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When you take out a loan on a car near St. Louis, interest is par for the course. So, how much does interest actually impact your first car loan payment, as well as the payments going forward. Below, you’ll learn more about how to calculate an interest rate on a car loan, and how that interest will affect your payment. Read on for more information from the team at Green Light Auto Credit!
First, let’s answer the question, “What is an interest rate?” When you finance a car, you’ll be charged interest, which is essentially what you pay the lender for using their funds to buy your vehicle. What determines your interest rate? It can be difficult to narrow it down to just one deciding factor, but the following hold considerable weight:
How much interest can you expect to pay with your first car loan payment? Use this simple calculation below to find out:
After you’ve begun chipping away at your auto loan, you can use the following calculation to estimate what you’ll pay in interest going forward:
While you may not get an exact calculation due to rounding and human error, the above methods will give you a good estimate.
If you have additional questions about how to calculate an interest rate on a car, contact us at Green Light Auto Credit! We’ll walk you through each step and help you get behind the wheel of the vehicle you need to get around St. Charles and Florissant. We can also answer any related questions you may have about trading in a car to lower your principal amount or APR vs. interest!