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Is 6 percent a good interest rate on a 60-month car loan?
I've been shopping around for car loans and the best rate I've been offered is 6%. Is this a decent rate? My credit score is 700.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Whether or not a 6% interest rate on a
car loan
is good or bad depends on your credit score, your income, and your debt-to-income ratio.Overall, the average interest rate on a 60-month car loan as of September 2021 is 3.81%. So, a 6% interest rate is high by comparison—especially since your credit score is 700.
For further context, here are the averages for super-prime and subprime credit scores:
- Borrowers with super-prime credit (780+) can get a loan as low as 2.34%
- While deep subprime borrowers (500 or less) have an average interest rate of 14.59%
Our advice is keep shopping around for a better interest rate, otherwise, you’ll be paying way more interest than you need to over the course of your loan.
If you decide to move ahead with a car loan, make sure you shop around for car insurance. Lenders require financed vehicles to be fully covered. To get the best coverage at the most affordable price, download
Jerry
. Jerry collects quotes from up to 50 top insurance companies, like Nationwide, Allstate, Safeco, Progressive, and Travelers, in seconds! They even help cancel your old policy once you’ve made your pick!
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