How a loan works Minneapolis MN

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

Boyer Ford Trucks
(612) 378-0460
2601 Broadway St NE
Minneapolis, MN
Bloomington Acura-Subaru
(952) 890-7370
7801 Lyndale Ave S
Minneapolis, MN
Morrie's
(763) 424-4400
7885 Brooklyn Blvd
Minneapolis, MN
K2 Auto
(952) 888-5511
8316 Pillsbury Ave S
Minneapolis, MN
Ryan Leasing
(763) 557-9066
12824 Highway 55
Minneapolis, MN
Dave Syverson Twin Cities Truck Center
(763) 717-1650
8284 W 35W Service Dr NE
Minneapolis, MN
Morrie's Brooklyn Park Suzuki
(763) 582-7500
8108 Lakeland Ave N
Minneapolis, MN
Morrie's Hyundai
(763) 424-4444
7875 Brooklyn Blvd
Minneapolis, MN
Online Freight Services Inc
(952) 851-3240
Minneapolis, MN
Walser Automotive Group
(952) 345-9000
4401 American Blvd W
Minneapolis, MN

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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.

Featured Local Company

Heintz Toyota Scion

507-387-1148
1234 Raintree Road
Mankato, MN
www.heintztoyota.com


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