Getting an Auto Loan

Getting an Auto Loan

by Jeff Simpson

Before you try to get an auto loan for a car you want to purchase, there are nine questions that you should ask your lender. These are probably the most important questions you will have to ask in order to know what kind of auto loan you are getting, and to make sure you are getting a good deal. After you ask your auto loan questions, if there is anything that is confusing or doesn't seem "just right" to you, you are better off walking away and thinking about before committing to any auto loan that may leave you with regrets later on.

What interest rate am I really paying for this auto loan? The annual percentage rate (APR) is the best way to know what your auto loan will cost you over the next 3 to 6 years. It is the actual interest rate you pay annually on the unpaid balance of your auto loan. This rate will depend mostly on your credit score and credit history.

Are there any penalties on my auto loan? Find out if paying off the loan early will earn you any penalties or extra charges that will occur.

What is the actual price that I'm paying for the auto? This means that you need to know the exact price, down to the last penny that your auto loan is costing you.

What is the total amount that is being financed through the auto loan?

What is the exact amount of each payment if I get an auto loan?

What is the actual dollar amount I am paying just in interest for the auto loan?

What is the total number of payments on the auto loan?

Is there financing from a third party? When at a dealership, they may sometimes tell you that they were unable to get you approved at the auto loan rate they quoted you, but they were able to find a lender to cover the auto loans with bad credit at a higher payment. This is a trap that many people fall into. Know who the lender is before you agree to any auto loan.

What do I need to know about credit insurance? Your lender may require or offer credit insurance. You need to find out if they offer auto loans with bad credit and what it will cost you.