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Home > Who We Are > Blog > 2015 > 02 > Installment Loans 101

Installment Loans 101

Feb 12, 2015

When searching for a new car the first thing you need to figure out is how to pay for it. Many people take out loans to help pay for their new ride. In this blog we will talk about what you need to know about loans, how to get information, and some examples of loan payments.    

The very first thing you should do is figure out what your credit score is. This is a big part of how your bank or credit union determines what your interest rate will be. The better your credit score the lower interest you will pay.  

Shopping around is important not only for finding the right car but for finding the right lending institution for you. If you have a relationship with a bank or credit union that you have worked with in the past this is always a great place to start. Some may have lower interest rates and meet your needs better. Look on their websites to get a general idea of what to expect.

Once you chose a lending institution you need to get pre-approved. They will be able tell you how much you are approved for and an interest rate they will charge you. Keep in mind all of these things are based off of your income, credit score, the age of the car in which you are purchasing, and the loan terms.     

Most people opt for a three to five year loan or 36 to 60 total payments. Once you know the amount of money you want to borrow, the interest rate the bank or credit union will charge you, then length of your loan and payments per year, you will be able to figure out what your projected monthly payments will be.

Some of you may wonder how much interest over time you will be paying by taking out a car loan. Below is a chart we have created to help you better understand how much interest over a 5 year loan you would pay on $10,000. (Keep in mind this depends on not prepaying your loan)


Car Loans.JPG

If you have any questions feel free to contact our corporate office: 1515 Hawkeye Dr. Hiawatha, Iowa 52233 or by telephone: 319-739-1521. 

 

Written By: Nicole Wise
 



Category: General Blogs

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