What's a good interest rate for a car loan if my credit score is 550?
I have a credit score of 550. I want to buy a car, putting 20% down and financing the rest. What's a good interest rate on this loan?
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Answered on Apr 27, 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.
“If you’re putting 20% down, you may find that lenders are more willing to work with you. However, the rates might be higher than you anticipated and you may face rejection from some lenders.
A credit union or local bank that you have a relationship with may offer you a loan, as well as lenders that specialize in high-risk car loans. Either way, you’re probably looking at around a 10% APR.
If you take this loan, keep making your payments. Eventually, you should see a significant rise in your credit score, at which point you should refinance the loan at a lower rate.
And don’t forget to budget for car insurance, gas, and maintenance, as buyers (especially first-time buyers) forget about these aspects of having a vehicle.”
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