What is The Average Interest Rate on a 72-Month Car Loan? 

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Chasing your dream car and digging for the car loan interest rate you have to expect from the lender? This blog from Carsfast will give you an idea about the whole loan process.

You may be counting on your fingertips to figure out the average car loan interest rate that you can be liable to based on your credit history and other factors, like income, down payment, etc. The interest rate on your car loan determines the overall status of your loan where it defines your monthly payments along with the overall sum you will pay. You can decipher the auto loan rates as annual percentage rates or APR which is based on several factors where credit score is the most prominent one.

Apart from that, your loan term also ascribes to the overall interest rates where you may try to fix a 72-month car loan, provided the affordable monthly installments. “Every day can be of triumph if you keep up your interests”, so it is better to get acknowledged with interest rates for your better interest. In order to understand the whole process affixed to this term and the overall worth it deciphers, this blog can nourish your knowledge to decide better.

Car Loan Interest Rates

Before you sign an auto loan contract, you should be well aware of interest rates and how they impact your whole loan amount. You may find it an enchanting deal to procure the lower monthly installments with long loan terms, but you should know the other consequences attributed to this deal. So to better comprehend the whole prodigy, it is significant to determine what is meant by car loan interest rates. Interest rate is the charge you pay for borrowing money from the lender which is included in your monthly installments.

When it comes to the interest rate, it is calculated on the basis of the amount you borrow along with evaluating your credit score. Interest rates are mostly calculated on your total loan amount using simple interest where early payments are often more inclined towards interest, rather than the principal loan amount. Car loan interest rates are expressed as APR (Annual Percentage Rates) which depend on various factors such as income, credit score, vehicle cost, loan amount and duration, debt, etc. The average interest rate charged on your loan can give you an idea of whether the deal is competitive or not.

Factors Determining The Interest Rate on The Car Loan

If you are trying to get approved for an auto loan and want to figure out the average car loan interest rate you are obliged to pay, you should know the factors that have the potential to alter it. The factors that determine the overall car loan interest rate are:

  • Credit score: One of the significant factors to decide your interest rate is your credit score. A credit score is a 3-digit numerical representation of your creditworthiness as a potential borrower, which helps lenders to ascertain the risk they are taking while approving you for a car loan.

Usually, the range lies between 300 and 850 where if you have a credit score in the upper range, it means you are considered a safe borrower where your car loan interest rates are generally lower. In contrast, your interest rates will be comparatively high when your credit score is on the lower side.

  • Down payment amount and type of vehicle: When you put down a high amount on a car, you are minimizing the amount you borrow from the lender. When you borrow less amount, the interest rates will be lower. The make, variant, and mileage of the car you consider buying will decipher the amount you are going to borrow, which can depict your interest rates.
  • Loan term: Another important factor is the loan term where if you choose to go for a longer term, like 72 months, you can correspond to a low monthly payment but end up paying a high interest rate. While as, if you opt for a short term loan, you can pay less interest though your monthly installments will be higher.

It is quite prevalent for individuals to inquire about the average interest rate on a car in Canada. Let’s delve deeper into this topic and understand the average interest rates. The average interest rate on a car loan in Canada varies depending on various factors such as the credit score of the borrower, the type of vehicle, the loan tenure, and the lender.

Average Interest Rate on a Car Loan for 72 Months In Canada

Coming to the loan term the average 72 month car loan rate depends, the car loan repayment term can generally range from 24 to 84 months depending on your choice. The contemporary times are witnessing a higher proportion of 72-month loans as per its budget fitting proportion that offers lesser monthly payments.

However, from the other side of the tunnel, you end up paying higher interest as long term loans prescribe high average interest rates, particularly after 60 months. This results due to the risk adherence your lender take in case you default on your loan, whereupon the average interest rate on your car loan is increased.

Considering all the factors, the average interest rate on a car loan for 72 months is around 5.4% for a new car and 9.2% for a used car. The average used car interest rates in Canada are generally higher than the new car loan interest rates for 72 months loan.

Car Loan Calculator for Average Interest Rate

You can find the average car loan interest rate using various online car loan calculators. You can also evaluate the average interest rate for 72 months (6-year) loan if you are up to date with your principal amount. When it comes to the car loan calculator, it can give you the monthly amount along with the rate of interest based on the loan amount and loan term. Once you calculate the potential EMIs on your auto loans, you can fix your budget and reach a responsible decision.

In order to get the output on a car loan calculator, you need to enter the car loan amount, car loan interest rate, and car loan tenure (whether in months or years). Besides giving you the EMI amount, you can also find the total interest you have to pay.

If you are endeavoring for an auto loan and want to enumerate the interest rate you will be obliged for, you can use the Carsfast car loan calculator to get explicit results.


While the long term loans may seem cost-effective, the hike in annual interest rates can make it an arduous deal. While in the beginning, the amount may not seem a big difference, after 12 months you can notice the interest that you are paying. Besides, you end up paying more money on interest as compared to the same money you might have borrowed for a shorter term. Therefore, it is better to think before touching these waters.


What is a good car loan interest rate?

Generally, an interest rate of around 5 to 6% is considered a good car loan rate in the context of Canada. If you are having a good credit score, your interest rates can range between 2- 7% which can also depend on the brand, type, and mileage of the car. The loan term is another factor that can affect it.

What is the highest interest rate on a car loan by law?

The interest rate that you have to pay on your car loan depends on what the lender evaluates from your overall financial history along with the limit that is ascribed upon them to charge you. In accordance with the law, the highest rate lenders can charge you on your auto loan is 60% annually.

Are interest rates on used cars lower than on new cars?

When it comes to used cars, the interest rates are generally higher as compared to the new cars though they will cost you less. Used cars are seen as a more risky venture by lenders lending you a loan where other factors such as depreciation are also calculated to determine the overall interest rates.

What is a good interest rate for a car for 72 months?

For a 72 month car loan, the average interest rate of around 5-6% is generally considered good. If you have a good credit score above 760, you can expect to get generally low interest rates. Besides, the loan term also determines the overall average interest rates you have to pay.

Is it smart to pay off a car loan early?

You may think that paying off your car loan early can be advantageous in saving your money. But it is better to consider other factors such as interest rate, monthly payment, etc. before paying the whole sum. While it can improve your DTI and save you money, you can face repayment penalties, along with a drop in your credit score.

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