Paying for your car through a loan brings you across two things – down payment and interest rate. A down payment is what you pay immediately on buying a car, non-refundable. Interest rate dictates the inflated amount you will have to pay back over a period of time. Often, a car loan gives you the option of making a big down payment or low interest rate. Do you take advantage of a low interest rate? Or, do you take both options?
Wrong Perception about Auto Down Payments
Most individuals going in for car loans are surprised that the down payments are lesser than they expected. This wrong perception about down payments occurs because almost everyone assumes that car loans require the same down payment as home loans, and car loans have large down payments.
There is a huge value difference between a car and real estate. Hence, the down payment for a vehicle is significantly less.
Car dealerships have many financing options and you should inquire about them. This is helpful if you are struggling financially and are in need of a car.
Factors for a Low Interest Rate
Your interest rate depends on a three main factors.
Where is the loan coming from?
Who is giving you the loan makes a big difference on the interest rate you are charged as every financial institute has different rates. Insta Auto Loans are for customers who have trouble paying for a car and the interest rate is adjusted accordingly.
What type of car are you buying?
Ideally, you shouldn’t be over reaching yourself when it comes to purchasing a car. You certainly can’t expect a low interest rate for a Ferrari! Also, whether the car is new or used, it plays a role in how low the interest rate will be.
What is the length of your loan?
The time period of your loan plays a critical factor when it comes to the interest you pay. A loan of a lengthy time period will mean that you pay more over time.
If you have both these options in front of you, take them both! Making a big down payment and getting a low interest rate are the perfect way to pay off the debt quickly.
If you do have a bad credit score, then don’t shy away from the auto loan. Taking an auto loan and paying it back regularly will actually help strengthen your credit history and improve your credit score.
Lastly, explore all your options when deciding ways to pay for the car you want. Talk to the car dealership and talk to us at Insta Auto Loans. We’ll be able to help you out.
