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!

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  • What Makes a Used Pickup Truck a Good Investment?

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  • Why Used Cars are Perfect For your High School Grad

    If you’re ready to buy a new car for your recent high school graduate, we have a suggestion. Why not buy one of the used cars available at Ole Ben Franklin Motors? There are more than a few good reasons to consider a pre-owned car for your family’s newest driver.

Ole Ben Franklin Motors 36.002422, -84.247453.