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Stoney Creek Car Loan Beginners Guide

Stoney Creek Car Loan Beginners Guide

Are you considering taking out your first Stoney Creek car loan? Always paid cash for your cars or used a company car? We work with a range of buyers with very little experience of the auto loan market and help them make sound decisions.

 

This blog hopes to help you too.

 

This post is going to outline some key terms you’ll need to know to be able to get the right loan for your needs.

 

Loan term

 

The loan term is the length of the auto loan. It’s the period of time from the moment you take out the loan until you have paid it off. While measured in years it is expressed in months.

 

A 3 year auto loan will be labelled as 36 months, 4 years as 48 months and so on. This is mainly because we pay them monthly, so 36 monthly payments equals the term, and so on.

 

Loan principal

 

The loan principal or principal amount, is the actual sum you borrow. If you borrow $10,000 as an auto loan, that’s the principal amount. The sum before any lender fees and interest is applied.

 

It’s important to know loan principal as you want any overpayment to come off the principal and not the interest!

 

Down payment

 

The auto loan down payment is the cash deposit you pay as part of the purchase. It’s separate from trade in as a down payment is almost always cash.

 

The higher the down payment, the less you have to borrow and the higher your chance of getting the loan. The lower the down payment, the higher the amount you have to borrow and the lower your chances of getting the loan.

 

Interest rate

 

The auto loan interest rate influences how expensive the loan will be to pay off. Loan interest is charged annually, which is why it’s called the Annual Percentage Rate, APR. That rate is then broken down into daily amounts and combined to come up with the monthly interest.

 

The interest rate is made up of the Canadian prime rate plus a percentage to cover costs for the lender and a little profit.

 

Bad credit car loan

 

A Bad credit Stoney Creek Car Loan is more common than you might think. They are specialist auto loans provided to people with less than perfect credit scores.

 

Rather than not provide lending to people who are often in this situation through no fault of their own, lenders decided to create a new type of loan specifically for them. Interest rates are higher to compensate for a perceived higher risk but everything else is largely the same.

 

Credit score

 

Your credit score is a numerical ‘score’ that tells lenders how good you are with credit. If you borrow little and often and always repay on time, you’ll have a high score. If you have had issues in the past with credit or debt, you may not have such a high score.

 

Your score is one of the primary methods a lender can assess whether you’re a safe risk or not. The higher your credit score, the lower your interest rate and vice versa.

 

We will use all our skill and experience to deliver the lowest possible Ancaster car loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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Categories: Auto Loan

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