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Auto Loan Payments

Understanding how car loan payments work is very important. Below is some information that will help you get a strong grasp on the entire car loan payment process. **When buying a new or used car, the amount of down payment you leave on your vehicle will effect what your car loan payments are and what kind of interest rate you receive.

What makes up a car loan payments?
An auto loan payment consists of three parts, principal, interest and term. The principal is the price of the car you are purchasing. The auto loan interest rate is the percentage of your loan that you pay Premier Auto Financing for providing you with your loan. Your rate will be determined by what kind of credit you have. The term of a loan is the amount of time that you are agreeing upon to pay your loan back.

For example, if you purchase a car for $10,000, and take out a 60 month car loan with an interest rate of 6%, your monthly payments would be $193. The total cost of your loan would be $11,580. Use our car loan calculator to calculate different car costs and interest rates to see what your monthly payments and total loan costs would be. There are some disadvantages to taking out a 60 or 72 month car loan.

How often do I have to make payments?
Your finance payments are going to be due once a month.

Will I save money in interest if I make additional payments in principal every month?
Let's say you have a 60 month car loan that require monthly payments of $375. You are interested in saving money in interest so you start making payments of $450/month. Are you going to save money over the life of loan? No.

Unfortunately, the extra payment towards your car loan does not go towards the principal of the loan. The only thing your additional payments will do is take time off of your loan. You are still going to pay the same amount in principal, and in interest.

Is there any benefit to paying more every month?
Let's say, over the span of two years, you make extra payments that value to an extra eight months worth of payments. You now have the option of skipping eight months worth of payments whenever you want. You can do it now, or you can choose to have your auto loan end eight months early. Premier Auto Financing does not care how you make your payments, or when, as long as the funds you owe are received on time.

Also, if you are looking to trade-in your car before your loan expires, and you have been making additional payments every month, you will have less of a settlement to pay on your loan than if you did not make more payments.

Are there any penalties for paying off my car loan early?
When you finance an automobile with Premier Auto Financing, there are no pre-payments penalties.

What if my payment is late?
If you are late for more than 60 days, your credit is going to be reflective of this. If you are late more than 120 days, your car is going to be repossessed.

What happens if I can no longer afford my car loan payments?
If you can not make your auto finance payments anymore, you can either sell your car, or refinance. You can learn more about what your options are if making payments has become difficult.

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