Buy a car

A car loan is often a secured loan that is used to purchase your desired vehicle. The vehicle serves as collateral for the loan. If you default on your repayments, the lender can seize, or repossess, your automobile. Car loans are often repaid in installments. The lender retains ownership over your vehicle until you completely repay the car loan, similar to a mortgage.

Car loans can be offered as a secured and unsecured loan. As mentioned previously, a secured loan requires the borrower to put up collateral until the loan is paid in full. If you fail to make your payments, then the lender can repossess your vehicle. Secured loans tend to have lower interest rates, higher borrowing limits and longer repayment options (or terms).

Unsecured car loans require no collateral as it’s simply a line of credit. The rate issued to you is based on your credit score. If you fail to make your payments, your debt is sold to a collection agency since there’s no collateral for the lender to seize. These tend to have higher interest rates because they pose more risk to the lender. Unsecured loans may also be called personal loans.

When you are approved for a loan, you receive your money in a lump sum which is determined by your credit score and other factors through the application process. Then you’ll pay it back over time. The length often depends on what terms are available and which one fits your budget. The amount you borrow, the time you take to repay the loan, and your interest rate all determine your monthly payment.

• Loan amount. The loan amount, also known as the principal, can be the total cost of the car or can be less. The loan amount depends if you’re making a down payment or trading in your old vehicle.
• Annual percentage rate (APR). Your APR is your effective interest rate you pay on your loan. Think of it as your interest rate stated as a yearly rate. The APR can include fees that you’ll pay for, such as origination fees.
• Loan term. This is the amount of time you have to pay back your loan. Terms can range from 36 to 72 months.We've got your back

Our lending team is ready to answer questions and help you with your car loan today.

Ultimately, it comes down to your financial goals and priorities. You should be asking yourself these questions:

• Do I have good credit? If you answered no to this, you should consider buying a car. Leasing often requires a high credit score. Granted, you’ll likely have a higher interest rate, but you can usually get a car loan.
• Will I be driving a lot of miles? If you answered no to this, you should consider leasing a car. Leases will have a limited number of miles you can drive in that car. If you exceed that limit, you’ll have to pay a fee that you agreed upon. However, if you don’t drive often this won’t be a problem.
• Do I want to be driving the latest car models? If you answered yes to this, you should consider leasing your car so you can enjoy a new car every few years.

Do I have a tight budget? If you answered no to this, consider buying a car since your budget can accommodate your monthly car payments. Lease monthly payments are usually lower.

• Banks. Banks are established lenders who tend to be more reliable than other lenders. Your primary bank likely offers car loans. Consult your bank and discuss what options are available.
• Car dealership. If you’re purchasing your car from a dealer, they likely offer a payment plan. Dealers often offer “low or zero-percent financing”, which means low or no interest rate. However, those deals are typically meant for buyers with good credit score. Be sure to ask questions about your payment options and consult your budget.
• Credit unions. Credit unions can offer competitive rates and a personalized experience compared to large, national banks. There may be requirements that you must meet in order to join a credit union. Be sure to ask that credit union if you’re eligible.

Looking to buy a motorcycle for the open road? Need a boat for the lake? Camping in the great outdoors with your family? We offer auto loans for motorcycles, boats, and RVs! Contact our team to discuss loan options today.