How a loan works Jackson MS

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

North Jackson Chrysler Jeep Dodge
(601) 982-2222
5395 I 55 N
Jackson, MS
Import Auto Sales & Body Shop
(601) 949-9976
1625 Terry Rd
Jackson, MS
Moak Paul Automotive
(601) 352-2700
912 S State St
Jackson, MS
Saturn of Jackson
(601) 956-0150
5728 I 55 N
Jackson, MS
Landers McLarty Hyundai
(601) 922-3311
3940 Highway 80 W
Jackson, MS
Wilson Kia
(601) 944-1114
2131 Highway 80 W
Jackson, MS
Fowler Buick-GMC Truck
(601) 354-1166
Jackson, MS
Chevrolet Blackwell
(601) 982-2223
5395 I 55 N
Jackson, MS
California Freight Sales
(601) 992-1005
247 Magnolia Trl
Jackson, MS
Watson Quality Ford
(601) 956-7000
6130 I 55 N
Jackson, MS

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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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