Loan

Here’s what kind of car loan you can get depending on your credit score

If you’re shopping for a car and plan to finance your vehicle, you’ll want to consider your credit history and credit scores, which will help determine the kind of auto loan you’re eligible for and what kind of loan terms you might be offered. A good credit score can make a big difference.

Your credit score is the three-digit number that tells lenders how likely it is that you’ll pay back any money you borrow.

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It helps lenders decide whether they want to give you a loan and what kind of interest rate to offer. It’s based on information in your credit report, which is a record of how you’ve managed

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Auto loan approval ratings hit highest level since 2015

It hasn’t been this easy to get a car loan in years.

Why it matters: It comes amid a demand bonanza that got underway at the onset of the pandemic — when traveling by car became the more appealing mode of transportation.

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Car loan approval ratings are at the highest since 2015, according to Cox Automotive.

  • What’s happening: Auto loans are getting cheaper and lengthier, two factors that lower monthly payments — what “most consumers are focusing on, more than anything else,” says Cox Automotive economist Jonathan Smoke.

  • “Consumers have been consistently seeing better rates every month this year than a year ago — that’s really helped offset some of the inflation in vehicle prices,” Smoke says.

The big picture: The net percentage of banks making loans harder to get is at the

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What Percentage of Your Income Should Go Toward Auto Loan Payments?



a woman in a car: woman driving car smiling.


© lechatnoir / Getty Images
woman driving car smiling.

Housing expenses such as mortgage payments or rent and insurance are usually the biggest monthly line item in most people’s budgets. Not far behind are transportation costs, particularly if you own a car — and certainly if you finance your purchase.

See: 7 Crucial Things You Need To Apply For an Auto Loan

If you plan to get an auto loan, you need to first figure out the answer to the question “How much car can I afford?” Figure out how much you can afford to pay by calculating your monthly budget. Do this before you set foot in a dealer’s shiny showroom where they might try to seduce you into buying and financing more car than you can afford.

How Much of My Paycheck Should Go Toward Car Loan Payments?

You’ll hear different advice about how much you should allocate

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