What credit score would they refuse a car loan?

When a borrower applies for a car loan with a bank or a financial institution, a credit check would be done to find out the credit score and the credit history of the applicant.

Although you may not be aware, the credit score of the applicant is a very important factor when it comes to getting an approval for any type of loan since it would sum up the financial history of the applicant.

A lot of applicants who are currently struggling with credit scores and have had a few problems with payments in the past may often be wondering what type of credit scores they would need in order to get an approval.

How much credit score would you need to get a car loan?

In order to quality for a car loan, there are several factors that are taken into consideration by the loan company or the bank. There is no fixed criteria that declares the required credit score for any applicant profile.

In fact, car loans would be approved based on a combination of factors that include the down payment, loan to value, loan term, vehicle age, miles, time spent on the job, time spent at the residents, credit profile, debt to income ratio including the new payment and the monthly income.

What this means is that there will be a lot of other factors too which would be taken into consideration before a bank would decide to provide you an auto loan.

Is it possible to get a car loan with low credit scores?

Banks would normally base their decision on all of the factors listed above. Your car loan application would not be rejected solely based on low credit scores. In fact, even applicants with low scores manage to get car loans easily if their debt to income ratio makes up for it or if they have good stability history at their job or their residence. The debt to income ratio is one of the most important factors that is considered by financial companies.

The interest rate for the loan is generally decided based on this factor. In most cases, lenders would not want a ratio of more than 16%.