What is an Auto Loan? - Answering Service Resources

Home
>
Loan
>
What is an Auto Loan?

What is an Auto Loan?

An Auto loan is basically another name for a car loan. An auto loan is an agreement between a lender and a borrower in which the lender gives the borrower money and the borrower promised to pay back the amount of the loan and the interest. Auto loans are only offered for the purpose of purchasing a vehicle.

Auto loans are the most popular type of loan that people apply for. Auto loans, as the name suggests, are unsecured loans specifically designed for the purchase of a vehicle.

An auto loan is a type of credit offered by a bank or other lender for the specific purpose of buying a vehicle. You then pay back the loan over a set period of time.

If you are taking out an auto loan it is very important that you find out the Annual Percentage Rate (APR) that the lender is offering. This is the yearly charge for the loan, a low APR means a cheaper loan.

The payments you make consist of both the principal amount of the loan plus interest. With this type of loan you own the vehicle from the time you buy it. Auto loans are form of personal loan of which there are several basic types with slightly different conditions attached.

Auto loans can be seen as the riskiest of loans from the lender's point of view. This is because an auto loan is for an asset that depreciates very quickly. Thus you will find that auto loans have generally a higher rate of interest than any other type of loan.

One of the advantages of getting an auto loan is that when you get it before you go to the dealer, you can negotiate as a cash buyer. Often you will save money when you negotiate from a cash buying position.

The main disadvantage of an auto loan is that, like any other loan, it must be paid back. Before you get a loan, make sure you are capable of making the monthly payments. You can seriously damage your credit if you default on an auto loan.

You may freely reprint this article provided the author's biography remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

In The News:

Washington Times
Data prove untrue charges that push for affordable housing caused ...
The Miami Herald, FL - 19 hours ago
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height ...
The Democrat Housing Crisis NeoConstant Journal of Politics and Foreign Affairs
ARM Holders Would Do Well to Shop Around Now Washington Post
McClatchy Investigation Puts the Lie to Neil Cavuto News Hounds
Tampabay.com - Sunday Paperall 210 news articles

• Q&A: Why the loans for auto makers?
MLive.com, MI - 29 minutes ago
Please don't submit any information to us. by John Mulcahy | The Ann Arbor News Congress recently approved giving $25 billion in loans to the US auto ...

Turn to 10.com
Coast banks: 'We are lending'
SunHerald.com, MS - 11 hours ago
South Mississippi has not been a part of that," she said, referring to subprime mortgage loans that have led to problems for banks in other parts of the ...
Market news this week for strong stomachs San Francisco Chronicle
Fed lays out details for bank loans The Associated Press
Glossary: Translating the financial crisis International Herald Tribune
The Market Oracle - The Associated Pressall 1,649 news articles

Loans to low-income led to current crisis
Indianapolis Star, United States - Oct 10, 2008
In 1995, the Clinton administration implemented revisions to the CRA, which are credited with greatly increasing the number of home loans to low-income ...
Update on polls, blame for the subprime collapse Atlanta Journal Constitution
Subprime scapegoats Boston Globe
Blame Game Gets Nasty When It Targets the Poor Washington Post
AlterNet - Times Record Newsall 54 news articles

Boston Globe
Candidates offer new proposals to aid investors
Boston Globe, United States - Oct 11, 2008
To help small businesses unable to get credit, Obama called for the government to provide affordable, fixed-rate loans to small businesses, ...
Obama, McCain Scramble to Address Voters' Fears Wall Street Journal
McCain, Obama offer dueling ideas to save economy The Associated Press
Candidates Present 401(k) and Small-Business Plans New York Times
Xinhua - MSNBCall 236 news articles

Telegraph.co.uk
Palace: There’s no need for IMF loans
Malaya, Philippines - 54 minutes ago
BY JOCELYN MONTEMAYOR PRESS Secretary Jesus Dureza yesterday said the country does not have to secure emergency loans from the International Monetary Fund ...
Video: IMF: Timing right for G7 ReutersVideo
G7 meets as IMF offers loans to struggling economies London Stock Exchange
Finance officials comments at IMF meetings Reuters
Malaysia Star - Foreign Policy In Focusall 1,976 news articles

Los Angeles Times
Liar loans, flippings contribute to financial, housing crisis
Hattiesburg American, MS - 4 hours ago
To make homes more affordable as prices rose, lenders extended the length of the loan, increased the loan-to-value ratio, and used low "teaser" rates on ...
Video: Stocks Fluctuate After Fed Corporate Debt Plan AssociatedPress
Dow drops more than 350 on worries on financials The Associated Press
Main Street's Rescue Washington Post
San Francisco Chronicle - Wall Street Journal Blogsall 3,696 news articles

$339-M WB loans approved
BusinessWorld Online, Philippines - 16 minutes ago
THE BANGKO SENTRAL ng Pilipinas (BSP) has given its go signal for the government to iron out the terms of two foreign-funded infrastructure loans. ...

Colleges, students worry about student loans
Orangeburg Times Democrat, SC - 10 hours ago
By LEE TANT, T&D Staff WriterSunday, October 12, 2008 College students are taking out more loans to cover expenses despite many lenders leaving the industry ...

Editorial: Helb wrong on ‘parallel’ loans
Business Daily Africa, Kenya - 1 hour ago
By inviting students in the parallel degree programmes to apply for loans, the board set itself up for criticism and raised doubts about its ability to ...

loans - Google News

Answering Service ResourceAnswering Service Resource