Chevy Auto Loan 101: Chevy Loan Interest Rates Explained by Gillman Chevrolet Harlingen
If you're considering financing your next vehicle instead of signing a temporary lease, you're likely wondering how Chevy loan interest rates play into the total cost. We understand how intricate and confusing the loan process can be, so our financial experts have created this quick explanation to help you fully understand interest rates. Visit us at Gillman Chevrolet Harlingen to learn more today.
What is an Interest Rate?
Most customers can't afford to simply purchase a vehicle in one large lump sum. If you want to buy a vehicle outright, you'll need to finance it. Since financing is basically borrowing money from a bank or other lender, they will expect to receive interest for the amount of time you've been borrowing. When signing an auto loan contract, you'll see this monthly interest represented as a percentage.
What's an APR?
Another important aspect of an auto loan is the annual percentage rate, also referred to as the APR. The APR is a vital component in determining how much your new Chevy vehicle costs. It includes the interest rate alongside any other associated fees, such as closing costs and discount points. This percentage gives you a much better idea of what you'll be paying each month.
How is the Interest Rate Determined?
When signing an auto loan, several important variables affect the interest rate. One of the most impactful is the length of the contract you sign - a shorter three-year loan will require larger monthly payments but have less interest than a longer seven-year loan. Your credit score will also affect the interest rate, so it's vital to improve it as much as possible before applying for a loan.
The interest rate is also affected by the payment you initially put down. A larger down payment reduces the overall loan amount, meaning there's less of a risk for the lender and you'll get a lower interest rate.
Find Your Next New Chevy Vehicle in Harlingen, TX, Today
If you want to see an excellent selection of high-quality vehicles, contact our Harlingen, TX, Chevy dealership. Once you're here, be sure to ask about our current new Chevy specials that can help you get a lower interest rate. Give us a call or stop by to get started!