How a loan works Houston TX

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

Archer Chrysler Jeep Eagle
(281) 933-9000
11614 S Southwest Fy
Houston, TX
Champion Chevrolet Gulf Frwy
(281) 481-6680
13800 Gulf Fy
Houston, TX
Champion Toyota Gulf Frwy
(713) 943-4100
11711 Gulf Fy
Houston, TX
Texas Truck Sales
(713) 670-7080
3700 N McCarty St
Houston, TX
Northwest Dodge Inc
(832) 912-2500
19616 Northwest Fwy
Houston, TX
Post Oak Motor Cars
(713) 850-1530
1530 West Loop S
Houston, TX
Good Deal Autos
(713) 270-8800
9435 Ronda Ln
Houston, TX
Saturn of Houston Northwest 290
(281) 894-3100
18700 Northwest Fwy
Houston, TX
Tom Peacock Cadillac
(281) 443-7700
15300 N North Fy
Houston, TX
Tom Peacock Cadillac
(281) 230-4400
15300 N North Fy
Houston, TX

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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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- Negotiate for the Cheapest Auto Loan Houston TX
Are you looking for cheap auto loans? If you are, this article will provide you with three tips on how to negotiate for the best deal on an auto loan so you can get on your way to car ownership.
- Used Car Loans Houston TX
- Auto Leasing Pros and Cons Houston TX
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- Car Leasing Or Car Buying Houston TX
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