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What is the minimum credit score for a car loan?
I need a new car, but I have little cash to buy a used one. I want something that’s reliable so I can get to work. The bad news is that I have poor credit. What’s the minimum credit score needed for a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Getting a
car loan
is a nerve-wracking event, especially if you have poor credit. The good news is that there usually is no required minimum credit score for a car loan. While a better credit score will improve your chances of approval, you can still get a loan with a lower credit score.In some cases, certain lenders will have a minimum credit score needed for approval, but this varies by lender. Inquire with each lender before you apply to find out if they have a minimum score.
The downside of getting a car loan with poor credit is that you’re going to pay exorbitantly high interest rates. Here are the average interest rate for poor credit scores:
- 300-500: 14.59%
- 501-660: 11.03%
Moreover, the average credit score for borrowers in 2021 was 665, providing an average interest rate of 6.61%.
Before you apply for car loans, check your credit report to see what your score is and what’s on your report. Pay off any derogatory accounts or delinquencies as necessary. After that, apply for preapproval to see what a lender is willing to offer you in terms of interest rate.
If you want to save some cash to pay off high-interest debt, you can lower your car insurance bill using 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 great rate for your new vehicle, Jerry can help you buy your new coverage and even cancel your old policy!View full answer
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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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