Understanding Your Auto Loan Terms

What kind of auto loan term should you look for? Obviously, there is not a single loan that is perfect for everyone. However, there are some general rules of thumb that people should follow when they go to borrow an auto loan.

Loan term- It is critical that you recognize how long the loan you are about to borrow will be paid on. The longer the loan, the lower your monthly payment will be each month. However, it also means that you will end up paying more in interest and thus more overall for your vehicle.

APR- Your annual percentage rate (APR) is critical to how much you pay on this auto loan as well. You want this number to be as low as possible. It will be determined based on your credit score as well as the place that finances your auto loan. Pay very close attention to this number.

 

 

Categories: Finance