How Your Monthly Car Payment Is Determined
When shopping for your next vehicle, it’s normal for drivers to have questions and concerns regarding their future car loan. Many wonder how much they’ll owe each month, and if it can comfortably fit within their budget. Interested in learning what factors play a role in determining your monthly car loan payment? Below, we’ve broken down everything drivers need to know about car loan payment amounts.
Car Loan Amount
The total amount of the loan will be the primary factor that determines a drivers’ monthly car payment. As one would expect, the more money that needs to be borrowed from a lender, the higher the monthly payment. Fortunately, there are ways for drivers to reduce the total amount they need to borrow.
The larger a driver’s down payment, the less they’ll owe each month on their loan payment. In addition, drivers who choose to trade in their old vehicle will be able to put its value towards their vehicle purchase, resulting in lower monthly payments as well. Wondering how much your vehicle is worth? The Southbank Dodge team will be happy to appraise your trade-in vehicle.
A loan’s interest rate also plays an important role in determining a driver’s monthly payments. Loans with a higher interest rate will require the driver to pay more each month. On average, drivers with higher credit scores will be more qualified to receive low-interest financing options.
The term of a car loan is another significant factor in determining its payment amount. Drivers who opt for shorter-term loans will be required to pay more each month. While a longer term will reduce the amount owed each month, it will also result in more interest. Because of this, drivers need to take their financial circumstances into account, choosing a loan term that’s appropriate for their monthly budget.
Finance Your Vehicle Through Southbank Dodge
Looking for flexible automotive financing options in Ottawa, Ontario? The team of automotive finance experts here at Southbank Dodge is here to help. We offer a wide assortment of subprime financing options for drivers with low credit scores. Wondering how to get started? Fill out our secure online credit application right here on our website. Once completed, one of our team members will get in contact with you to walk you through the next steps of the process.