🚗 Auto Loan Calculator

Credit score requirements vary by lender, but here's what you can typically expect:

• Excellent (781-850): Best rates (4-6% APR)
• Good (661-780): Competitive rates (6-9% APR)
• Fair (601-660): Higher rates (9-15% APR)
• Poor (501-600): Subprime rates (15-20%+ APR)
• Very Poor (300-500): May need cosigner or special financing

Tip: Check your credit score for free before applying. A 100-point increase could save you thousands in interest.

Both options have pros and cons. Here's a comparison:

• Bank/Credit Union: Often lower rates, pre-approval gives negotiating power, no pressure sales tactics
• Dealership: Convenient one-stop shopping, special manufacturer incentives (0% APR), may work with bad credit

Best strategy: Get pre-approved from your bank or credit union first, then see if the dealership can beat the rate. Always compare the APR, not just the monthly payment.

Loan terms typically range from 24 to 84 months. Consider these factors:

• 36 months or less: Highest payments, lowest interest, fastest equity building
• 48-60 months: Balanced approach, most common choice
• 72-84 months: Lower payments but more interest, risk of being "upside down" (owing more than car's value)

Recommendation: Choose the shortest term you can comfortably afford. A 60-month loan is often the sweet spot for most buyers.

Financial experts recommend putting 20% down on a new car and 10% down on a used car. For a $35,000 car:

• Ideal down payment: $7,000 (20%) for new, $3,500 (10%) for used
• Minimum down payment: $1,000-2,000 for most lenders
• Zero down: Possible but higher monthly payments and more interest

Benefits of larger down payment: lower monthly payments, less interest paid, avoid gap insurance, and never be upside down on the loan.

Your trade-in reduces the amount you need to finance. For example:

• New car price: $40,000
• Trade-in value: $15,000
• Amount to finance: $25,000 (plus tax, fees)

If you owe money on your trade-in: The remaining balance gets added to your new loan (negative equity). This can put you at risk of being upside down.

Pro tip: Research your car's value on Kelley Blue Book or Edmunds before negotiating. Clean your car and fix minor issues to maximize trade-in value.

GAP insurance covers the difference between what you owe and what your car is worth if it's totaled or stolen. You might need GAP insurance if:

• You made less than 20% down payment
• Your loan term is longer than 60 months
• You rolled negative equity from a previous car
• You bought a car that depreciates quickly

Cost: $200-700 one-time or $5-10 per month. Often cheaper through your insurance company than the dealership. Skip GAP if you have a large down payment or short loan term.