How a loan works Berwyn IL

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

Anderson Bros Ford
(708) 795-7900
6539 Ogden Ave
Berwyn, IL
Jack Phelan Suzuki
(708) 484-1200
7050 Ogden Ave
Berwyn, IL
Central Auto Sale
(708) 496-9050
4751 Central Ave
Berwyn, IL
Green Peoria Hummer
(309) 691-1100
8017 N Knoxville Ave
Peoria, IL
K & D Motors
(618) 476-1221
114 S Illinois St
Millstadt, IL
Ridings Xamis In Shelbyville
(217) 774-2191
401 N Cedar St
Shelbyville, IL
Sterling Auto Sales & Service
(815) 578-9087
27100 Volo Village Rd
Volo, IL
Pete Eeten Auto Sales
(309) 347-8112
2414 N 8th St
Pekin, IL
Fair Oaks Ford Inc
(630) 357-7100
1351 E Ogden Ave
Naperville, IL
Saab Exchange-Morton Grove the
(847) 967-9040
9040 Waukegan Rd
Morton Grove, IL

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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.
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- Car Loans Berwyn IL
- Auto Leasing Pros and Cons Berwyn IL
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