If you have thought about getting a new car but don't have the $ 25,000 or more in cash to pay for it all at once, then chances are you will need a car loan. If you have great credit then the auto world is your oyster. You can pretty much choose any car you want. Your interest payments will be lower than a person with bad credit and you may qualify for other discounts. But if you are not as fortunate to have perfect credit then your scenario may look something like this.

If you have average credit then your credit may look like the lender will offer you a decent interest rate, not too high and not too low. So you may get an interest rate that is more than you wanted to pay but you can lower your month payments by simply expanding the length of your loan. If you choose a 48 month lease then extend to 60 and lower the payments or at a later time you can check into refinancing the loan.

More and more people are using the 60 month loan to stretch out their payments and lower the monthly payments as well. Check to see if there are any early payment penalties. Sometimes when people take a car loan and stretch out the payments for 60 months in order to get the lesser amount of monthly bills they often save up enough and pay sooner but some loans have a penalty for that.

You would not think about that because what kind of sense would it make to give a penalty to early payment but if you think about from the side of the lender they are missing out on the monthly interest so some don't like early payoffs. Some charge such a high amount of interest it is all they can do from charging a flat rate. If in some cases you have the money in advance to pay off the loan a year early put aside that money and draw from it every time you want to make a car payment. Most of the time if there is only a few months left on the lease then lenders will let the early payoff slide.

These are all things you have to think about when you decide to take on a car loan. Make a list of questions to ask when you are going for a loan and see what lender can offer the best rates.