Generally, if you have a credit score of 700+, then you have a very good chance of finding a good credit car loan. Since lenders are going to see you as a relatively low risk borrower, they will be more willing not only to extend you credit, but to compete amongst themselves for your business, offering competitive interest rates and financing options.
Car Loans for Good Credit Borrowers
If your credit score places you in the upper tiers of credit applicants, you will be a candidate for several financing and purchasing options reserved for “Well-Qualified Buyers” — though defined differently by different parties, well-qualified buyers typically have a nearly ideal combination of credit score, debt repayment history, and debt-to-credit ratio. Several of the special offers for which you may qualify include:
- 0% Auto Loans
- New Car Rebates
- No Money Down
Even if you don’t quite qualify for highly-exclusive offers such as 0% auto loans, your clean credit history and high score will mean low interest rate auto loans.
How Much Could Good Credit Save You?
Many consumers don’t realize just how much a low APR can save them on the vehicle they are financing. Let’s look at an example to illustrate. As of the time of this writing, the national average APR on a 48-month used car loan for someone with a FICO score of 720-850 is 4.356%. The average APR on the same loan for someone with a score of 620-659 is 13.925%. That’s a huge difference in terms of percentage points, but what does it translate to over the life of loan?
Let’s look at a $20,000 loan as an example. The person with the 720+ credit score will pay $1829 in interest over the course of the four years it takes to pay off their purchase. The person with lower credit? They will pay $6197! And if their credit was even lower – say less than 620 (“bad credit”) – they would pay $8000 to $9000+ in interest – on a $20,000 loan! The person with good credit would pay just $38 in interest per month, while the person with subprime credit would pay at least $129 – nearly $100 more per month, simply because their credit score wasn’t as high.
Ensuring You Get The APR Rate You Deserve
You’ve worked hard to retain a favorable credit rating, and it’s important to make the most of it. That means ensuring you get the interest rate you deserve. Even the most reputable lenders will not always offer you their lowest rate – not if they can tell you don’t know any better. The key is educating yourself about the current lending climate. Unfortunately, it can be really, really difficult to find the current, average rates for each credit tier in your area. There is no central resource for this information, and it is not as transparent as the mortgage lending industry. Rates vary based on loan type, location, and credit score.
Fortunately, we can tell you where to look. We recommend utilizing this calculator offered by myFICO. Simply select the type of loan you’re looking for, and the amount. Don’t forget your state as well. The calculator will give you the average rate based on these factors. You can now use this when negotiating with your lender or dealer for the best rate possible.
The My Car Lender Advantage
So you know what your interest rate should be, and you’re ready to find a loan. But how? We can help. We have direct and indirect relationships with hundreds of lenders across the nation. These include banks, credit unions, dealers, and auto finance companies. When you apply through our network, we place your application with a lender who is ready and willing to fund your loan. You can be sure that your application profile matches their approval criteria, and there are no fees or obligations for our service. We work on behalf of our lenders. The service is fast, friendly, and you could be driving your newly financed vehicle in as little as one day.
Apply for Good Credit Car Loans from Local Lenders!