It will also take longer to build up equity in your car. The extra time it takes to pay it off can cost you hundreds or even thousands more in interest. The most popular auto loans take up to seven years to pay off.Ī longer loan repayment term can lower your monthly payment, but it will also drive up your total loan cost.
To compensate, car loans are getting longer, averaging 68 months. Average payments are going up, too, exceeding $500 a month. The average new-car loan topped $30,000 for the first time last year. A shorter loan costs you less in the long run.Ĭars are getting more expensive. “Credit unions and community banks are the best place to start,” says CNBC.ĥ. Since we’re not-for-profit organizations, we’re able to offer rates 1 to 2 percentage points lower than competing banks. If you want to get the best rates, check with your community credit union first. Lenders within a mile of each other may charge wildly different interest rates, so it’s important to shop around-and not just at dealerships. When you spend time shopping around for the best deal on a car, it doesn’t make sense to drive up the final price by taking the first auto loan you can get. After that, consider getting pre-approved so you can shop for your car without worrying about the details of your loan. It can also help you decide how much car your budget can handle.
2.99 INTEREST RATE CAR LOAN CALCULATOR HOW TO
Our loan calculator can help you easily figure out how to achieve a monthly payment you can afford. Increasing your loan term to 72 months could drop the monthly payment down to $221, although you’d end up paying more interest over the life of your loan. But if you qualified for 1.99 percent instead, your payment would go down to $262. If you financed a $15,000 car with a 2.99 percent APR for 60 months, your monthly payment would be roughly $269. Your monthly payment is calculated based on: That’s how much you’ll need to fit into your monthly budget. Your monthly payment determines what you can afford.įor many car buyers, the monthly payment is the number-one factor in deciding whether they can afford a car. A 60-month loan can reduce your monthly payment by nearly a third, but you’ll pay an additional $1,060 for a total loan cost of $17,610.ģ. On a 36-month loan, you’ll pay an additional $1,550 in interest for a total of $16,550. Let’s say you finance a $15,000 car at 6.5 percent APR. To decide whether you’re getting a good deal-and a car that’s within your budget-you need to calculate the true price, which is the total amount you’ll end up paying over the life of your loan. But that doesn’t tell you how much it will ultimately cost. The true price of a car is the loan’s total cost.īuyers often get hung up on the sticker price of their car. Not only do you get a better deal on your loan, but you also have leverage for negotiating a better price on your car.Ģ. Plus, when you have your pre-approval in hand it’s like sailing into the dealership with a big wad of cash.
You’ll know ahead of time what interest rate you qualify for, what your monthly payment will be and what loan terms you need to achieve it.
Getting pre-approved for an auto loan gives you plenty of time to shop around for the best loan before you have to make any on-the-spot decisions about buying a car. Yet as many eight in 10 car buyers try to negotiate both at the same time.
To get the best deal on each one, you want to handle them separately. Pre-approval gives you the upper hand.įinancing a car involves two separate negotiations: the price of the vehicle and the terms of the loan. To get the deal you want on both your car and your auto loan, there are a few things you need to know.ġ. The truth is, getting the right auto loan is as important as getting a deal on the car itself. Most car buyers spend up to 27 hours researching their purchase but put little thought into the terms of their auto loan. Just as you’re about to start negotiating, the sales rep asks, “What kind of monthly payment can you afford?”Ī surprising number of people are unprepared for this question. You walk into the dealership, armed with vehicle reviews and ratings. It’s almost within your budget, too, once you talk the price down a little. It rides like a dream and fits you like a glove.
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