My Navy Federal Credit Union bank offers auto loan with 4.50% interest rate for excellent credit or so borrowers and for me as a so and so credit (I have been using my first credit card for 9 months) it will be with 8.00% interest. Is that a fair deal or bad for me? I know that our economy is in a down time with banks starting to lower interest rate and such…
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without a significant repayment history, you’re probably getting a pretty good deal.
i hope you’re planning to buy used, not new. A four year old used car saves its owner about $2,000 a year over the same model new car. Insurance is a big part of that [esp. for a single guy.]
8% for someone with “so so ” credit and no previous loans, is not too bad. You haven’t mentioned a key point: for how many months? If it’s 60 months, then it’s a good deal.
The finance charges on a $20000 car loan for 5 years would be about 1/4th of the value of the car. Do you want to pay an extra 23% for the car? (20000 average car loan @ 8% interest gives payments of about 410 per month. When you add it up, you’re paying $24600 for the car, or an extra 23%)
Why not just pay cash for the car?