The Typical Bad Credit Auto Loan Rate: What to Expect

There is no “average” or “universal” bad credit auto loan rate because the rates levied will differ between different lenders and will be calculated according to different criteria which will again, differ between the different lenders. It stands to reason however that you can expect to pay higher rates when credit is less than perfect.

Do Your Research

Before you feel too despondent by this seemingly uphill struggle, just remember that variety and competition between the different providers is a good thing as it allows you the luxury of being able to choose a provider who offers the most flexible rate. In fact, given how strongly competitive the market is you may actually want to try negotiating with a lender and see if you can achieve some measure of success with them.

Secure vs. Unsecured

One factor that will have a direct impact on the bad credit auto loan rate you are eligible for is the actual nature of the loan. Generally speaking, secured loans (loans which require the borrower to place an asset as security) will carry with them a lower rate of interest because the lender already has some form of guarantee in the event that payment is not met for whatever reason. Conversely, unsecured loans whilst more flexible carry with them a higher rate of interest. 

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