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What car loan interest rate can I get with a 550 credit score?
I want to get a car loan, but I'm worried that my credit score of 550 will only let me qualify for high-interest loans. What rate should I expect?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Credit isn’t the only determinant of your interest rate, but it still plays a massive role.
With a credit score of 550, you’re in the subprime tier, which means you’re going to have a higher interest rate. In general, expect lenders to offer a
car loan
with an interest rate of 15% to 20% depending on the length of your loan—and that’s if they approve you at all.In all likelihood, you probably shouldn’t take out a loan at that interest rate, as you’re going to spend exorbitant amounts of money on interest and you’ll be
upside down
on the car loan for a terribly long amount of time. Furthermore, such a transaction will make it nearly impossible to refinance the loan in the near future.Instead of getting a new car, buy a used car with cash if possible. Take the money that would have gone to a car loan each month and use it to pay off your credit cards and other debt. Over time, your credit score should rise to the point where you can get a decent interest rate on your car loan.
In addition, you can also save money by taking a look at your car insurance. Compare your current policy’s price with the ones you find on
Jerry
to get the best bang for your buck.View full answer
- Gregory R.
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