You buy a new sedan for $60,000, so you borrow money on that amount at 4.99% for six years (72 months). This loan has monthly payments of $966 (72 total). You borrowed $60,000, but the amount you will repay (72 payments of $966) is $69,500. $9,500 plus interest on this loan, the cost of borrowing $60,000 at $4.99% for 6 years.
- Loan amount: $60,000
- Interest rate: 4.99% APR
- Loan term: 6 years (72 months)
- Monthly payment: $966
- Amount paid: $69,500
- Total interest payable: $9,500
Let’s do another case study, to really call work at home.
You buy a new compact car for $30,000 during a promotion at 1.99% APR for four years (48 months). Loans and car loans are the same thing, and so are the previous calculations: this loan has 48 monthly payments of $651, which is a total of $31,235, or $1,235 more than the $30,000 you borrowed. Therefore, the interest on this loan is $1,235, or the cost of borrowing $30,000 at 1.99% for four years.
- Loan amount: $30,000
- Interest rate: 1.99% APR
- Loan term: 4 years (48 months)
- Monthly payment: $651
- Amount paid: $31,235
- Total interest payable: $1,235
Too many stats? Don’t worry, you probably won’t need to do these calculations in real life. Your lender should explain them (certainly ask for them), and it’s also easy to “run the numbers” by plugging the hypothetical data into an online loan calculator.
Your car loan can cover the cost of the car, such as accessories and add-ons, too. Items such as bike racks, trailer hitches, all-weather mats, cargo carriers, winter tires and rim packages as well as paint and upholstery protection can all be added to the amount of the loan or money, spreading their costs over time like a purchase. the price of the car itself.
Check out these currently available car loan interest rates.
| The lender | The term of the loan | APR | Loan amount | Low credit score |
|---|---|---|---|---|
| Spring Finance* | 6 months to 5 years | 9.99% to 46.99% | $500 to $35,000 | N/A |
| Scotiabank | 1 to 5 years | 6% to 10% | $5,000 to $75,000 | Undisclosed |
| BMO | 1 to 5 years | 8.99% to 22.99% | $2,000 to $35,000 | Undisclosed |
| TD Bank | 1 to 7 years | 8.99% to 23.99% | $5,000 to $50,000 | 650 |
| CIBC | 1 to 5 years | 9% to 10% | $3,000 to $200,00 | Undisclosed |
| RBC | 1 to 5 years | 9% to 13% | There is no minimum or maximum listed | Undisclosed |
| Momo | 6 months to 5 years | 9.90% to 46.96% | $500 to $35,000 | N/A |
| Fig Financial* | 2 to 5 years | 8.99% to 24.99% | $2,000 to $30,000 | 680 |
| MDG funds | 3 years | 29.78% to 44.80% | $1,600 max | 560 |
| Easyfinancial | 9 to 10 months | 9.90% to 46.96% | $500 to $20,000 | N/A |
How is a car loan different from other loans?
It may seem similar, but there are some nuances when looking at secured versus unsecured loans. “A car loan is considered a ‘secured’ loan because the car purchased is collateral in the event of a loan default,” explained Gray. The loan is secured by an asset. personal, you can buy anything you want (including a car). Because collateral is not required, interest rates are usually high, too a borrower may need a high credit score to qualify.”
Canadians are always looking for the best car loan rates, even if doing so can save them money.
Source link
