How a loan works Lafayette LA

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

Lafayette Mazda
(337) 231-5550
5001 Johnston St
Lafayette, LA
Lingo International Inc
(337) 234-9425
2835 NW Evangeline Trwy
Lafayette, LA
Lingo International Inc
(337) 314-0550
2835 NW Evangeline Trwy
Lafayette, LA
Courtesy Lincoln Mercury-Lafayette
(337) 991-0100
6885 Johnston St
Lafayette, LA
Used Cars of Acadiana
(337) 983-0455
2604 Ambassador Caffery P
Lafayette, LA
Import One
(337) 984-4700
2611 Ambassador Caffery P
Lafayette, LA
Hub City Ford Inc
(337) 235-6329
2900 NE Evangeline Trwy
Lafayette, LA
Infiniti of Lafayette
(337) 984-0120
6866 Johnston St
Lafayette, LA
Lafayette Motor Co Inc
(337) 233-8775
1515 Jefferson St
Lafayette, LA
Lafayette Motor Co Inc
(337) 233-0930
1515 Jefferson St
Lafayette, LA

provided by:
2007 Volvo XC70
(Continue to more photos from MyRide.com)


 



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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- Used Car Loans Lafayette LA
- Auto Leasing Pros and Cons Lafayette LA
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