How a loan works Blytheville AR

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

Carlock Chevrolet-Pontiac Buick-Cadillac Oldsmobile Inc
(870) 763-5700
2900 S Division St
Blytheville, AR
C B Auto Sales
(870) 776-1907
977 E Main St
Blytheville, AR
Blytheville Ford Lincoln Mercury Inc.
(870) 763-4453
305 N Service Rd
Blytheville, AR
Quality Auto Sales
(870) 780-6330
119 E Main St
Blytheville, AR
Carlock Toyota Inc
(870) 762-8100
2840 S Division St
Blytheville, AR
Carlock Nissan
(870) 763-2800
2840 S Division St
Blytheville, AR
Turney's Auto Sales & Inc
(501) 803-4827
14906 Mac Arthur Dr
North Little Rock, AR
Allen Tillery Chevrolet Inc
(501) 525-4343
4573 Central Ave
Hot Springs National Park, AR
Heber Springs Ford Llc
(501) 362-8211
1810 Highway 25B
Heber Springs, AR
Jim Golden Ford-Lincoln-Mercury Llc
(870) 837-1021
Camden, AR

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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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