Rates on Car Loans for Fair Credit

Q: What is a good APR for a car with a 650 credit score?

A good APR for a car loan is one that’s better than the industry average. Borrowers with fair credit scores between 601 and 660 had an average 8.99% APR on new car loans and 13.49% APR on used car loans in the second quarter of 2023, according to Experian.

Q: Can you get a $40K car loan with a 650 credit score?

Yes, some lenders may offer $40,000 in auto loan financing to borrowers with fair credit scores of 650. New car loan borrowers with near-prime credit scores between 601 and 660 financed an average of $43,807 in Q2 2023, according to Experian data.

Q: Can you finance a car with a 640 credit score?

Yes, certain lenders may offer new and used car loan financing to borrowers with fair or bad credit. A number of borrowers with deep subprime credit scores between 300 and 500 have financed their car purchases with auto loans in Q2 2023, data show.

Q: Can I refinance my auto loan with a credit score of 650?

Yes, you can refinance your auto loan with a credit score of 650. A small percentage of borrowers with deep subprime credit scores between 300 and 500 received used car loan financing in the second quarter of 2023. If borrowers with deep subprime credit scores can access used car financing, it’s clear that other borrowers with a 650 credit score can refinance auto loan debt.

Q: What is the maximum car loan I can get with a 650 credit score?

The maximum car loan you can get with a 650 credit score is greater than $40,000. Borrowers with near-prime credit scores between 601 and 660 secured an average car loan amount of $43,807 in Q2 2023, according to Experian data.

650 Credit Score Car Loan - Is It Possible to Refinance?

Sulaiman Abdur-RahmanUpdated October 11, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

A fair credit score of 650 is generally sufficient for getting a new or used car loan. Consumers with a 650 credit score are classified as near prime or nonprime. You might not qualify for the best annual percentage rates (APRs) with a 650 credit score, but you may qualify for auto loan refinancing.Auto refinancing pays off your original car loan and replaces it with new lending terms. Refinancing may be right for you if you need a lower monthly payment or lower interest costs over the life of your loan. (You may pay more interest over the life of the loan if you refinance with an extended term.)Below we highlight how lenders may view a 650 credit score for a car loan.

Is It Possible To Get a Car Loan With a 650 Credit Score?

Getting a car loan with a 650 credit score is possible and not unusual for consumers with fair credit. Experian® data show 12.94% of new car loan distributions and 21.24% of used car loan distributions in the second quarter (Q2) of 2023 went to borrowers with near-prime credit scores ranging from 601 to 660.Some of the major credit scoring models, including VantageScore® 4.0 and base FICO® Scores, range from 300 to 850. A 650 credit score is generally considered near prime, nonprime, and fair. It’s possible to get a car loan with a 650 credit score, but most car loan borrowers in Q2 2023 had a good credit score above 660.

What Is a 650 Credit Score?

A 650 credit score is generally fair and nonprime, as the table below shows:

Credit score range	Risk category	Description
781–850	Super prime	The borrower has excellent credit
661–780	Prime	The borrower has good credit
601–660	Nonprime or near prime	The borrower has fair credit
501–600	Subprime	The borrower has poor credit
300–500	Deep subprime	The borrower has very poor credit

How Do Lenders View a 650 Credit Score for a Car Loan?

Lenders may view a 650 credit score as creditworthy but not necessarily worthy of the best terms and conditions for a car loan. Borrowers with a 650 credit score may pay higher finance charges on a car loan than borrowers with prime or super prime credit scores. Experian data show near-prime borrowers in Q2 2023 had an average car loan rate of 8.99% on new vehicle financing. The average loan rate for prime borrowers stood at 6.44% and 5.07% for super prime borrowers who had financed new vehicles that quarter.Lenders generally offer the best rates of interest to borrowers with excellent credit, and this highlights the importance of credit scores. Subprime borrowers in Q2 2023 had an average car loan rate of 11.72% on new vehicle financing, while deep subprime borrowers had an average rate of 14.18%.Lenders may view a 650 credit score as being near prime, which is generally good enough for borrowers to qualify for financing.

650 Credit Score Auto Loan Interest Rates

As mentioned earlier, a 650 credit score is typically considered near prime, nonprime, and fair. Experian data show near-prime borrowers in Q2 2023 had an average car loan rate of 8.99% on new vehicle financing and 13.49% on used vehicle financing. Lenders typically offer better auto loan interest rates when financing new vehicles.As a consumer, you may wonder whether and when to refinance an auto loan. Refinancing might be right for you if you can secure a lower interest rate or if you need a lower monthly payment.Recommended: Refinancing a Car Loan With the Same Lender

650 Credit Score Car Loan Terms

Borrowers with near-prime credit scores had an average car loan term of 74.2 months for new vehicle financing in Q2 2023. Near-prime borrowers who secured used vehicle financing that quarter had an average car loan term of 68.34 months, data show.The near-prime credit risk category includes consumers with a credit score at or near 650. Car loan terms can range from one year to more than 85 months, including 144-month car loans. Longer terms may include higher interest rates and lower monthly payments compared with shorter terms.

3 Fair Credit Score Car Loan Refinance Lenders

Here are some lenders who may offer auto refinancing to borrowers with fair credit:

1. Caribou

Caribou is a fintech company that operates an online platform that helps connect borrowers with auto loan refinance lenders.

Lender	Pros	Cons
Caribou	Online platform is simple to use	Refinance offers are not available in every state, including Maryland, Mississippi, Nebraska, Nevada, and West Virginia

2. LendingClub

LendingClub is a digital marketplace bank that offers secured auto refinance loans to consumers.

Lender	Pros	Cons
LendingClub	No origination fees and no prepayment penalties	Typical customers have high incomes above $100K and high FICO Scores above 700

3. Upgrade

Upgrade is a financial technology company that offers auto refinance loans made by its bank partners.

Lender	Pros	Cons
Upgrade	User-friendly process guides customers through the loan and title transfer process	Can take up to two weeks for Upgrade to pay off your creditor

Factors That Impact on Auto Refinancing Approval

Here are some factors that can impact auto refinancing approval:

Credit Score

Lenders of auto refinance loans may consider the credit score of the borrower when determining whether or not to approve a loan refinancing request. Some borrowers with bad credit may not qualify. There’s also a cost to refinance a car, and applying for auto refinancing can hurt your credit score if the lender conducts a hard inquiry credit pull.

Debt-to-income Ratio

Banks, credit unions, and nonbank financial institutions generally like to see a debt-to-income ratio below 36%. Borrowers with high DTIs may have a harder time getting approved for auto loan refinancing than borrowers with low DTIs. That’s because DTI ratios help lenders evaluate an applicant’s ability to manage existing debt and future loan payments.

Income

Lenders generally require borrowers to have a steady income to qualify for auto loan refinancing. Borrowers with an annual income below $18,000 may have difficulty getting approved.

650 Credit Score Car Loan Repayment Schedule

Consumers with a 650 credit score may qualify for auto loan terms ranging from a few years to more than 85 months.Term length and APR can affect your loan repayment schedule in terms of how much you pay each month. For example, an 8.99% APR car loan of $37K with a five-year term would feature 60 fixed monthly payments of $767.88. Borrowers are expected to make on-time payments over the life of the loan.

Applying for a 650 Credit Score Car Loan

Consumers with fair credit scores can apply for car loan financing through banks, credit unions, nonbank financial institutions, or dealerships. A consumer with a 650 credit score may qualify for auto loan financing, but nonprime consumers usually don’t qualify for the best rates.You can explore auto refinancing for a lower APR, although you may pay more interest over the life of the loan if you refinance with an extended term. How soon can you refinance an auto loan? You may have the option to refinance almost immediately.

The Takeaway

A 650 credit score is better than subprime, but it’s still below the general threshold of good credit. Borrowers with fair credit scores may have access to near-prime car loans.If you’re interested in refinancing an auto loan, Lantern by SoFi can help. Just fill out one simple form to access loan offers from multiple lenders in our marketplace.Lantern can help you compare prequalified rate offers in minutes.

Frequently Asked Questions

What is a good APR for a car with a 650 credit score?

Can you get a $40K car loan with a 650 credit score?

Can you finance a car with a 640 credit score?

Can I refinance my auto loan with a credit score of 650?

What is the maximum car loan I can get with a 650 credit score?

Photo credit: iStock/dragana991

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About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.

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