfway-decent credit score, a car loan’s APR is about 3% to 5%. A personal loan is anywhere from 12% to 18%.
If you want to pay the least amount of interest over the coming year, a car loan will save you money on top of increasing your credit score.”
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