What's a good car-loan rate for a first-time buyer with limited credit history?
"I'm trying to buy a car for the first time. I have several credit cards that I pay off each month.
However, I'm not familiar with interest rates for first-time car buyers. What rate should I expect?"
Answer provided by
Answered on May 28, 2021
“Many things factor into a car loan. It’s not just credit history or credit score. Lenders consider the following when determining your APR:
- Used car or new car
- Loan-to-value ratio
- Debt-to-income ratio
- Monthly income
You shouldn’t expect super-low rates. But if you have decent credit and choose a loan no less than 60 months, you should be able to find something between 5% and 7%.
Keep in mind that interest rates fluctuate, so timing is everything. Good luck!”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
What are some common myths and misconceptions about home insurance?
I don't want to fall into any traps or have any regrets after buying home insurance. What myths and misconceptions should I be aware of?
Mar 01, 2021
Can I return my car to the dealer if I can't pay my loan?
A family emergency came up and I can't pay for my car anymore. Can I return the car to the dealer?
May 05, 2021