How does a lender decide what interest rate to offer me on an auto loan?
An auto lender will typically consider several main factors:
- Your credit score and credit history
- Your income and debts
- The amount of the loan
- The length of time you’ll be paying back the loan, called the “loan term” or “term of the loan"
- The amount of your down payment as a percentage of the value of the vehicle
- The type of vehicle and whether you are purchasing a new or used vehicle