Posts tagged ‘simple interest’

How to calculate new car loan rates

Calculating new car loan rates is most of the time difficult because there are many factors involved in it. Knowing the exact amount needed for the repayment of the vehicle is also difficult. You still need to understand how the Annual Percentage Rate (APR) and the Annual Percentage Yield (APY) affects the loan rates for a new vehicle despite the abundance of online car loan calculators. This article explains the APR and APY to help you get a better idea on how the new car loan rates are calculated.

Annual Percentage Rate (APR)

The Annual Percentage Rate is a popular concept used by lenders when you inquire about the interest rates of the loans they offer. This may sound common but only few car buyers know what this concept really means.

Factors used by lenders to calculate car loan interest rates

There are many factors that most lenders use in calculating car loan interest rates. This makes the interest rates one of the aspects of a car loan that is difficult to understand. However, you can somehow obtain a rough estimate of your car loan rate by knowing some of the factors used in the calculation. This article provides some of the factors used in the calculation. This includes the following:

Credit history

The borrower