Find Auto Loans

Answer 1

Credit scores play a major role in auto loans. When you buy a car, the dealer will obtain a credit score from one of the three major credit bureaus. Based on this information, you will get an interest rate for your auto loan. The higher the credit score, the better the interest rate. Therefore, a good credit score could save you thousands of dollars over the life of your loan.

Interest rates are just dependent upon credit scores. The state you live in and the length of your loan also play a role. However, your credit score is the largest factor. How much does it matter? Assuming the current national averages, the interest rate on a $20,000 auto loan for sixty months is around 4.97% if you have excellent credit. For credit scores of 590 or under, that same loan would carry an interest rate of 18.89%. That translates to a huge amount of money over the length of the loan. It also means a larger monthly payment. By raising your credit score just a bit, you could save a lot. A credit score of 620 would give you a rate of about 11.98%. That lowers your monthly payment by over $70. If you have the time, repair your credit as much as you can before getting an auto loan.