A fair credit score of 650 generally seems to be 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.
Key Points
• A 650 credit score is considered fair and can qualify you for car loans, though rates may be higher than those for borrowers with excellent credit.
• The average interest rate for a borrower with a 650 credit score is 8.99% for new vehicles and 13.49% for used vehicles.
• Lenders often consider additional factors beyond credit score, such as income, employment history, and debt-to-income ratio, when approving car loans.
• Shopping around for the best rates and terms can help you secure a more favorable car loan, even with a 650 credit score.
• Building your credit score over time can lead to better loan terms and lower interest rates, making it a worthwhile goal for future financing.
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.
A credit score according to the major credit scoring models, including VantageScore® 4.0 and base FICO® Scores, can range from 300 to 850. A 650 credit score can be considered near prime, nonprime, and fair. It’s possible to get a car loan with a 650 credit score, but most car loan borrowers had a “good” credit score, which would mean it was above 660.
Recommended: Does Refinancing a Car Hurt Your Credit?
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.
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 a consumer, you may wonder whether and when to finance 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
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.
Factors That Affect 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.
Recommended: Car Payment With a Credit Card
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 seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.
FAQ
What is a good APR for a car with a 650 credit score?
A good APR is subjective. For a car loan, it’s one that’s better than the industry average.
Can you get a $40,000 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. The interest rates might not be as attractive as they would be with a good or excellent score.
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.
Can I refinance my car loan with a credit score of 650?
Yes, you can refinance your auto loan with a credit score of 650. 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.
Photo credit: iStock/Goran13
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