How a loan works Chattanooga TN

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

Trotter Buick
(423) 855-5151
Highway 153 & Jersey
Chattanooga, TN
Unitedauto
(423) 899-2525
2121 New Chapman Rd
Chattanooga, TN
Ayers Leasing Inc
(423) 267-1104
900 Riverfront Pkwy
Chattanooga, TN
Bmw of Chattanooga
(423) 894-5660
5949 Brainerd Rd
Chattanooga, TN
Trotter Elite
(423) 648-5222
6008 Shallowford Rd
Chattanooga, TN
Saturn of Chattanooga
(423) 855-0550
6025 International Dr
Chattanooga, TN
Lawrence-Doster Motor Co
(423) 265-1083
400 W Ml King Blvd
Chattanooga, TN
Long Pontiac Co
(423) 756-4501
4130 Jersey Pike
Chattanooga, TN
Pye Acura
(423) 855-1093
2131 Chapman Rd
Chattanooga, TN
Chattanooga Wholesale Trucks
(423) 634-1172
3015 S Market St
Chattanooga, TN

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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

Paul Teryl

(706) 745-2002
5724 Dills Rd. Extension
Blairsville, GA

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- Lowering Auto Finance Costs Chattanooga TN
- Auto Loan Payment Calculator Chattanooga TN
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