What is a reasonable interest rate for a car loan?

If I get a 48-month car loan, what would be a reasonable interest rate? I need to take out a car loan, but I don’t know much about loans. I’m worried that I’ll get myself into debt with an unreasonable interest rate.

Answer
A reasonable interest rate for a 48-month car loan differs depending on your credit score. On average, the current interest rate for a 48-month new car loan is 3.89%. If you have a credit score below 700, you might get an interest rate closer to 4.8%.
To get a lower interest rate on your loan, you can do a few different things:
  • Get a cosigner.
  • Boost your credit score as much as you can.
  • Make a large downpayment.
  • Opt for a shorter repayment period if you can afford it. Your choice of a 48-month repayment period will already get you a pretty good rate, but a 36-month loan would probably offer even lower interest rates.
  • Shop around and talk to different lenders about the rates they have available. Some lenders will offer you better terms than others do.
While you’re shopping around for a car loan, try shopping around for car insurance, too! The Jerry app makes it easy to find the best rates out there for your new car. Just download the app and answer some quick questions to see a comprehensive list of available insurance policies that work for you!
Liz Jenson
Answered on Nov 17, 2021
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