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Is 8% a good interest rate for a car loan?
I took out a car loan a few months ago, and making my monthly payments has been a bit challenging. I was talking about it with my parents, and my dad told me my interest rate of 8% seems high. Is 8% good for a car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear you’ve been having some trouble making your
car loan
payments. Your dad is right—8% is not a good interest rate. The average rate is around 4%.The interest rate you qualify for depends on your credit score, income, and debt-to-income ratio. An interest rate of 8% is reasonable if your credit score is 660 or lower. However, no two lenders are the same, so you should shop around and compare offers from multiple lenders to ensure you get the best rate and terms possible.
If you feel you should be eligible for a lower interest rate or would like to adjust your monthly payments, you should consider
refinancing the loan
and checking out offers from:- National and local banks
- Credit unions
- Online lenders
Finally, to help make payments more manageable, you can look into saving on other expenses like your
car insurance
. Jerry
makes it quick and easy. Jerry is an insurance comparison app that shops for low prices with over 50 different insurance companies for free.If you’re hesitant to switch plans or insurance providers because you’re worried about the work involved, don’t be. Jerry does all the paperwork for you and even helps cancel your old policy! The average Jerry user saves $879 a year on car insurance.
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- 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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