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Auto Loans

Ready to drive that car you have been wanting to get? Auto loans are a way to finance the purchase of vehicles, which normally are not amounts that we can pay out of pocket.

Personal Online Loans
TAE

2,47%

Máximo

$35.000

Loan Range Given

$1,000 to $35,000

Loan conditions
Loan conditions
  • Be over 18
  • Have a valid ID/passport
  • Other requirements may be needed to submit the loan request
Bad Credit Loans
Minimum amount

$500

Maximum amount

$5,000

Loan term

3 to 36 months

Loan conditions
Loan conditions
  • Be over 18
  • Be a US citizen or permanent resident
  • Have a SSN or TIN
  • Have a US Bank Account 
  • Other requirements may be needed to submit the loan request

How do auto loans work?

Understanding an auto loan process is crucial to make a smart purchase without losing money. They are basically personal loans that go towards the purchase of a vehicle. Car loans are installment loans, which means that you have scheduled and regular payments that makes the repayment a more affordable alternative for borrowers. But, unlike personal loans, they are also secured loans where the borrower has to have a collateral in order to guarantee the repayment of the loan to the lender. Usually, the vehicle purchased is the collateral for these debts.

Most auto loans are very simple in amounts. They may include only the borrowed amount (principal) plus the interest rate in year bases. Some lenders may also include some specific fees that are added in the APR. 

An interesting aspect of auto loans is that they vary a lot according to the type of lender you choose (traditional bank, online lender, credit union or car dealership). This is why it is a good idea to shop around and make sure the loan is shaped to the type of car and repayment model you are trying to get.

 

Key parts of an auto loan

  • > Principal: This is the amount borrowed for the purchase, without the fees, interest rate and other extra charges.                       
  •  
  • > Interest:  it is the total amount of the costs of the loan accrued over duration of it based on the principal amount and the stated interest rate.
  •  
  • > Overall loan cost: Total principal + Total interest during the life of the loan. It is also considered the total price of the loan.
  •  
  • > Loan terms: This is the total duration of time you will be with the debt. Auto loans normally range between 3 to 6 years, but it depends on the cost of the car purchased and the capability of repayment of the borrower.
  •  
  • > Monthly payments: The part of the loan you pay every month, which represents part of the principal plus the monthly equivalent amount of the interest.
  •  
  • > Down payment: Some lenders may ask to pay an upfront amount when purchasing the car and it is normally a percentage of the full price.
  •  
  • > Terms and conditions: Since it involves a specific purchase, auto loan lenders may include some requirements in the terms, such as insurance and registrations, and conditions regarding resale, repossession, etc.

 

Steps to borrow for a car

  1. Make a realistic budget: It is essential to determine how much you can afford on your new purchase according to your income and expenses, plus to analyze how long are you willing to pay for the vehicle.

  2. Check your credit score: Even though there are some lenders that will not take this factor into consideration, several entities rely on credit reports to offer loan terms and rates.

  3. Shop around for loans: It is time to start searching and evaluating options. Try to start applying to the options you like the most, but always making sure it will not affect your credit score.

  4. Get Approved: Or better called pre-approved. It is part of the process where your limits have been set and approved by the financial institution. 

  5. Shop for your car: Once pre-approved, you only need to go to your car dealer and pick the one you want while letting your lender about the details of the purchase and the specifications of the car.

 

Pros and Cons of taking out a car loan

PROS

CONS

✅ Immediate access to the vehicle, without paying upfront the full amount.

✅ Increases credit score if you respect the loan conditions.

✅ Several options for car loans in the market.

✅ Benefit in certain car companies, depending on your lender.

❌ Depreciating asset

❌ Risk of default

❌ Insurance considerations

❌ Possible repossession (which can mean a decrease in your credit score)

 

Car Loan Tips

  • Always check on the restrictions of the auto loan, sometimes lenders only work with certain auto dealerships, do not work with private sellers or do not allow the purchase of used cars or certain models/ brands as well.

  • Always check the reputation of the lender and read their fine print before giving further details of your personal information or signing any agreement.

  • Getting a co-signer if your credit is low or non-existent is the best way to guarantee you will be approved for the amount required.

  • Try marketplaces to help you find the best loans according to your profile, your budget and your needs.

  • To avoid late payments, turn on autopay in your loan or make a very well-organized payment schedule.


 

If you are ready to find the best personal loan for you, we match you with the options that suit you better and meet your requirements. Start now!

 

We analyze your profile and match you to the best financial products for you through SWIPE CREDIT

  • Get between $100 and $35.000
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