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What is the highest APR a car loan can have?
I was shopping around for a car loan and I don't have great credit. A lender offered me a loan at 15.9%, but that seems high. What's the highest an APR can go?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
While usury laws (loan-sharking laws) attempt to keep
car loan
lenders from charging unfair rates, there are some legal loopholes that could result in lenders charging extremely high APRs.That being said, the highest APR for a car loan tends to hover around 25%. However, this high of an interest rate is only extended to those with deep subprime credit scores, typically 600 or below.
But even if you have bad credit, you shouldn’t settle for a rate like 15.9%.
A high APR has many downsides, like:
We recommend you do one of two things: Shop around to find the best rate or wait until you improve your credit score.
Remember that you will also need full-coverage car insurance during the duration of your loan.
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