But nearly 20% of car loans go to borrowers with credit scores below 600, according to Experian.
Almost 4% go to those with scores below 500.” While you’ll likely be able to get an auto loan with less-than-stellar credit, it might have a pretty significant impact on the loan terms and/or rate that you receive.
Does credit score affect auto loan?
How Does Credit Score Affect Car Loans? Those with very good credit scores will typically qualify for low interest rate loans and in some cases may qualify for 0% financing. Those with lower credit scores will be faced with higher interest rates. Your credit score may also affect your down payment amount.
What is the relationship between credit score and interest rate on car payments?
A higher credit score is necessary when buying a car with no money down. A loan with a 100% loan to value ratio raises risks to lenders. It also increases the principal amount. Therefore, they will require better qualifications, or charge higher interest rates.
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