Over 43% of adult Americans have an Auto Loan
When you are looking to buy a car, it can sometimes be difficult to fork over all of the cash right up front. You work hard for your money, you have other bills to pay, you have vacations you want to go on. We get it. Auto loans can be a great way for you to purchase a new or used vehicle without emptying your personal checking account. So just how do mortgage rates for a personal loan on cars compare right now? Of course, a portion of your interest rate (which you can estimate using a loan calculator) is going to be determined by your credit score. If you have a good credit score, 700 or above, the average mortgage rates for a car loan is between 4.77% and 5.35%. Typically, the average rate for an auto loan ranges from three to ten percent. That means right now is a pretty good time for an auto loan as it is on the lower end of the spectrum.
In addition to getting an auto loan, many banks and credit unions have great programs to get some extra benefits when you open a personal checking account. Those benefits can range from anything between a cash bonus to a lower interest rate on your car loan. Additionally, having a personal checking account with the same institution that you have a car loan with can help you avoid late payments and ensure you are always getting the best auto rates.
Other Factors In Car Loans
While getting hooked up with a personal checking account bonus might be nice, there are a few other things you should consider when getting a car loan. The interest rate is of course important. Here are some other items you should be familiar with: total loan amount, dealership financing add-on services, APR (annual percentage rate).
Calculating the total cost of purchasing a car is important. In addition to the cost of the car, there can be additional costs for warranty, upgrades, dealership financing costs, and state tax. Make sure you understand the total amount you need for your car loan, as that amount will have a big impact on the total interest you pay. Speaking of interest, it is also important to understand your APR, or annualized percentage rate, which may be different from your monthly interest rate.
The last thing to consider is the term of the loan and any special stipulations it might have. Just like credit card agreements, car loans can come with stipulations if you miss a payment or are late on a payment. Additionally, the term of the loan (how many months the loan is for) can drastically affect how much you pay each month and how much interest you pay overall. Using a loan calculator can help you determine the best route to take when getting an auto loan.