Why is my interest rate so high on my car loan despite my excellent credit?

"I recently bought a car from my local dealer who worked out the financing for me. It is a great car and the payments are affordable.

That being said, I keep seeing that people with an okay credit score are getting approved for four to five percent interest rates, and yet I could only get approved for 12% despite having nearly perfect credit.

"

Answer provided by
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Johnny Puckett
Answered on May 11, 2021
“Your credit score is but one thing that lenders look at. They also take into account your monthly gross income, employment history, debt-to-income ratio, and credit history.
If this is your first month on the job, if you have low income, if you have a high amount of debt, or if this is the first car you’ve financed, the lender will consider you to be high-risk and charge you accordingly.
Interest of 12% is really high, but since you’ve already bought the car, you can make your payments on time for six to 12 months and then refinance at a lower rate. “
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