How to Get a New Car Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Car |
| Lender: | Bank |
| Secured: | Yes |
A new car loan is a loan provided by a commercial financing company for the purchase of a brand new vehicle. These loans can be provided by banking institutions or other financial lending companies. These loans usually are often fixed five- to seven-year terms depending on the amount borrowed. The amount borrowed will vary based upon the down payment or trade-in amount.
Interest rates for new car loans vary depending on promotional offers presented by dealerships and the associated lending companies. Brand new vehicles of the latest model will have higher interest rates and brand new vehicles of last year's model or those sold late in the season will have more competitive interest rates. New vehicle interest rates are generally between seven and 10 percent, while sales interest rates can be as low as zero percent, at least for an introductory term.
Who it's for
Most people cannot afford to pay outright for a vehicle that can cost anywhere from $15,000 to $100,000. That's why new car loans are very popular. An individual can decide how much he/she can afford month to month and pay a pre-arranged amount monthly to a commercial lender. At the end of the term, that individual will own the vehicle.
What you need to do to apply
In order to be approved for a new car loan, a person must demonstrate that he/she is able to pay the arranged amounts each month and provide credit information so that a lender can determine the risk of lending to him/her. In order to apply, a person must go to a dealership and then arrange financing through the dealership or his/her own financial institution.
Apply for a New Car Loan
Apply for your vehicle loan with Capital One Auto Finance