| Firstly, what is APR? | | | | In reality, your history of being able to make payments |
| APR stands for Annual Percentage Rate, and it is the | | | | are almost much more important than just having a |
| interest rate that you will be charged on your car loan. | | | | good credit score. |
| If your APR is very high, your monthly installments will | | | | On the other hand, if you have a bad score, you might |
| also be high, meaning that it places an additional | | | | disqualify yourself even from the starting blocks. It is |
| financial burden on you every month as you try and | | | | quite difficult to walk into a car dealer or speak to an |
| keep up with these payment,, as well as add to the | | | | auto financier if your score is looking bad. It places you |
| total amount of money that you will have to fork out | | | | in a position of weakness and a lot of dealers will |
| for the interest portion of your loan. | | | | automatically assign a higher rate (in other words, bad |
| It is therefore really worth while to try and keep your | | | | for you!) to you just based on the fact that your credit |
| interest rate as low as possible. | | | | score is low. |
| Is there a direct correlation between interest rate and | | | | Even though your rate is worked out on a number of |
| your credit score? The answer is: It depends! | | | | factors, such as the term requested, the value of the |
| In theory, you would expect that the higher your score, | | | | vehicle, the age of the vehicle, the mileage on the |
| the lower your APR, correct? | | | | vehicle, the most important factors contributing to the |
| In reality, it is a bit more complex than that. | | | | APR that you will get are determined by YOUR profile; |
| For example, you might have an excellent credit score, | | | | how long have you resided in your current residence; |
| however,let us say that you managed to get credit | | | | how long have you been in your job, and most |
| score by having only one credit card with a limit of | | | | important of all: can you repay this loan? This is based |
| $500 dollars that you rarely use. In this case, you are | | | | not just on your credit score, but on your overall credit |
| not giving the lenders a warm fuzzy feeling around | | | | profile. |
| their hearts that you will be able to repay the loan! | | | | |