So let’s just run through what exactly we are looking at when we get a car loan. A car loan is a way for you to have a lump sum of cash to purchase a new or used vehicle. The money comes from a lender such as a bank, car dealer, or credit union. This lender will let you borrow the money and then you are required to pay this loan back over time and in most cases will have interest added to it. The original amount of money that you get without interest included is called the loan principle. The reason the interest is included is so that these lenders can make a profit off of your loan. So whenever you are calculating how much money your vehicle will cost you should make sure that you are including the end amount with the interest included.
If you get a loan for a $9,000 car and the interest of your loan is set at 6% you will need to figure out how much your loan will be at the end of the loans term. The 6% of $9,000 is $540 and if you pay the loan of within the term of the loan then you won’t owe more than that.
We will talk more about loan terms in our next article of this series. Until then head on over to Dominion Motors dealer of Buick Cars in Thunder Bay to check out all of the exciting things happening there.