Best Auto Loan Rates with a Credit Score of 400 to 409


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By Mark B. Huntley, Esq.

Last updated 11/04/2019


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Summary:  A review of the best auto loan rates for new, used & refinanced vehicles based on credit scores between 400 to 409.

Your credit score will play a big factor if you are looking to get the best rates for an auto loan in 2019 or just to qualify for an auto loan.

It is possible to get the best car loan rates with a deep subprime credit score in the range of 300 to 499.

And I am going to tell you how! 

To get the best auto loan interest rates you will need to make some important choices about your financing options.

The first decision you will need to make is if you will be getting your car loan from the dealership, a bank, credit union, or an online lender.

Current Auto Loan Interest Rates 

Current Dates

60 Month new car

48 Month New Car

36 Month Used Car

11/20/2019

4.59%

4.54%

5.10%

11/13/2019

4.59%

4.55%

5.11%

11/6/2019

4.59%

4.55%

5.11%

10/31/2019

4.61%

4.58%

5.11%

10/23/2019

4.61%

4.57%

5.11%

10/16/2019

4.61%

4.57%

5.11%

10/9/2019

4.63%

4.60%

5.12%

10/2/2019

4.61%

4.57%

5.15%

9/25/2019

4.61%

4.57%

5.15%

9/18/2019

4.62%

4.58%

5.13%

9/11/2019

4.62%

4.58%

5.13%

9/4/2019

4.58%

4.54%

5.09%

8/28/2019

4.63%

4.58%

5.14%

8/21/2019

4.63%

4.59%

5.16%

8/14/2019

4.63%

4.59%

5.16%

8/7/2019

4.66%

4.60%

5.17%

7/31/2019

4.66%

4.60%

5.17%

Car loan interest rates provided by Bankrate.

Second, you need to understand that the best interest rates vary between the loan types, new auto loans, used auto loans, and refinance auto loans.

Third, the size of your car loan and the length will determine your monthly payment amount with loan approval contingent on your income. 

Last, we will discuss our three top recommendations to increase your credit score quickly. 

It may be difficult to qualify for auto financing with a credit score between 300 and 499. 

Luckily, with just a little work, lower scores like 401 or 403 can easily be increased a 100 plus points in a very short period of time. 

Below are the three top credit building tools we would recommend you use to raise your credit score before applying for a car loan with a credit score around 402 or 404.

Disclaimer: "Credit score" refers to FICO score in this article.  If you have a different score (i.e. VantageScore), that does not likely equal your FICO.  For example, a 402 VantageScore could equal any FICO score... 401, 406, 407?  Who knows?  You can get your FICO score here.

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Auto Loan Rates For A New Car - 400 to 409 Credit Score

Don't be tricked into applying for the click bait advertisements promising unbelievably low APR percentage rates on your next new car auto loan.

But, if we are being honest, those rates are for people with credit scores in the 800's, not for people with a credit score closer to 405. 

If you inquire they will tell you that they are sure you qualify but will have to double check. 

Then it gets worse! 

Most of these companies are using deceptive advertising practices to lure you in and  charge you a much higher interest rates than what you could have gotten from a reputable lender. 

It is impossible for a lender to even guess what interest rate you will qualify for until they perform a soft pull on your credit file and see your credit score. 

The interest rates we use in our sample auto loan monthly payment charts, are current rates for subprime borrowers, like you, with credit scores in the 400's, such as 402, 403, and 407.

If you have a credit score in between 400 and 409 than this article was written just for you!  

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If you have a credit score around 402 to 405, it is considered a deep subprime credit score, which includes ranges from 300 to 499.

Generally, all people in this credit range will be offered similar interest rates.

If you are offered any car financing at all, one way to increase your credit score would be to check out our article on 55 Easy Ways To Improve Your Credit Score

As you move into the subprime market with your credit score rising to 500 to 599, you may find vehicle financing more accessible.  

Estimated Monthly Payments For New Car Loan Of $20,000 by Credit Score

Credit Score

3 Year 

(36 months)

5 Year

(60 months)

7 Year

(84 months)

400

$701

$483

$394

401

$701

$483

$394

402

$701

$483

$394

403

$701

$483

$394

404

$701

$483

$394

405

$701

$483

$394

406

$701

$483

$394

407

$701

$483

$394

408

$701

$483

$394

409

$701

$483

$394

*Sample Quote For Credit Scores of 400 to 409.  Single digit credit score changes don't change the payment, so a 401, 405, 407  and 408 score should all cost the same.   Assumes $2,000 down payment.  Scores sourced from MyAutoLoan.com  site and are accurate as of 10/14/19.  All loan payment amounts are based on a new car loan APR interest rate of 15.72% for deep sub prime borrowers with a credit score of 300 to 499.  The loan terms included in this chart are for 3 years (36 months), 5 years (60 months), and 7 years (84 months). However, speak to your lender about additional loan options for new, used, or refinancing.  Don't forget to ask about their auto  loan payment terms that cover; 1 year (12 months), 2 years (24 months), 4 years (48 months), 6 years (72 months), 8 years (96 months), 9 years (108 months), and 10 years (120 months). This is not an offer for a loan or a loan approval. Rates and stipulations change by state, income, credit score, and a variety of other factors. For informational purposes only.  

Soft credit inquiry.  Up to 4 offers in minutes.

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Estimated Monthly Payments for Other New Car Loan Amounts (10k - 30k)

New Auto Loan Amount

3 Year 

(36 months)

5 Year

(60 months)

7 Year

(84 months)

$10,000

$350

$242

$197

$15,000

$525

$363

$296

$20,000

$700

$483

$394

$25,000

$875

$604

$493

$30,000

$1,051

$725

$591

Sample Quote For Credit Scores Of 404, 406, to 407, & 408: Assumes $2,000 down payment.  Scores sourced from MyAutoLoan.com site and are accurate as of 10/14/19.  All loan payment amounts are based on a new car loan APR interest rate of 15.72% for subprime borrowers with a credit score of 300 to 499.  The loan terms included in this chart are for 3 years (36 months), 5 years (60 months), and 7 years (84 months). However, speak to your lender about additional loan options for new, used, or refinancing. Don't forget to ask about their car loan payment terms that cover; 1 year (12 months), 2 years (24 months), 4 years (48 months), 6 years (72 months), 8 years (96 months), 9 years (108 months), and 10 years (120 months). This is not an offer for a loan or a loan approval. Rates and stipulations change by state, income, credit score, and a variety of other factors. For informational purposes only.  

Soft credit inquiry.  Up to 4 offers in minutes.

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Best Used Car Rates - 400 to 409 Credit Score

Grandpa always said that as soon as you buy a new car and drive it off the lot, it loses thousands of dollars in value. 

Stands to reason, that getting the best used car rates should further help save you potentially thousands of dollars by choosing to purchase a used car over a new one.

But here's the thing... 

If your credit score is in the 400's, you may not qualify for a deep subprime APR rate.

You may want to consider hiring a Credit Repair Service to help improve your credit score fast before applying for a car loan with a credit score around 403 or 406.

Used Auto Loan Amount

3 Year 

(36 months)

5 Year

(60 months)

7 Year

(84 months)

$10,000

$344

$235

$190

$15,000

$516

$352

$285

$20,000

$688

$470

$379

$25,000

$859

$587

$474

$30,000

$1,031

$704

$569

Sample Quote For Credit Scores Of 401, 402, to 405, & 407: Assumes $2,000 down payment.  Scores sourced from MyAutoLoan.com site and are accurate as of 10/14/19.  All loan payment amounts are based on a used car loan APR interest rate of 14.41% for deep subprime borrowers with a credit score of 300 to 499.  The loan terms included in this chart are for 3 years (36 months), 5 years (60 months), and 7 years (84 months). However, speak to your lender about additional loan options, including mortgage loan terms that cover; 1 year (12 months), 2 years (24 months), 4 years (48 months), 6 years (72 months), 8 years (96 months), 9 years (108 months), and 10 years (120 months). This is not an offer for a loan or a loan approval. Rates and stipulations change by state, income, credit score, and a variety of other factors. For informational purposes only.  

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Soft credit inquiry.  Up to 4 offers in minutes.

Top Auto Refinance Rates

Say you have a credit score of 403 or 409...

You can definitely refinance with this score!

A lot of people miss out on an opportunity to save themselves some money by not considering auto refinancing with a credit score over 600.

The interest rate you initially locked in at the time you purchased your car was based on your credit score at that time and the Federal prime interest rate when you financed your vehicle.

If either of those two factors has changed in your favor, you may be able to refinance with a lower interest rate and save a bunch of money and interest by replacing your old high-interest rate loan.

Did you know?


48% of credit repair customers saw a 100 point or more credit score increase after 6 months. 

U.S. Credit Repair Survey (Oct '19) 

Depending on the APR of your original loan, you may also be able to keep the original loan payment amount, but cut multiple months or even a year off of the length of time you will have to pay off your loan.

Please note that while we're talking about some specific credit scores over 400 in this article, single digits shouldn't impact your refinance decision.  

In other words, whether your score is 403 or 404, or even on the higher end of our range like 409, your resulting rates will likely be very similar. 

Auto loan interest rates are at a historic new low and virtually anyone who received an auto loan in the last couple of years can save money by refinancing today!

Refinance Auto Loan Amount

2 Year 

(24 months)

4 Year

(48 months)

6 Year

(72 months)

$10,000

$474

$267

$199

$15,000

$711

$400

$299

$20,000

$948

$533

$398

$25,000

$1,185

$667

$498

$30,000

$1,422

$800

$597

Sample Quote For Credit Scores Of 402, 404, to 405, & 407: Assumes no down payment.  Scores sourced from MyAutoLoan.com and are accurate as of 10/14/19.  All loan payment amounts are based on a refinance car loan with an APR interest rate of 12.68% for deep subprime borrowers with a credit score of 300 to 499.  The loan terms included in this chart are for 2 years (24 months), 4 years (48 months), 6 years (72 months). However, speak to your lender about additional  refinancing loan options, including loan terms that cover; 1 year (12 months),  3 years (36 months), 5 years (60 months), and 7 years (84 months), 8 years (96 months), 9 years (108 months), and 10 years (120 months). This is not an offer for a loan or a loan approval. Rates and stipulations change by state, income, credit score, and a variety of other factors. For informational purposes only.  

Soft credit inquiry.  Up to 4 offers in minutes.

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Who has the Best Auto Loan Rates? Credit Unions, Banks, or Online Lenders

Trying to figure out who has the best auto loan rates can feel like an impossible task.

It is natural to want to use your local Credit Union or Bank because you feel loyalty to the financial institution who you trust with your monthly banking needs.

In some instances, going directly through your Credit Union or Bank can be your best bet for the lowest interest rates.

However, local Credit Unions and Banks often times are limited on the loan programs they can offer or can't compete with the lowest online auto loan rates.

You also have to consider the time it takes to go to your local financial institution to obtain a quote for an auto loan.

It seems like for the past 20 years, Banks and Credit Unions have been cutting the numbers of employees there to help you and have been replacing them with fancy ATM machines.

Be Careful!

Be careful if you get an auto loan from a Credit Union or Bank that you have a checking, savings, or CD account with. Some financial institutions require you to sign a document allowing them to take payment without your permission if you do not pay.

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In comparison, you can obtain four loan offers within two minutes of filling out a short, one-page application with LendingTree.

Even if you decide to see what your Bank or Credit Union has to offer, getting an online lender quote is free and takes next to no time.

Purchasing a car can be a stressful endeavor because of all the decisions you must make with that ‘helpful’ high-pressure car salesman stuck to your hip.  

A great way to help alleviate some of that pressure and stress is by getting pre-approved for an auto loan long before you walk onto the car dealership lot.

Many people do not realize that they do not have to use the dealership's financing options.

In fact, according to U.S. News...

“Having the entire car-buying process neatly bundled into one transaction...makes purchasing easy. However, it’s a horrible way to buy a car if you want to get a good deal. It’s a common dealer trick to keep you focused solely on the monthly payment while they manipulate the trade-in value, vehicle price, and car loan terms. In most cases, they make a significant portion of their profit on the sale by marking up the cost of the car loans you are offered.”

 Typically the better financial move is to shop for the best auto rates online, get a pre-approval letter, and take that to the dealer where you want to buy your car.

Soft credit inquiry.  Up to 4 offers in minutes.

Best Online Auto Loan Rates By State

Whether you live in California or Texas, we have found the best online auto loans by state for you. 

If you want to get the best possible car loan rates in your state...

Simply click on the state that you live in below and  fill out a quick, free, no-obligation application to start driving your new car! 

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5 Non-Credit Factors that Affect Your Monthly Payment

Let’s not assume your credit is the ONLY variable in getting you a great auto rate.  

As you’ve already seen, your monthly payment will differ if you’re looking at a new vs used car, if it’s a refinance, or based on the length of the loan.

For example, you might have a credit score of 404, but wouldn’t be able to qualify for the rates above due to the following five factors.

Income & Debt-to-Income

A key factor in how much a lender is willing to lend you is how much monthly income you have, even if your credit score is 401 or 408.

The relationship between the amount of money you make in a month and the amount of your monthly bills is called your debt to income ratio aka DTI.

Most lenders do not want your debt to income ratio to exceed 36-40% for an Auto Loan according to Pocket Sense

This means your total expenses, which will include your proposed monthly auto loan, will need to be within 40% of your DTI.

If your DTI is higher, then lenders may require you make a larger down payment and/or charge you a higher interest rate for the additional risk of lending someone money with a high debt to income ratio.

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3 Steps To Calculate Debt-To-Income Ratio

1.

Add up all of your monthly bills including rent, car payments, student loans, utilities, etc.

2.

Divide your total monthly bills by your total monthly income

3.

The resulting number is your debt-to-income ratio

For example:

If I have $5,000 in monthly income and $2,000 in monthly expenses and I divided the monthly expenses 2k by monthly income 5k, I would have a 40% DTI. 

There are multiple debt-to-income ratio calculators on the internet.  I like the free one provided by Credit.com 

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The “Right” Credit Score

You may have visited this article thinking you have a FICO score somewhere in the 400 - 409 range.  

The truth is, depending on where you checked your score, you may not be using the same score the auto lenders use.  

In the U.S. today most people receive a free credit score with their credit card services or other financial institution supported websites such as Chase Credit Journey. 

The problem with these credit scores is that they are usually a "FAKO" score, not a FICO score.

FAKO scores, such as Vantage, intended use is for educational purposes and not to be relied upon for financial decisions.

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The largest producer of FAKO scores is the VantageScore 3.0 (they are launching 4.0 soon). 

What’s the difference?

Well, both FICO and Vantage pull your credit history from the big three credit agencies; Experian, Equifax, and TransUnion, to calculate your credit scores.

However, the credit scores that FICO generates from your account history at the three credit bureaus are used to assess the risk of a borrower by 90% of lenders in the U.S. 

The VantageScore 3.0 is given away free on websites like Credit Karma and in 2018 was prohibited from being used by Fannie Mae and Freddie Mack for real estate mortgages.

Consequently, as you can imagine, the Vantage credit score can be volatile and inaccurate.

For example, according to CreditCards.com, the average VantageScore in California is 712 to 722.

Which means that the credit score you think you have right, now may not be an accurate credit score at all. 

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You might thing you have a credit score of 407, but in reality, your FICO could be over 550.  

You may even qualify for a super prime loan and have wasted your time reading this article.

To get a truly Free Credit Score you can read our definitive guide on free credit scores. 

You can learn your true FICO credit scores for Experian, Equifax, and TransUnion; by visiting MyFICO and signing up today! 

Soft credit inquiry.  Up to 4 offers in minutes.

Employment

Regardless of your credit score, even if it is in the 400's... say 404, lenders want to see that you have a good employment history.

Frequently, when people are younger and in their late teens or early 20’s they will change jobs often.

This is a red flag to a lender who wants to be able to check the box next to ‘reliable income’ whereas if you are constantly changing jobs, that may not be the case.

To avoid being denied an auto loan due to shaky employment you will need to stay at your jobs for a longer period of time.  

Additional Resources





Disclaimers:

Annual Percentage Rates (APR), loan term and monthly payments are estimated based on analysis of information provided by you, data provided by lenders, and publicly available information. All loan information is presented without warranty, and the estimated APR and other terms are not binding in any way. Lenders provide loans with a range of APRs depending on borrowers' credit and other factors. Keep in mind that only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend on factors like credit score, requested loan amount, loan term, and credit history. All loans are subject to credit review and approval.

Down Payment

The amount of your down payment will depend on whether you are purchasing a new or used vehicle.  It doesn’t matter if your credit score is a 405 or 406.

Remember earlier how I mentioned that Grandpa always said that when you drive a new car off the lot it loses thousands of dollars in value?

Well, lenders think so too and because of the quick depreciation when the vehicle leaves the dealership they usually require a 20% down payment for a new car loan.

If you are in the market for a used vehicle and planning on financing the purchase, you will need to expect to put down 10%.

Normally there is no down payment on an auto loan refinance.

Want to know the best part?

You can use your vehicle trade-in towards that down payment.

Hopefully, you have some equity in the value of your existing whip and are able to simply trade-in the old car and not have to come out of pocket to make the down payment for the new one.

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Improving your credit score

With a credit score between 400 and 409, you are going to qualify for prime loans at a higher interest rate than if you were able to increase your credit score to 400+.

Because you are so close to receiving super prime credit score rates it may make sense to consider spending 30, 60, or 90 days building your credit

The time and money spent would put you in a lower risk bracket and open the doors to much more financial freedom and better opportunities.

You can start by checking out our 90 day Credit Sprint for a personalized credit building plan.  I know it works because I personally increased my credit score over 100 points in under 60 days.

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Another option to get a vehicle loan with a lower interest rate would be to ask a family member to co-sign on the loan.

The co-signer would become the primary borrower and you would be the secondary borrower.

They would be responsible for making the payments on the loan if you failed to do so, but you would qualify for an auto loan based on their credit score and not yours.

If you know someone with a good credit score, it may not hurt to ask them to be your co-signer.  

Soft credit inquiry.  Up to 4 offers in minutes.

Take Action!

Finding the best auto loan rates can save you thousands of dollars over the life of your car loan. 

There are multiple factors we have reviewed that determine how to get the best interest rates for a vehicle loan.

The first step is to fill out a quick, free, no-obligation application and start your pre-approval process to buying that car of your dreams today! 

We hope this article answered all of the following questions:

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