So you’re thinking about buying a car so you need to get an auto loan. But maybe you’re credit isn’t so hot and the dealer says you’re going to have to pay a higher interest rate on your loan to get that car of your dreams!
But you aren’t really sure what that means. Well don’t stress out cause that can cause you to yell at your husband or kick the dog and that’s just uncool.
Understanding interest rates is really easy, you just need to know the score. The basic concept is this: Any time you borrow money to get a car, the lender you are borrowing money from will charge you for using that money. That charge is called an interest rate.
So in a simple example, if you borrow 0 and the interest rate is 10% per year, then you’ll pay to the lender for the privilege of using their money. Make sense?
The thing you need keep in mind is that you’ll pay a lot more money on your auto loan if your interest rate is high than you will if it’s low. So in this case, being low is better than being high – which I know is clearly counter-intuitive!
The next question is how do they figure out what interest rate to charge? And that’s a bit more complicated. Essentially it has to do with the car you’re buying and how good of a credit risk you are. So the best thing you can do to improve your interest rate on your car loan is to improve your credit score. And that means being better with your money.
There are many companies that can help you with credit repair, but there are quite a few out there that might not be so reputable. So make sure you check out the company on the web if you’re thinking about doing something about your credit. That’s just being smart!. And smart, as we all know, is better than dumb!
At CarLoanMarket.com we want to help you get a car loan with an interest rate you can live with so you can buy that car of you’ve been dreaming about…
CarLoanMarket.com. Drive Your Dreams
Use the Excel RATE Function to calculate the annual interest rate. This will give you an idea how much interest you are paying if you change the monthly amount or number of payment periods.
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Microsoft products: http://goo.gl/KzkxCo
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