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Waterloo Car Loans - Everything You Need To Know

Waterloo Car Loans - Everything You Need To Know

Waterloo Car loans can be complicated at times and come with lots of questions. This is where working with car loan experts offers better value than applying online. That doesn’t mean we cannot use online tools to help though.


That’s why our Waterloo car loan team put this FAQ together. It’s a list of common questions our car loan experts see on a regular basis.


How long does it take to pay off Waterloo car loans?


Before you sign up for a car loan, it makes sense to know exactly what you’re letting yourself in for. It’s a long term arrangement that can last for several years so you need to know exactly what you’re getting into.


A typical car loan will last between 3 and 7 years. We usually see car loans of 3 to 5 years. Seven year car loans are possible and are available but they don’t always make financial sense.


If you’re planning on getting a car loan, plan for a 3-5 year commitment.


What types of Waterloo car loan are there?


There are two main types of car loan, a simple interest loan and a car title loan. There are others but these are the two we see most.


Simple interest loan – This is what we call a ‘standard’ car loan. You borrow a set amount over a set term and interest is accrued as you go. You can pay off early and the interest is reduced accordingly.


Whether it’s a bad credit car loan, extended car loan or something else, most car loans we provide are simple interest loans.


A car title loan – These are short term loans where you borrow an amount using your car as collateral. It’s an important difference between a title loan and a simple interest loan and something we are asked about a lot.


These loans don’t pay for a car, they use your car as security while you borrow money for something else.


How does loan interest work?


Loan interest is a subject that could fill a book never mind a blog post! Interest is the lender’s profit for letting you borrow the money. It’s usually a set percentage fee payable monthly on the amount you borrow.


The interest rate you pay depends on the amount, length and type of Waterloo car loan. It also depends on your credit score. The higher the score, the lower the interest.


At the beginning of a car loan, the amount made up of the interest versus the principal, the amount borrowed is higher to assure the lender of a return. The longer you pay the loan, the more this evens out until you’re paying off a good portion of the principal.


How does my credit score influence the interest rate?


The higher your credit score, the better you are seen to be with debt. Therefore, you’re viewed as a lower risk and the potential for the lender to make a loss is lower and they don’t need to insulate themselves from loss with higher interest.


There is a lot that goes into interest as we mentioned a minute ago but this is the basics. The higher risk you are perceived to be, the higher the interest you’ll be charged.


We will use all our skill and experience to deliver the lowest possible Waterloo 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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