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Is 5.99% APR good for a car loan?
I’m shopping around for a car loan, but the best APR I can find is 5.99%. I have a low debt-to-income ratio (14%) and a credit score of 704. Is a car loan with a 5.99% APR good for me? Or should I keep looking?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Judging the APR based solely on your credit score and debt-to-income ratio, 5.99% APR seems a bit high. However, your credit score and debt-to-income ratio may not paint the total picture.
If you have a thin credit profile or little credit history, you may have a prime credit score of 704, but lenders might feel apprehensive, especially if you’ve never had a
car loan
or an installment loan.Moreover, your 14% debt-to-income ratio looks great. But if you’re only making $1,000 a month and have $140 a month in bills, that doesn’t leave a ton of extra room to pay for
car insurance
, gas, and maintenance.If you have little income and a thin credit profile, 5.99% APR might be great for a car loan. But if you have more income and more credit history, shopping around some more might yield some better results. If you haven’t done so, check out credit unions or online lenders to see if they can beat your current rate.
Don’t overextend yourself on a payment either. Make sure you have enough money to purchase gas, maintenance, and pay for full coverage car insurance as required by your lender. And just as you would with your car loan, make sure to shop around for car insurance with the Jerry app. As a licensed broker,
Jerry
helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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