630 Credit Score Auto Loan Interest Rate 72 Months

Your interest rate for a car loan will primarily be determined by your credit score, as well as by other elements like your down payment, the length of the loan, and the type of vehicle.

In this article:

When determining your loan interest rate, auto lenders take into account a number of factors, including your credit score.

Interest rates have increased slightly over the past year for consumers with higher credit scores, while they have decreased slightly for those with lower credit scores. Regardless, if you have good or excellent credit you can still get a low rate. Heres what to expect.

What Are the Average Auto Loan Rates by Credit Score?

The average auto loan interest rate paid by borrowers with credit scores in different ranges is examined in Experians quarterly State of the Automotive Finance Market.

In the second quarter of 2022, borrowers with the best credit scores received interest rates for new cars that were, on average, under 3%. Interest rates on used cars were generally a little higher, peaking at 3 on average. 68%. What to anticipate from auto loan rates for both new and used cars is as follows:

Average Auto Loan Interest Rate by Credit Score
Average New Car Rate Average Used Car Rate
Deep subprime (579 or below) 12.84% 20.43%
Subprime (580 – 619) 9.75% 16.85%
Nonprime (620 – 659) 6.57% 10.33%
Prime (660 – 719) 4.03% 5.53%
Super prime (720 or above) 2.96% 3.68%

Be aware that your interest rate may change depending on whether you finance a car from an independent dealer or a franchise dealer. Franchise dealers can typically offer you captive financing, or in-house financing, at a slightly lower rate.

How Do Auto Loan Rates Work?

Auto loan interest rates are determined through risk-based pricing. Your typical interest rate will be higher to account for the risk if a lender determines that you are more likely to default on your loan due to your credit score and other factors.

Factors that can impact your auto loan interest rate include:

  • Credit score and history: Even if your credit score is relatively high, you may still end up with a higher interest rate if there are negative items on your credit report, such as missed payments, collection accounts, repossessions and bankruptcy.
  • Loan term: The longer your repayment term, the more risk it carries for the lender—both that you might default on your payments and that market interest rates may increase, making your loan less profitable than new loans. You may be able to score a lower interest rate by going with a shorter repayment term. Just remember that shortening your loan term will also increase your monthly payments.
  • Down payment: Putting more money down on your vehicle purchase reduces how much you need to borrow, thereby decreasing the risk associated with your loan. As a result, a larger down payment may result in a lower interest rate.
  • New vs. used vehicle: Auto manufacturers provide many incentives for car buyers to purchase new vehicles, including lower interest rates through their financing companies. Other lenders, including banks and credit unions, may also lower their rates to compete. In contrast, if youre buying a used car, theres no incentive for lenders to offer lower rates, which results in higher rates on average.
  • Income and debt: Lenders will consider your debt-to-income ratio (DTI), or how much of your gross monthly income goes toward debt payments. A high DTI may be a sign that you cant take on any more debt without putting stress on your budget and may result in a higher interest rate.
  • The lender: Each lender has its own criteria for determining auto loan interest rates and may have differing starting and maximum rates.
  • An annual percentage rate (APR), which may include the cost of interest and fees, will be used to represent the auto loan interest rate you are eligible for. The lender amortizes the cost of the loan using your interest rate. As a result, you will pay higher interest rates early on in the loan term than you will later.

    How to Improve Your Credit Score

    Increasing your credit score is your best option for securing a lower interest rate. However, depending on your circumstance, this process could take several months or even years. Taking these and other actions can still help you if you can’t wait.

    For instance, you might be able to refinance in the future at a lower interest rate or get a better deal on your subsequent auto loan. In any case, the following are some ways you can improve your credit right away:

  • Review your credit report and credit score to see where you stand and which areas of your file to address.
  • Catch up on past-due payments to avoid further damage to your score.
  • Pay down your credit card balances to reduce your credit utilization rate.
  • Limit new credit applications to keep hard inquiries from having a compounding effect on your credit score.
  • Get credit for rent, utility and streaming payments with Experian Boost®ø .
  • If your experience with credit is somewhat limited, use Experian Go™ can help you establish and grow your credit history. Youll also get free access to your credit score and Experian credit report as well as resources and insights to help you develop healthy credit habits.
  • How to Get a Lower Auto Loan Interest Rate

    One of the best ways to get a lower auto loan interest rate is to raise your credit score. To determine which areas you need to address, you can do that by looking at your credit report and score.

    Paying off credit card debt and making sure any past-due accounts are brought current are common ways to raise your credit score. Here are some additional ways you might be able to lower your auto rate as you work to improve your credit:

  • Shop around: One of the best ways to get a lower rate on your auto loan is to compare rate offers from multiple lenders. Its a good practice to apply for preapproval and get rates from at least three to five lenders to get a good idea of what youre likely to qualify for.
  • Apply with a cosigner: If you dont have time to improve your credit, applying with a creditworthy cosigner may improve your chances of scoring favorable terms. The lender will consider both credit profiles to determine the loans risk and your interest rate.
  • Make a larger down payment: Again, putting more money down reduces how much you owe and the loans risk to the lender. If you can afford it, consider making a larger down payment to save money with a lower rate.
  • Opt for a shorter repayment period: A shorter repayment term will result in a higher monthly payment. But if you can afford it, it could help you qualify for a lower rate on your loan and reduce your overall interest costs.
  • Think about each of these choices and choose the best one for your needs, objectives, and resources. And keep in mind that you can always refinance the loan later on when your credit has improved if you don’t get the best interest rate available this time.

    Maintain Good Credit for Future Auto Purchases

    Maintaining good or excellent credit can result in even greater savings over the long run on future auto purchases as well as other financing options, even though improving your credit can help you save money on your next car purchase in the short term.

    Make it a point to regularly check your credit in order to keep track of your credit score and the various factors that affect it. Keeping track of your credit can also assist you in identifying potential fraud as it occurs, allowing you to take swift action to avoid harm to your credit score.

    Additionally, search for additional means of reducing the cost of ownership. You can compare auto insurance rates from the best providers with Gabi®, a service of Experian, to make sure you’re getting the lowest premiums possible.

    Learn what it takes to achieve a good credit score. Review your Experian FICO® Score today for free to see what is boosting and detracting from it.

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    What interest rate can I get on a car loan with a 630 credit score?

    Options for a 630 credit score car loan Your interest rate could range from 11 to 92 percent and 4. 68 percent on a new car loan.

    What is a good interest rate for a 72 month car loan?

    The average 72-month auto loan rate is almost 0. Interest rates are 3% higher than the typical 36-month loan for new cars. For new cars, loans with shorter terms have lower interest rates. Loan termAverage interest rate60-month used car loan4. 17% APR72-month used car loan4. 07% APR.

    What car loan interest rate can I get with a 650 credit score?

    650 credit score auto loan interest rates According to Experian data, the average auto loan rate for near-prime borrowers was 6. 07% on new vehicle financing and 9. 80% on used vehicle financing in Q4 2021.

    Is 630 a good credit score to buy a car?

    A credit score of 630 isn’t the best, but it’s not the worst either. As long as you: Be ready for high interest rates—Lower credit means higher interest rates, so determine how much of an additional monthly expense you can afford—a 630 credit score should be sufficient for a car loan.