Applying for a car loan is one of the final major steps to owning your next vehicle. Unfortunately, legal terms and finance lingo can get confusing, especially in long loan documents. Fortunately, there are a handful of key questions that can reveal just how good of a deal you’re getting. Here are a few questions to ask when you’re making the jump and applying for an automobile loan.
How much am I borrowing?
Knowing exactly how much you’re borrowing is an obvious must, but many drivers don’t think too much about it right away. Extra charges and fees could drive the number up, not to mention the exact interest rate. Make sure you know just how much you’re financing before making a final decision.
Are there any early payoff or other penalties I could be charged?
A low-rate auto loan often comes with some hidden charges and while they may not affect you now, they could hurt your wallet in the future. You shouldn’t be punished for paying off your car loan early, but that’s exactly what an early payoff penalty is. Make sure to find out what you’re responsible and what limits the loans sets on you.
What’s the actual interest rate?
The annual percentage interest rate is essentially the annual charge for using a lender’s money. That interest rate can become a major factor for drivers on a budget, so it pays to know the exact rate. The rate a lender offers you is largely dependent on your credit score, past credit history, and current financial status.
How much is each monthly payment?
Knowing how much you’re borrowing is just the first part. Making sure you can afford each monthly payment is the second. Drivers who buy a car without knowing the monthly payment could be in for quite the shock when the bill is due. Ask the finance department, then write down the number so you won’t forget.
*Buick/GMC rebates and dealer discounts included in sale price, if discount is shown, see dealer for details.
*Price does not include taxes, license and title fees, or documentation fees. EPA estimates only. Please call for more information.
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