Auto Loans

Picking your auto loan is every bit as important as picking the right accessories on your new car. If you shop carefully, you could find loan terms so competitive that you have money left over to buy those special seat covers, too.

Auto Loan Basics

The term for a car loan typically ranges from three to five years although terms up to seven years are now becoming more common.
The amount of your monthly payment will depend on the length of the loan, how large a down payment you make, and the interest rate you're charged. It’s easy to calculate your monthly payment using one of the online loan calculators mentioned above.
According to industry web site Bankrate.com, for 2004, the average four-year new car loan rate was 7.87%, but, depending on the economy, rates at the time of your purchase could be significantly higher or lower.
As with all lines of credit, the approval of your auto loan will largely depend upon your credit rating and your current income.
If you have credit problems, your auto loan will come with a higher interest rate if you can secure a loan at all. The higher interest rate is indicative of the increased risk being assumed by the financial institution.
If you have a good relationship with your credit union or bank branch manager, you may have an easier time when it comes to borrower requirements.
Whether you get your loan from a credit union, bank or a car dealer, the title to the vehicle remains with the lender until you have completely paid off the loan. Then your lender will transfer the title to your name and you will own the car outright.