Car loans remain more expensive than a year ago. But car owners with “good” credit in the 700 range can expect to take out more affordable loans.
FICO, the biggest credit scoring company, considers 670+ scores “good. You’re not alone if your score falls within this range; the average FICO® Score for Americans is roughly 700. Folks with good scores get decent rates on car loans.
Hello, car loan seekers! If you’ve ever wondered what the average interest rate on a loan for a vehicle with a credit score of 700 is, you can stop wondering now because we’ve got the details right here.
Spoiler alert: It’s not as bad as you might think. In fact, with a 700 credit score, you’re in the sweet spot for car loan interest rates. You’re not quite prime, but you’re definitely not subprime either. That means you can snag some pretty decent rates, especially if you shop around.
So, what’s the magic number? According to the latest data from Experian, the average interest rate for a new car loan with a 700 credit score is 7.01%. For a used car loan, it’s 9.73%. Not too shabby, right?
But wait there’s more! These are just averages. Your actual interest rate will depend on a few other factors, like the length of your loan the type of car you’re buying, and your individual credit history.
Here’s the lowdown on how those factors can affect your interest rate:
- Loan term: The longer your loan term, the higher your interest rate will be. That’s because you’re borrowing money for a longer period of time, so the lender is taking on more risk.
- Car type: New cars typically have lower interest rates than used cars. That’s because new cars are considered less risky for lenders.
- Credit history: Your credit history includes things like your payment history, credit utilization, and the length of your credit history. The better your credit history, the lower your interest rate will be.
So how can you get the best possible interest rate on your car loan? Here are a few tips:
- Shop around: Get quotes from multiple lenders before you choose one. This will help you compare rates and find the best deal.
- Improve your credit score: The higher your credit score, the lower your interest rate will be. So, take steps to improve your credit score before you apply for a loan.
- Make a larger down payment: The more money you put down, the lower your loan amount will be. This will also lower your interest rate.
- Choose a shorter loan term: A shorter loan term will mean higher monthly payments, but it will also mean a lower interest rate.
You can improve your chances of obtaining the greatest interest rate on your auto loan by paying attention to these pointers.
And remember, with a 700 credit score, you’re in a good position to get a great rate. So, don’t settle for the first offer you get. Shop around and compare rates to find the best deal for you.
Happy car hunting!
Average interest rate for good credit
The average interest rate for good credit on new and used cars is about 8% and 8. 5%, respectively, according to myFico data on interest rates by credit score. (Early last year, auto rates were much cheaper. ).
Example: Say a customer with a 700 credit score wants to take out a $35,000, 60-month loan. They would pay about $710 monthly for a new car. Used car interest rates tend to be higher. So the same customer would pay about $864 per month for a used car.
Customers with lower scores can expect to pay more, between $710 and $1,100 monthly, on a $35,000 loan. Thats why its essential to have a high credit score. It can help you keep your monthly payments low, and youll pay less in the long run.
How to lower your monthly car payment
Expensive? Fear not—you can reduce your monthly premiums by going with a lease, extending your payback period, or improving your credit score.
You can lower monthly payments by extending a standard 36-month payback period to 48 months or more. However, doing so will cost you; youll pay more interest over the life of your loan. But its worth considering if you need some wiggle room to cover non-car expenses.
Switching to a lease lowers your monthly payments, but buyers sacrifice car ownership. However, if you plan to regularly upgrade to a new car or expect to have more money available after your lease expires, a lease might be something to think about.
It takes time to boost your credit score, but the juice is worth the squeeze. Typical tactics include avoiding opening new credit cards on a regular basis, maintaining a low monthly balance, and paying your bills on schedule each month. The best credit scores are in the 800+ range and can offer significant discounts on car loans.
What is the average interest rate on an auto loan with 700 credit?
FAQ
What APR will I get with a 700 credit score for a car?
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Average Auto Loan Interest Rate by Credit Score
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Average New Car Rate
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Average Used Car Rate
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Nonprime (620-659)
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8.86%
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13.28%
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Prime (660-719)
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6.40%
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8.75%
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Super prime (720 or above)
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5.18%
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6.79%
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What is a good interest rate on a 72 month car loan?
Is 700 credit score good for a car?
Can I get a 50k car loan with a 700 credit score?
How much does a 700 credit score pay for a car loan?
However, these depend on your shopping habits, income, and debt-to-income ratio. A credit score of 700 gets you an interest rate of 3% to 6% on car loans for new cars and about 5% to 9% for second-hand cars. Please note that these figures are just estimates, not interest rates.
What does a credit score of 700 mean?
A credit score of 700 gets you an interest rate of 3% to 6% on car loans for new cars and about 5% to 9% for second-hand cars. Please note that these figures are just estimates, not interest rates. The actual interest rates may vary as they depend on multiple factors such as: Is A Credit Score Of 700 A Good Score?
What is the average interest rate on a car loan?
The average interest rate for auto loans on new cars is 8.99%. The average interest rate on loans for used cars is 13.49%. What credit score is needed to buy a car in 2023? What interest rate can I get on a car loan with a 750 credit score?
Which credit score is best for a car loan?
Source: Experian Information Solutions. People with credit scores above 780 have the best shot of getting the lowest interest rates, with credit scores below 501 typically resulting in the highest interest rates. » Compare lenders’ rates to find the best auto loan for you