What credit score is considered subprime for an auto loan?

Generally below 620 FICO. Subprime borrowers see APRs of 13-25% versus 5-7% for prime. Improving your score even 30-50 points before applying can save thousands over the life of a 5-year loan.

Should I take a subprime auto loan now or wait until my credit improves?

If you can wait 6-12 months and use that time to pay down credit card balances + dispute report errors, you'll almost always come out ahead. A 50-point FICO improvement typically saves more than $50/month on a typical $25K, 60-month loan.

All terms

Auto LoansGlossary

Subprime Auto Loan

A loan made to a borrower with a credit score typically below 620.

Subprime auto loans carry APRs of 13-25%+. They also have higher default rates and often include aggressive repossession terms. Improving your credit before applying — even by 50 points — can save thousands.

Should you care?

When you need it

If your credit score is 580-619, you're in the subprime tier. Subprime lenders (Capital One, Westlake, Credit Acceptance) will fund you, but rates are 12-22%. Buy-here-pay-here is usually a worse deal.

What it costs you

A subprime 9% loan vs prime 5% loan adds about $30-$50/mo on a $20k 5-year loan. Refinancing after 12-18 months of on-time payments (and a score lift) often saves $1,500-$3,000.

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