How a loan works Mississippi

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

Chevrolet Buick of Tunica
(662) 363-1331
2975 Highway 61 N
Tunica, MS
Metro Mitsubishi
(601) 352-6711
1087 I 20 Frontage Rd
Jackson, MS
Johnson Enterprises
(601) 483-2232
3304 8th St
Meridian, MS
Cannon Chevrolet-Cadillac-Nissan
(662) 453-4211
69900 Highway 82 W
Greenwood, MS
Aberdeen Ford
(662) 369-8646
41314 Highway 45 S
Aberdeen, MS
Dossett Big 4 Pontiac-Cadillac GMC Inc
(662) 842-3212
Tupelo, MS
Paul Moak of Ridgeland
(601) 607-3093
450 Steed Rd
Madison, MS
All Star Chevrolet Mazda Pontiac Buick Cadillac
(662) 335-2886
1009 Highway 82 E
Greenville, MS
Heath David Auto Sales & Service
(662) 226-1368
Grenada, MS
Old River Truck Sales
(601) 407-1161
251 Yandell Ave
Canton, MS

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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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