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Is 10.99% interest too high for a car loan?
"I currently have a credit score of 650 and I make about $5,500 a month. I want to buy a car for $20,000 for 60 months.
Every lender I've applied to has given me a double-digit interest rate, and 10.99% is the best I could find. Is this interest rate too high?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“If you have a limited credit history and a credit score of 650 (which is below average), then a 10.99% interest rate on a loan might not be too far-fetched.
Taking that loan is another story, though. At 10.99% for 60 months, you’ll pay over $6,000 in interest over the life of the loan. This means that you’ll be almost perpetually upside-down on the loan, which is never a good idea.
Your best bet is to improve your credit score and apply for financing at a later date.”
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- Gregory R.
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