You’ve done your research and you’re ready to buy a car! Now it’s time to find the right lender. But how do you know if you’re getting the best auto loan?
There are a few important things to consider in your search for a bank or credit union and the right car loan for your needs:
The first thing you’ll probably ask when you’re shopping for a car loan is, “What will my monthly payment be?” Your payment needs to fit your budget without creating stress when it comes to managing your other monthly expenses. An online calculator can help you decide how much you can afford. Use Marine Credit Union’s Car Payment Calculator to determine what your monthly loan payment might be.
When comparing auto loans, it’s important to understand the annual percentage rate (APR). The interest rate of your car loan will determine how much you pay over the full life of the loan.A high interest rate will mean you end up paying above and beyond the amount you borrow in the form of large amounts of interest. Low, competitive rates will reduce the amount you pay in interest and can also help you achieve more manageable monthly payments.
The loan term refers to the length of your loan or how long you finance your vehicle. This also plays a big role in determining how much you pay over the life of the loan.
The chart below shows what you would expect your monthly payment to be for a 3-year, 5-year, or 6-year loan (assuming a $20,000 loan at a 4.75% interest rate). Pay attention to the “Total Interest Paid” column to see how the total cost of the loan increases with a longer term. As you can see, you’ll pay less in the long run with a shorter loan term.
| Loan Term | Monthly Payment | Total Interest Paid |
| 36 months (3 years) | $597 | $1,498 |
| 60 months (5 years) | $375 | $2,508 |
| 72 months (6 years) | $320 | $3,024 |
When buying a car, it’s important to work with lending staff who understand your financial situation and can guide you through the process. Marine Credit Union lenders are knowledgeable about auto loans and focused on finding the right loan to fit your needs.
Marine Credit Union can help you find the right auto loan to reach your goals. Keep your loan in the community. Get in touch with a Marine Credit Union lender today.
Different goals call for different types of loans. When you’re looking for a car loan, we’ll find the right solution to meet your unique needs.
We don’t think anything should stand in the way of your dreams of ownership. If you’re ready to purchase a car, we’re ready to discover a way to make it possible.
Some lenders have rigid lending guidelines and qualifications that are tough to meet. If you’ve been told “no,” we can help you find the path to “yes.”
All loans subject to Marine’s approval process. Membership eligibility required. Federally insured by NCUA. Equal Housing Lender.