If it’s time to purchase a new car, it’s likely that you’ll pay for that car, at least in part, using an auto loan. Though auto loans in Melrose Park are a necessary part of the car-buying process, they can often be confusing given their numerous complex components. Fortunately, auto loans are not as complicated as they seem, and with a basic understanding of the foundational parts, you will be an auto loan whiz in no time.
Down Payment
The down payment is the amount of money you will pay up-front for the vehicle you choose. This amount is subtracted from the purchase price to determine the amount of your auto loan. Typically, it’s a good idea to make your down payment as large as possible, as it can help to make your monthly payments lower, potentially allowing you to pay off your vehicle sooner.
Monthly Payment
Your monthly payment is the amount you will be paying every month for the term of the loan until your vehicle is paid off. The monthly payment includes principal, which is the actual debt you owe on the vehicle, and interest, which is the amount your bank charges you to borrow the money you used to pay for your vehicle. Interest rates are influenced by a wide variety of factors, so it’s always good to shop around at a variety of lending institutions to find auto loans in Melrose Park with the best terms.
Term
The term of the loan is the number of monthly payments you will make on your vehicle to pay it off. Most auto loans in Melrose Park max out at around 72 months, with 60 months and 48 months being two other common loan terms. With most auto loans, you can pay the loan off early, which can save you money by avoiding interest payments that you would have had to pay if you had paid off your loan over the full term. For great auto loans for your new car, contact Leyden Credit Union.
