UNDERSTANDING YOUR VEHICLE LOAN

Whether a car, boat, or RV, there’s much to consider with any vehicle purchase. It pays to research not only the vehicle but your financing options. Consider what goes into your vehicle loan:

• Price — This is the amount you’re looking to spend on the vehicle, which will impact your monthly payment and budget.

• APR — The APR, or Annual Percentage Rate, is the interest you pay on the loan. Your credit score, repayment term (length of the loan), car age, and relationship with the credit union determine the rate you pay.

• Payments — The lower the interest rate, the lower your payments, and the less you’ll pay in interest over the life of the loan.

• Term — This is the amount of time you have to repay the loan. If you choose a longer term (i.e., 60 or 72 months), your payments will be lower. If you pay on the loan longer, you’ll also pay more in total interest.

• Fees — Lender fees, like prepayment penalties or application fees, are another point to consider. While Campbell FCU doesn’t charge these unfair fees, some institutions penalize you if you pay off your loan early or charge an application fee, which adds to your cost. 

• Credit History — Your credit score and repayment history are significant factors in determining your loan rate and monthly payment. Your score consists of the length of your credit history, payment record, and credit portfolio. The higher your score, the better.