How to use the Auto Loan by Credit
- Enter the amount financed and the term.
- Enter your credit score to see the typical rate tier.
- Read the monthly payment and total interest.
- Compare tiers to see what a score improvement is worth.
How the calculation works
The payment uses the standard amortisation formula, payment = P × r ÷ (1 − (1+r)^−n) with r the monthly rate. Lenders group applicants into tiers — commonly super-prime 781+, prime 661–780, near-prime 601–660, subprime 501–600 and deep subprime below 500 — and each step down adds several points of APR. Used-car rates sit above new-car rates in every tier because collateral value is less predictable.
Two practical consequences follow. First, a 60-point score improvement can be worth more than any discount you negotiate on the vehicle, so delaying a purchase to repair credit is often the highest-return action available. Second, long terms of 72 or 84 months lower the monthly payment while raising total interest and extending the period of negative equity, where the loan exceeds the car's value. Multiple finance applications within a 14-day window count as one credit enquiry, so shop rates in a tight window and always compare on total cost of credit rather than on the monthly figure.
Payment = P × r / (1 − (1 + r)^−n), with r set by credit tierSource: Standard loan amortisation; credit-tier bands as used in US auto lending risk pricing.
Worked example
28,000 financed over 60 months, comparing a 720 score at 7.2% with a 580 score at 15.8%.
- At 7.2%: payment 557, total interest 5,420.
- At 15.8%: payment 678, total interest 12,680.
- Difference per month = 121.
- Difference in interest = 7,260.
The lower score costs about 7,260 more in interest on the same vehicle.
Frequently asked questions
What score do I need for the best rate?+
Generally 781 or above for super-prime pricing; 661+ still secures competitive rates.
Why are used-car rates higher?+
Used collateral depreciates less predictably, so lenders price in more risk.
Do multiple applications hurt my score?+
Auto enquiries within roughly 14 days count as a single enquiry.
Is a longer term a good way to lower payments?+
It lowers the payment but raises total interest and lengthens negative equity.
Last reviewed August 31, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.