All You Need to Know About Car Loans

You have too much to worry about to be bogged down by car loans that are designed to make a profit at your expense. While auto financing is an unavoidable reality for some, searching for the best car loan rates can keep your finances balanced throughout the year.

There are several different types of car loans including new car loans, used car loans, pre-approved loans and refinancing. GOBankingRates brings you the facts you need to find the right loan for your next car.

How Car Loans Work

When borrowers of new or used car loans finance a vehicle from a lender, the financial institution considers the car collateral. The car is used as security, in the event that the borrower defaults on the loan.

Used cars are more likely to wear down and become inoperable due to age, condition and maintenance issues, which is why some lenders increase the range of used car auto loan rates to protect themselves from this potential loss. On the other hand, newer vehicles - while still facing an immediate depreciation just driving it off the dealership lot - do not pose as great of a loss, should the borrower be unable to make good on repaying their auto loans.

How to Find the Best Car Loan

There are a number of factors that contribute to the car loan rates you'll be offered by a lender.

FICO Score: A person's FICO score is one of the most influential guides that lenders use to determine whether borrowers are risky to lend money to.

Auto Loan Term: Another way lenders protect themselves and ensure that they get their money back on time and in less time, is to provide lower car loan rates for shorter car loan terms and slightly higher rates for longer terms.

Vehicle Type: As shared above, the age of your vehicle can play an important role in what rate you're offered.

Down Payment: Having an adequate down payment can help do a number of things like lower the total amount you'll need to finance , and by directly affecting the auto financing interest rate, even with dealer financing.

Apply for a Car Loan

Most Read Car Loans Articles

What to Do Before Getting a Manchester Auto Loan

Here are the important steps you need to take before getting a Manchester auto loan.

Read More »

How Long Should Your St. Louis Auto Loan Be?

When it comes to choosing the best auto loan, term length is an essential factor. Find out the ideal term for a St. Louis car loan.

Read More »

7 Steps You Need to Take Before Buying a Car in Dallas

Here's how to save money on a car and an auto loan in Dallas.

Read More »

3 Ways to Find the Perfect Cars for Sale in Miami

Find out how to research and buy the best cars for sale in Miami.

Read More »

4 Types of Atlanta Auto Loans: Which Is Best for You?

Not all Atlanta auto loans are created equal. Find out which of these four options is best for you.

Read More »

How a Montebello Auto Loan Can Help You Save Money

Shopping for a Montebello auto loan at a credit union before visiting Montebello car dealers could save you money.

Read More »

How to Increase Your Road Trip Budget With Savings From a Salt Lake City Car Loan

Road trips are great for spending time with family, but they aren't always cheap. Find out how a Salt Lake City car loan can help you save.

Read More »

How to Take a $300 Vacation on Your Utah Auto Loan

Find out how to save $300 every year on your Utah auto loan.

Read More »

Types of Car Loans

Before you begin shopping for a car, it is important to know what auto financing qualifications you meet. Typically, auto loan rates are calculated based on the type of car you want to buy and your credit history. Additionally, you can get financing directly from a bank or have the dealer finance your auto loan.
  • Bad Credit Auto Loan
  • Used Car Loan
  • New Car Loan
  • Preapproved Auto Loan
  • Dealer Financing
  • Auto Refinance Loans

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.


Featured In: