May 2011 11

How Much Do Car Loans Cost from Boston Nissan Dealers

When you are thinking about buying a new Nissan, unless you have money in the bank or under your mattress there is a good chance you are going to need a car loan. If you’ve never had a car loan before, you are probably wondering how much a car loan is going to cost you. Before you get a car loan from Boston Nissan dealers, here’s what you need to know:

You Have Options For Car Loans

You do not have to get a car loan from the Nissan dealership. You can choose to look at car loans from your local bank, credit union, or any other lender you choose to see if you can get a better deal someplace else. A car loan is a contract between the buyer and the lender, and it specifies the amount of money being borrowed, the interest rate, and how long you have to pay it back. Car loan payments consist of interest and monthly principal payments, unless you are lucky enough to get a car loan with 0% interest, in which case the entire payment is going toward the principal balance.

The Cost of Car Loans

How much your car loan actually costs you depends on your interest rate. If you know you’re borrowing $20,000 for 60 months and your monthly payment is $375, then you can figure out how much you’re repaying. Multiply the monthly payment by the number of months – in this case, you’ll pay $22,500 for the car, which means $2,500 is interest and is the cost of your loan. Often, you can pay more than the minimum car payment each month to help reduce the total amount of interest owed.