Highest APR Car Loan (2024)

FAQs

What is the highest legal APR on a car loan? ›

The law says that lenders cannot charge more than 16 percent interest rate on loans. Unfortunately, some lending companies owned by or affiliated with vehicle makers have devised schemes whereby you are charged interest at rates exceeding the maximum permitted by law. This is called usury.

The law says that the most a lender can charge for an auto loan are about 16% APR, but some lenders get away with 25% or more. Your annual percentage rate (APR) for a car loan depends on your credit score and whether you want a new or used car.

Among others, these factors typically include credit history, amount financed, length of the term, age of collateral, vehicle, and the down payment. The better your credit, the lower the interest rate. Buyers with stellar credit may qualify for attractive APRs; new car manufacturer offers can be as low as 0%.

A 24.99% APR is not good for mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay and what most lenders will even offer. A 24.99% APR is reasonable for personal loans and credit cards, however, particularly for people with below-average credit.

a. The Basic Rate: The California Constitution allows parties to contract for interest on a loan primarily for personal, family or household purposes at a rate not exceeding 10% per year.

Every state has its own usury laws that determine the maximum rates of interest that are allowed on loans. Under usury laws, a lender is not permitted to charge an outrageous interest rate. If an individual is charged an exorbitant or illegally high interest rate, they may be a victim of usury.

An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.

Car Loan APRs by Credit Score

Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used.

Yes, just like the price of the vehicle, the interest rate is negotiable. Dealers may not offer you the lowest rate that you qualify for.

Provided the down payment is $5,000, the interest rate is 10%, and the loan length is five years, the monthly payment will be $531.18/month.

Can you pay off a 72 month car loan early? ›

Can you pay off a 72-month car loan early? Yes, you can pay off a 72- or 84-month auto loan early. Since these are long repayment terms, you could save considerable money by covering the interest related to a shorter period of time.

Yes, a 24% APR is high for a credit card. While many credit cards offer a range of interest rates, you'll qualify for lower rates with a higher credit score. Improving your credit score is a simple path to getting lower rates on your credit card.

Avoid loans with APRs higher than 10% (if possible)

“That is, effectively, borrowing money at a lower rate than you're able to make on that money.”

There's no federal regulation on the maximum interest rate that your issuer can charge you, though each state has its own approach to limiting interest rates. State usury laws often dictate the highest interest rate that can be charged on loans, but these often don't apply to credit card loans.

What is a good APR for a car loan with my credit score and desired vehicle? If you have excellent credit (750 or higher), the average auto loan rates are 5.07% for a new car and 5.32% for a used car. If you have good credit (700-749), the average auto loan rates are 6.02% for a new car and 6.27% for a used car.

Legally, there actually is no highest credit card interest rate that's possible. Credit card companies are allowed to charge any interest rate. But they must clearly state what that rate is in the card's terms and conditions.

Compare APRs for personal loans

Typically, personal loan APRs are from 6% to 36%.