Knowing your credit score can help you get off to the right start when purchasing an automobile, which is a significant financial commitment. Instead of “What credit score do you need to buy a car?” a better question to ask is “What credit score do you need to get a good deal on an auto loan?” A fair credit score of 650 is typically sufficient to obtain a car loan. Read on to learn more about getting a car loan with a credit score of 650.
Refinancing a car loan could be a wise decision for you, depending on your situation. Refinancing might be an option if you want to lock in a lower interest rate or need a lower monthly payment. The average credit score of those financing automobiles increased marginally from the prior year, according to Experian’s 2022 report. The report also discovered:
For a used car loan or lease, the average credit score was 669, while it was 736 for a new car loan or lease. Borrowers with credit scores of 661 or higher financed nearly 65% of the cars. 15% of all financing went to borrowers with scores between 501 and 600, while 2% went to borrowers with scores under 500.
You may be able to repair your credit by making a larger down payment, looking around for financing, and providing documentation of previous on-time payments on other significant purchases. You won’t be denied a car loan because of poor credit, but your interest rate might go up, which would mean higher payments.
What is a 650 credit score?
|Credit score range||Risk category||Description|
|781–850||Super prime||For borrowers with an excellent credit|
|661–780||Prime||For borrowers with a good credit|
|601–660||Nonprime or near prime||For borrowers with a fair credit|
|501–600||Subprime||For borrowers with a poor credit|
|300–500||Deep subprime||For borrowers with a poor credit|
Is it possible to get a car loan with a credit score of 650?
When a borrower has fair credit, getting a car loan with a 650 credit score is feasible and common. Experian estimates that in the fourth quarter of last year, 14% of new car loan borrowers and 22% of used car loan borrowers had near-prime credit scores between 601 and 660.
In 2021, lenders made more than 4 million auto loans and leases to people with subprime credit scores below 620, according to Equifax. Several of the most popular credit scoring formulas, like VantageScore 4 The range of 0 and FICO Scores is 300 to 850. A credit score of 650 is regarded as fair, nonprime, and close to prime.
The majority of car loan borrowers in Q4 2021 had credit scores above 660, but a car loan with a credit score of 650 is still feasible.
|Credit score||Average APR, new car||Average APR, used car|
|Deep subprime: 300-500.||14.76%.||20.99%.|
Auto loan interest rates with a 650 credit score
Experian data show that the average interest rate for car loans for near-prime borrowers was 6. 07% on new vehicle financing and 9. 80% on used vehicle financing in Q4 2021. Lenders typically offer lower auto loan interest rates when financing a new vehicle.
You may be a consumer wondering whether it makes sense to refinance an auto loan. Refinancing could benefit you if you can get a lower interest rate or monthly payment.
650 credit score auto loan conditions
For new vehicle financing in Q4 2021, borrowers with near-prime credit had an average car loan term of 74 months. Data show that 68 months was the average length of time for near-prime borrowers to finance a used car during that quarter.
Consumers with credit scores of 650 or higher are considered to be near-prime risk borrowers. A car loan may last anywhere from one year to more than 85 months. Longer terms may have higher interest rates and lower monthly payments than shorter terms.
For people with a credit score of 650, auto loans with terms ranging from a few years to more than 85 months may be an option. Your loan repayment schedule is determined by the term length. For instance, a five-year fixed-rate auto loan would have 60 fixed monthly payments. All loan payments must be made on time by the borrower.
How can you build your credit?
Paying bills promptly. Make sure to pay at least the minimum amount due on time. Your credit score will suffer if a payment is 30 days past due.
Maintaining low credit card balances relative to credit limits. Your credit score is significantly impacted by how you use your credit. It speaks to the percentage of your available credit that you are using. To lower your credit utilization and raise your credit score, you can employ a number of strategies.
Avoid applying for additional credit within six months of an auto loan. Absent a compelling reason to close them, open credit card accounts should remain active. Account closures reduce your overall credit limit, which may have a negative impact on your credit utilization.
Get the Way app for all of your transportation and vehicle-related needs.
Can you get a car loan with 650 credit score?
A credit score of 650 is regarded as fair, nonprime, and close to prime. The majority of car loan borrowers in Q4 2021 had credit scores above 660, but a car loan with a credit score of 650 is still feasible. Superprime: 781-850. 2. 40%.
What kind of car can I get with a 650 credit score?
You should be eligible for a subprime APR rate with a credit score of 650–659, which will be higher than someone with a 700–800 credit score. With a credit score between 650 and 659, the typical interest rate for a used car loan is 10. 33% (44. 75% higher than the average rate for a new car).
How much loan can I get with a 650 credit score?
With a 650 credit score, you can borrow up to $40,000 to $100,000 or more. Your income, your employment status, the type of loan you obtain, and even the lender all play a role in determining the precise amount of money you will receive.
What APR will I get with a 650 credit score car loan?
With a 650 credit score, you might be able to obtain a car loan, but the terms and conditions of the loan may not be to your liking. Your rating is deemed fair, so the typical interest rate you can anticipate paying is 11. 69% for a new car loan.