Factors that Affect Interest Rate When Applying for a Car Loan

If you’re considering car financing in Michigan, Wisconsin, or Idaho, the experts at Xpress Cash are here to help. We’ll lead you through the process from start to finish and make sure you understand everything from what forms to file to get started, to what your down payment should be, and even the factors that determine how much you’ll have to pay for that new loan.

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What Factors Affect Your Interest Rate When Applying for a Car Loan?

Buying Your Teen's First CarThere are a number of issues that could determine what your interest rate will be. Some are obvious, but others might come as a surprise:

  • Debt to Income If too much of your monthly income is going toward debt payments, you could be seen as a high risk and it may affect how much lenders will charge you.
  • Credit Score If you’ve missed a few debt payments, or have excessive unpaid bills, your credit score can be negatively affected, making your rate higher.
  • Down Payment As a rule, the higher your down payment, the less risk to the lender that you’ll default and the better rate you can expect.
  • Age of Vehicle Since newer cars are worth more – and a lender can get more of their investment back if they have to repossess it – they typically earn a lower interest rate.
  • Contract Term Shorter term loans tend to have lower interest rates because lenders expect to get their money back from you sooner, and have a lower risk of losing it all.

Why Choose Xpress Cash?

Our knowledgeable finance professionals can help you review your expenses and credit information to identify the things that might affect your car finance interest rate, maybe even helping you save money in the process. We’re dedicated to helping you get the quick cash you need at a low rate that will help you stick to your budget.

Let Xpress Cash Help You Navigate the Confusing World of Car Financing

Xpress Cash can help understand the factors that affect your car financing interest rate, as well as the ways you can bring your costs down. Contact us to find the branch nearest your Michigan, Wisconsin, or Idaho location and get started now.