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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?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“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!”
View full answer
- Gregory R.
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