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?"

“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!”
Eric Schad
Answered on May 28, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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