Are you in the market for that next car? You may be searching our Marino Chrysler Jeep Dodge Ram inventory right now, on the hunt for the perfect fit. Chicago, Skokie, and Park Ridge drivers should keep a few things in mind when it comes to financing.
It’s important to understand interest rates. We want you to be able to make a smart investment, which is why we’ve compiled this guide to interest rates on used cars. After you’ve read this helpful guide, you’ll be fully prepared for Forest Park adventures.
APR (annual percentage rate) is what’s used by lenders to set the percentage a borrower will pay on a loan every year of the loan term. This number becomes part of your monthly payment.
When talking dollars and cents with our financing team, we’ll provide different financing options and help find the best fit for you. A lender adds a fixed interest rate on top of the price of the car, and we’ll explain that rate and what it means for you.
While APR is calculated using current market conditions, it also takes into account personal factors, like:
Current employment situation and debt-to-income ratio will be taken into account as well. A lender wants to make sure you’ll be able to pay back the loan, so the better these numbers look, the better the chance is of having a low APR.
When you’re going through the loan process, you’ll also want to think about how long the term should be. You could establish a payment schedule that takes 36 months, 60 months, or even 72 months. Of course, this will have an impact on how much you’ll pay in the long run. In general, a shorter loan term means a lower interest rate. The lender wants to recoup the money as soon as possible, so you’ll likely see lower rates.
On the other hand, if the loan term is longer, you’re paying the APR for a longer period, so that can end up costing extra. A vehicle can depreciate quickly, so it’s best to pay off the loan sooner. However, stretching things out is a more realistic option for many drivers.
Your credit score lets a lender know how debt is being managed. It also gives them a better idea of whether or not you’ll be able to pay off the loan in a timely way. Outstanding debt and payment history are two factors going into the creation of a credit score.
If you’re holding large amounts of debt, high interest rates can be a result. Missing a payment or paying late can also negatively affect a credit score. Keeping your credit score high is key. If you have a lower credit score, you may have to re-work your budget to find a less expensive car.
Contact Marino Chrysler Jeep Dodge Ram to explore the used cars on our lot near Chicago and Skokie. Our goal is to help you get behind the wheel in Park Ridge and Forest Park. Our finance experts are here to answer any loan questions you might have. We look forward to seeing you here at our showroom!