Selecting an auto loan can be overwhelming with so many choices. It is worth the investment to research options to identify the lender and product that fits best with your situation. This guide provide some high level information as you embark on selecting an auto loan.

Loan Type: Auto loans are split into 4 categores.

• New: The definition of New vs Used can very by lender. This is typically determined by the model year, mileage, and title.
• Used: The definition of New vs Used can very by lender. This is typically determined by the model year, mileage, and title.
• Refinance: Obtaining a new loans with new terms for a vehicle where a loans is already in place
• Lease Buyout: Obtaining a loan to purhase the vehicle that is currently being leased

Model Year: The year the vehicle was manufactured

Credit Score: The credit score for the borrower. A higher credit score will most likely result in a lower interest rate.

Loan Term: The length of the loan contract, typically expressed in months. The term can range from 24 months to 96 months.

Annual Percentage Rate (APR): APR is the annual cost of a loan to a borrower — including fees. Like an interest rate, the APR is expressed as a percentage and includes other charges or fees such as closing costs and loan origination fees.

Interest Rate: The rate that determines the amount of interest owed. The rate is multiplied by the remaining loan balance to determine the interest amount.

Principal and Interest (P&I): Principal is the payment amount that is used to reduce the loan balance. Interest is the borrower costs owed based on the interest rate