| Article Index |
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| Car Loan Rates and Payments |
| Get Lower Car Payments |
| Putting Extra Money Down |
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How Car Loan Rates Change Your Payments
Your car loan rate is one of the biggest factors that influences the amount of your monthly car payment, and it's also a big influence on how much you get back for your car when you trade it in. Getting a lower car loan rate reduces your car payments by a larger amount than a reduction in the car's price.
With a lower car loan rate you will not only save more money each month but you will pay down your car faster. Here's what affects your car loan interest rate.
Car loan rates are not set in stone, even if you have a ow credit score. If you dealer is telling you they can't find a lower car loan rate for you, look for one yourself. Chances are you'll find one and save thousands of dollars in the process.
To be sure that your dealer is giving you the straight scoop, here is what generally affects a car loan rate. They can change based on a number of variables like...
- Your credit score and credit history
- Your payment terms or number of payments
- The credit markets and the cost of lending (prime rate)
- The price of the car you are buying
When you pay too much for a car, banks could charge a higher rate, or change the terms of your loan. This always results in a larger car payment for you. When your credit score is low, the banks charge more interest, this affects the amount of your payment every month. A few percentage points tacked on to your car loan can result in anywhere from $10 to $50 or more each month on your car payment.
For more expensive cars, this amount is much higher.
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