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Is 4% a good car loan rate?
Can 4% be considered a good loan rate? This is my first time taking out a loan. My friends told me I should shop around from different lenders, but my first offer was with a 4% interest rate.
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
While your friends are right about shopping around, 4% is a good car loan rate! Your credit score determines what interest rate a lender will offer you. The better your credit is, the lower your rate will be.
When you have a lower rate, you won’t have to pay back the lender as much interest.Your monthly loan payments will also be more manageable. In addition, you won’t have to opt for a longer loan term, which is another benefit to help pay off this loan.
Typically, a good interest rate ranges between 3% to 9% for individuals with above-average to good credit scores. Even though you already have a low offer, it never hurts to shop around with a few other lenders like your friend suggested. That way, you can guarantee you have the best rate for you.
Since you’re purchasing a car, you should also shop around for your car insurance coverage with
Jerry
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