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How a loan works Pennsylvania

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

Bradford Auto Service
(814) 368-4328
58 W. Washington Street
Bradford,, PA
Edmond Chevrolet/Ed Shults Toyota
(814) 362-3837
590 South Avenue
Bradford,, PA
Fairway Ford-Lincoln-Mercury
(814) 368-7166
472 East Main St
Bradford,, PA
Hedlund Glass & Auto Seat Cover Co
(814) 362-7746
34 N. Kendall Ave.
Bradford,, PA
RayBurg M.A.R.S.
(888) 695-7280
14 Tinadell Road
Bradford,, PA
Edmond Chevrolet/Ed Shults Toyota
(814) 362-3837
590 South Avenue
Bradford,, PA
Fairway Ford-Lincoln-Mercury
(814) 368-7166
472 East Main St
Bradford,, PA
Federal Servicing, LLC
724-658-5687
930-2 Cass St
New Castle, PA
Sloane Honda
215-305-5000
9903 Bustleton Ave
Philadelphia, PA
Burrell Trailer Inc
(724) 523-6821
Jeannette, PA

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.

Featured Local Company

Bradford Auto Service

8143684328
58 W. Washington Street
Bradford,, PA
Read more about How a loan works

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