What Credit Score is Needed for a Car Loan?

Man and wife at a car dealership

 

Are you worried about what credit score is needed for a car loan? Look, we’ve all been there. You find yourself underemployed. You’re late on some bills. Before you know it, your credit score has plummeted. The good news is that a low credit score doesn’t have to be an obstacle to getting your next car. Our finance department has helped lots of Farragut customers just like you to get financing for their next vehicle. How much credit do you need for a car loan? Let’s talk about how to get your next car loan.

How Much Credit Do You Need for a Car Loan?

So, how much credit do you need for a car loan? The fact is, just about any Sevierville driver can get an auto loan, regardless of their credit score. Why? Dealerships are not in the business of denying potential customers the opportunity to buy a vehicle. In fact, we guarantee approval at Ole Ben Franklin Motors. However, the lower your credit score, the higher the interest rate, and thus the payment, will be on your loan. You can mitigate that by increasing the size of your down payment and opting for a loan with a shorter term.

What Credit Score is Needed for a Car Loan for a New Vehicle?

As we said, you can probably get a loan with a very low credit score. But expect to pay a higher interest rate. Here’s how the interest rates break out for new cars by credit score:

Average Interest Rate on a New Car Loan by Credit Score

  • 781–850 – 2.41%
  • 661–780 – 3.54%
  • 601–660 – 6.64%
  • 501–600 – 10.81%
  • 300–500 – 14.66%

What Credit Score is Needed for a Car Loan for a Used Vehicle?

Interest rates on loans for used vehicles are usually a little higher on used vehicles. Here is how the rates break out by credit score:

Average Interest Rate on a Used Car Loan by Credit Score

  • 781–850 – 3.71%
  • 661–780 – 5.54%
  • 601–660 – 10.43%
  • 501–600 – 17.26%
  • 300–500 – 21.07%

Let the Finance Team in Knoxville Help

We’ve helped customers from Seymour and beyond get financing for their next car. That’s because we make the financing process easy. You can even calculate your payment online. We’re just down the road, so drop by or contact us today!

More from Ole Ben Franklin Motors

  • Are Extended Car Warranties Worth It?

    A lot of people talk about getting an extended car warranty after the original factory warranty expires. Some may be wondering what an extended warranty entails and whether the cost is worth it. There are also many misconceptions about what an extended warranty can cover, and if an extended warranty is worth having if it…

  • Financing a Car With Bad Credit in Knoxville, TN

    You’ve probably been warned about trying to finance a vehicle if your credit is not stellar. Perhaps you’ve been told your credit score will make or break financing decisions. You may find challenges in obtaining financing, and typically may be faced with options having higher interest rates. At times, you may feel like your options…

  • Moonroof vs Sunroof in Knoxville, TN

    When shopping for a new or used vehicle, you may notice that the features may include a sunroof or a moonroof. While some may use the terms interchangeably, believing that there is no clear distinction between the two, there are some key differences in both the moonroof and the sunroof that make them separate features….

Ole Ben Franklin Motors 36.002422, -84.247453.