How a loan works Allentown PA

When you purchase a vehicle with a loan, a bank or other financial institution pays for most or all of the vehicle up-front, and you agree to pay back the money over time.

Local Companies

Bennett Jaguar & Landrover
(610) 841-5700
5254 Tilghman St
Allentown, PA
Enterprise Car Sales
(610) 439-2818
1081 E Congress St
Allentown, PA
Kressleys Auto & Truck Sales
(610) 395-4422
2554 Route 100
Allentown, PA
Bennett Infiniti Inc
(610) 398-9100
4800 W Tilghman St
Allentown, PA
Shoemaker's Jeep
(610) 395-3713
4131 Walbert Ave
Allentown, PA
Five Star International
(610) 433-5167
2131 Hanover Ave
Allentown, PA
Albright's Auto Sales
(610) 433-0502
901 Hanover Ave
Allentown, PA
Valley Auto Sales
(610) 351-6544
1815 S 4th St
Allentown, PA
Outten Chevrolet Inc
(610) 434-4201
1701 W Tilghman St
Allentown, PA
Keystone Dodge Inc
(610) 791-1900
2350 Lehigh St
Allentown, PA

provided by:
2007 Volvo XC70
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Understanding Loans



When you purchase a vehicle with a loan, a bank or other financial institution pays for most or all of the vehicle up-front, and you agree to pay back the money over time. The amount of money you borrow from the bank is referred to as the "principal." The amount of money you contribute up-front is referred to as the "down payment" and usually varies from 10% to 20% of the purchase price of the vehicle. You can often purchase a new car without a down payment (if you qualify); used vehicles generally require a 20% or more down payment.



The payback period for a loan is typically up to five years, although some newer vehicles are being sold with longer-term loans. The financial institution will charge you "interest" for your use of their money. Interest rates vary depending on a number of factors such as your credit rating and where you live. Currently, new car loan rates start at around 8.5%, with used car rates about a percentage point higher. Manufacturers frequently offer lower loan rates as a purchasing incentive, but sometimes these are attached to conditions that may not work for you. Make sure you ask enough questions to make yourself comfortable when investigating various loan options.



 




Key features of loans




The primary features of loans are summarized below. Make sure you review our articles on leases and the differences between loans and leases before making a final decision.



 




  • You have ownership and equity in the vehicle. Your monthly payments are working to purchase that car and it's yours to sell or keep as long as you wish.



  • Gives you control over your vehicle.

Featured Local Company

Sloane Honda

215-305-5000
9903 Bustleton Ave
Philadelphia, PA

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