Car Loan Interest Rates Explained (For Beginners)
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Published 2022-02-08
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Car loan interest can be very expensive or relatively cheap depending on your terms and the rate you qualify for. You really want to pay attention to how much your borrowing, the interest rate and the length of the loan to determine how much interest your willing to pay on the car loan. You can easily lower your car payment if you extend the length of the loan, but you'll pay more interest on longer loans. So if you qualify for a high interest rate, try to refinance as soon as possible and don't take on a long car loan.
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All Comments (21)
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I was unaware the interest was annual I thought simple meant 1 time this video was tremendously helpful
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Thanks so much for sharing this knowledge 🙏🏻
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Thank you so much for the information ✅
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Dude you explained this perfectly
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Thanks jason! Just subscribed.
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Great video, thank you for sharing.
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The 0% interest is interesting. I've read the fine print on advertisement where it says 0% interest and in small print it says an administration fee is charged of $15 per thousand borrowed. It might be best to put a nice down payment and/or pay the sales taxes separate so that you don't finance the taxes. I've seen loan calculators that give you the option to see the loan including the sales taxes or keeping them separate.
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Very well explained
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Just found out that after my collision my car was deemed a total loss. I was devastated about it until I analyzed my monthly payment which was $409 a month for 6 years on a $16.5k car with a 21% apr so I was paying $348 towards interest and $61 towards the principal. $12.9k in interest in the life of the loan. Suddenly I’m not so upset about my car getting totaled 😳😂 I definitely got taken advantage of by the car salesman. I guess everything happens for a reason right? I love learning.
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Thank you for very helpful info. So is it better to get a longer-term loan (72 mo @ 3%) and make extra payments to pay it off sooner or get shorter term loan (60mo @ 2%) and make exact scheduled monthly payments
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Buying my first car and this is so confusing. I don’t wanna mess this up. Nor end up ruining my credit score nor end up on the collection. I haven’t brought it yet.
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Another great video!
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What is the website or application you’re using ( Loan calculator) ? 3:46
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Yes you are paying interest of the loan based on a daily balance. If u have a 6 year loan . Total interest is $1000 if paid minimum Pymt to the end of the loan. If u pay minimum Pymt then at end of 30 months u paid around 750 bucks of interest already and by that time… the last 30 Pymt cost of interest is only $250! Then not worth to pay off at end of 30 months of the 72 interest
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What loan calculator did you use?
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Thanks
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Explained perfectly! thank you sooo much!!!
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not apy its apr apy is annual percentage yield this refers to interest you receive including compounding factor
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I need help with this im confused im 19 about to turn 20 and im looking to get a truck but car loans seem confusing to me some explain to me i would appreciate it.!
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Hey, Since the rates have gone up could you still be able to get a interest rate below the so called minimum rate? For auto where I live its 3.99% for new cars. You can credit unions that will beat it by 1%. I guess could I get a 2.99% even though it's 3.99% if you refinance with another bank?
