What is the Average Interest Rate for a Car Loan with Bad Credit?
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If you’re looking for a car loan with bad credit, you might be wondering what the average interest rate is. We’ve got the answer, along with some tips on how to get the best rate possible.
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Introduction
Bad credit can make it difficult to get a car loan with a favorable interest rate. But it’s not impossible. Here’s what you need to know about getting a car loan with bad credit, including average interest rates and ways to improve your credit score.
The Average Interest Rate for a Car Loan with Bad Credit
Auto loan interest rates have been on the rise since the beginning of 2019. For consumers with bad credit, the average interest rate for a new-car loan was 13.92% for the first quarter of 2019, according to Experian data. That’s an increase of more than one percentage point from the fourth quarter of 2018, when the average rate was 12.85%.
How to Get the Best Interest Rate for a Car Loan with Bad Credit
When you have bad credit, it’s important to shop around for the best interest rate on a car loan. The average interest rate for a car loan with bad credit is higher than the average rate for a conventional loan. That’s because lenders see borrowers with bad credit as higher-risk customers.
To get the best interest rate on a car loan with bad credit, you’ll need to compare offers from multiple lenders. Start by checking the rates offered by online lenders, credit unions, and banks. Then, compare those rates to the rates offered by dealership financing departments. Be sure to compare offers from multiple lenders to ensure you’re getting the best deal possible.
Conclusion
While it is possible to get a car loan with bad credit, it is important to understand that you will likely have to pay a higher interest rate. This is because lenders see borrowers with bad credit as higher-risk, and thus, are less likely to offer them the best interest rates. However, there are still some things you can do to lower your interest rate, such as shopping around for loans, getting a cosigner, or improving your credit score.
