Do you have a credit score of around 650? This means you have Tier 3 or Tier C credit, depending on the lender, but you’re at the upper end of the range. Your credit is not considered “bad” – that’s reserved for scores of 620 and lower – but it is considered sub-prime. That could make it slightly more difficult to get approved for a car loan at an affordable rate.
Fortunately, we can help.
We work with thousands of dealers and finance companies across the nation who fund auto loans on a regular basis for people with credit scores in the 650 range. All you have to do is apply online. Your application will enter our placement system, and if you have adequate monthly income – typically $1500 or more per month – chances are better than 90% that we’ll have you approved for financing in less than 24 hours.
Auto Loan Rates for 650 Credit Score
It is very difficult to provide specifics when it comes to interest rates. After all, your rate of interest will depend on a whole multitude of factors, including your location, lender, loan type, loan length, and income. However, we can provide a few generalizations based on our years of experience in the industry. For someone with a credit score of roughly 650, the APR rates to expect would fall into the following ranges:
- 48-Month Used Car Loan: 9.5% to 13.5% APR
- 48-Month New Car Loan: 7% to 10.5% APR
Longer loans will have slightly higher rates, though the difference is minimal. Keep in mind, these are only approximations. Your actual rate will vary. Rates for used vehicles are always higher. However, pre-owned vehicles have their own advantages, including lower purchase price and rate of depreciation. We
Can a Car Loan Improve My Credit Score?
Given a score of 650, you’ve probably had a few slip-ups in terms of debt repayment or unpaid bills, but nothing too major like bankruptcy or repossession. Still, getting your score into the 700’s could save you a lot of money in the long run. Here’s the good news: a paid-as-agreed vehicle loan will improve your scores. That’s because it’s a significant debt to take on, and paying it off as agreed displays a good deal of financial responsibility – just the kind of thing a lender is looking for in a borrower. Your score will not just magically go up the moment you pay off the loan. Rather, your history of on-time monthly payments is the important factor, not the pay-off even itself. Therefore, your scores will gradually improve as you pay off the loan.
How Long Should My Term Length Be?
Good question. American consumers have been stretching out their financing terms in recent years. For new vehicles, the average term length is over 60 months. However, we advise people to opt for the shortest financing term possible. Sure, your monthly payments will be higher, but you will pay less in total interest. Additionally, you’ll have less risk of a negative equity situation. That’s because your loan pay-off and vehicle depreciation are in a constant race. The faster you pay off your loan, the less risk you’ll have that your vehicle will be worth less than you owe. Obviously, nobody wants to be underwater on their new car.