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What's a normal interest rate for a car loan?
I want to finance a car, but I don’t want to overpay on the interest. What’s a normal or average interest rate on a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Deciding what a normal interest rate is for a
car loan
can be difficult because normal depends on the person getting the loan. More specifically, lenders base your interest rate on a variety of factors, including:- Credit score and credit history
- Income
- Debt-to-income ratio
- Loan-to-value ratio
Once they assess these factors, lenders will give you an interest rate. However, this interest rate depends on the length of the loan. The longer the loan, the more you pay in interest and vice-versa.
As of August 2021, normal car loan rates per credit score are:
- 300-500: 14.59%
- 501-600: 11.03%
- 601-660: 6.61%
- 661-780: 3.48%
- 781+: 2.34%
And normal car loan rates per loan term (irrespective of credit score) are:
- 36 months: 3.84%
- 48 months: 3.88%
- 60 months: 3.89%
- 72 months: 3.98%
- 84 months: 4.09%
With so many factors, a normal interest rate for you might be ludicrous or amazing for someone else. So make sure to shop around to find the best rate for your income and credit profile.
And just as you would shop around for the best insurance rate, do the same for your car insurance via the Jerry app.
As a licensed broker,
Jerry
helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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