Used Car Loan – 3 Factors Which Affect the Monthly Payments
For a lot of Canadians, owning cars is important, as they improve all aspects of their lives. However, not everyone has the necessary finances to pick up brand new cars from the showroom.
If you need an automobile because you are tired of depending on public transport for your daily commute, you can always get a used vehicle. As a Canadian citizen, you should know everything about the used car loan, so that you can make the right decision at the end of the day. Here are three factors which affect the monthly payments of your used car loan:
The most important factor which plays a huge role in determining your monthly payments is none other than your credit score. It includes every single aspect of your credit history, such as previous loan payments and credit card debt. The low credit score will make your monthly payments go up, as the lender finds it risky to lend money. If your credit score is good, you can get a used car loan at low rates of interest.
Length of loan
The tenure of the used car loan is another factor that impacts the amount you pay every month. For instance, if you take a short loan for two or three years, you have to pay higher amounts of interest. You can also take long-term loans, which last for five years or more. The advantage is that it brings down the monthly payments significantly, which makes the used car loan affordable. However, you have to pay larger sums of money, in the long run.
Size of down payment
Another factor that determines the monthly payments of your used car loan is the size of the down payment. If you make a larger down payment, it brings down how much you have to repay the lender. As a result, the monthly payments for the used car loan also decreases.
These are the three factors that affect your monthly payments. If you want to take a used car loan despite your credit score, contact lenders who are experts in this matter!