How a loan works Merrill WI

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

Brickner's Park City Chrysler Jeep Dodge
(715) 536-2833
3000 E Main St
Merrill, WI
Breaman Merrill Ford Mercury Inc
(715) 536-3039
Merrill, WI
Rdt Transportation Llc
(715) 539-9525
W9867 State Highway 64
Merrill, WI
Breaman Merrill Ford Mercury Inc
(715) 536-3039
Merrill, WI
Stark GM
(715) 536-1200
N259 Brandenburg Ave
Merrill, WI
Don Jacobs Automotive Sales & Service
(262) 521-3800
Highway 164 & 59
Waukesha, WI
Riverside Auto Group
(715) 735-3361
4030 Hall Ave
Marinette, WI
Gandrud Chevrolet Nissan Inc
(920) 468-6800
919 Auto Plaza Dr
Green Bay, WI
Toyota - Scion - Kolosso
(920) 738-3666
3000 W Wisconsin Ave
Appleton, WI
Horter Chevrolet-Pontiac Inc
(262) 783-4993
915 Main St
Mukwonago, WI

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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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