All About Car Loans

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Car Loans

A great way to be able to get yourself on the open road. Getting a car loan helps to manage your costs and enables you to purchase a higher quality car that will last longer and be more efficient.

It doesn’t matter whether you’re looking for a new or used car; by financing it, you help to free up your cash flow.

Cars depreciate quickly over time, so it’s better to lock in fixed monthly payments for your car than a lump sum up front.

Budget for the best car loan possible.

With a decent credit history, you’re able to get a great rate; just remember the other costs of a vehicle. 

Insurance costs

You’re going to need insurance to protect the car and yourself and in the case of other people being harmed by your car.

Fuel costs

The fuel efficiency can vary from car to car, and with the way prices are, you’ll want to be able to afford one with the best fuel efficiency.

There are still costs

Ancillary items such as taxes, title changes, registration fees, and even new license plates will come out on top of the price of the car itself.

Make sure to calculate all payments

Build out a budget, and ensure you’ve got enough liquidity and income to cover those recurring monthly payments.

The features of a car loan

Wondering why you should consider a car loan?

Up to 100% financing

You can finance the entire car without the need for any type of funding up front. This helps with your budget with a fixed monthly payment.

Great rates

Because you’re looking at a collateralized loan, with the car as the asset, you’re able to get much better rates than with an unsecured loan.

Easy to process

Whether you’re in the dealership or at your local bank, the process is extremely straightforward and requires minimal documentation and a good credit score.

Length of loan on your terms.

Pay on your terms. Most car loans can go up to seven or eight years, and that can still come with a fixed rate and smaller payments. 

Car loan eligibility

Generally, you’ll need to have decent proof of income and show the ability to repay the loan.


Even though 18 is the minimum, you’ll need a strong credit history and a low debt to income ratio. Also, a valid state-issued ID is needed.

Credit score

With a collateralized loan, a high credit score is still needed as an indicator you’ll be able to make the repayments. Minimum around 660 credit score

Income and references

Some places only need your last recent paystubs, while others may need a reference letter from a bank or your job.


Should I get a Car Loan? 

Yes, it’s a great way to buy a large ticket item without having to spend a lot of your liquid assets. Just make a point of factoring in all the costs. 

Can my interest rates change?

No – Car loans usually come in the fixed-rate format. It’s a better option this way.

Is there a prepayment penalty? 

This all depends on the agreement you’ve made with the lender. As this is a semi-safe loan for them, the rates are lower, and that’s their revenue generation. However, they may charge a prepayment penalty. 

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