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Financing a Car with Al Gar FCU

Here at Al-Gar Federal Credit Union, we provide our customers with the ability to apply for both new and used car loans at low APR rates and at flexible terms. The following are a few of the things you should know about the car loans that we offer.

Flexible Loan Term Lengths

we offer new and used car loans with terms of upwards to 84 months. Although you will pay more in interest when it’s all said and done (the longer the loan term is, the more interest you’ll end up paying), a longer loan term can help to reduce the size of the monthly payments, thereby making the loan easier to pay back and making it less of a strain on your monthly finances.

Loan Refinancing Options

If you already have a car loan that you’re paying off, then you may want to consider refinancing, especially if your original terms were not favorable. For example, you may qualify for a better APR through Al-Gar FCU than you had before, which means that you could save money by refinancing.

Gap Insurance Plan

We offer an affordable GAP (Guaranteed Asset Protection) insurance option. By choosing the GAP option, you’ll be protected between what you still owe on your car loan and the amount of money your insurance company will cover if your car is damaged beyond repair or is stolen. Unfortunately, such situations do happen even to car owners who are extremely careful and safe. GAP can end up helping you to save thousands of dollars if such an event were to occur.

Payment Protection Plan

If you are unable to make payments due to medical reasons, then our Payment Protection plan can help you by providing Disability and Life Insurance on your car loan for an additional low-cost monthly payment.

Loan Terms

The following are car loans that we offer here at Al-Gar FCU, including the best possible APRs and longest possible loan terms. Remember, securing the best rates does depend on your credit score, credit history and debt-to-income ratio.

  • New vehicles over $15,000 – Loans for new vehicles from 2014 to 2017 for more than $15,000 can be obtained for a 72-month period with an APR of 3.24 percent.
  • New vehicles over $15,000 – Loans for new vehicles (current model year) for more than $20,000 can be obtained for a 84-month period with an APR of 3.99 percent.
  • New vehicles under $15,000 – Loans for new vehicles from 2014 to 2017 below $15,000 can be obtained for up to 60-month periods with an APR of 2.29 percent.
  • Used vehicles over $15,000 – Loans for used vehicles from 2010 to 2013 for over $15,000 can be obtained for up to a 72-month period with a 3.9 percent APR.
  • Used vehicles under $15,000 – Loans for used vehicles from 2010 to 2013 under $15,000 that are 100 percent financed can be obtained for a 60-month period with 2.99 percent APR. Partially financed loans can be obtained for a 48-month period and 2.79 percent APR.
  • Older used vehicles – Loans for vehicles from 2007 to 2009 can be obtained for up to 60-month periods at 2.99 percent APR.

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Car Loan Basics

Before you decide to apply for a loan in order to buy a new or used car, it’s important that you have a basic understanding of the ins-and-outs of a car loan.

Factors that affect qualification

There are several factors that we take into consideration when deciding whether or not to approve your car loan application. Additionally, these factors can also affect your APR (annual percentage rate). The following are some of those factors:

Your credit score

Your credit score gives us a good idea of how financially reliable and stable you currently are. It’s easier to qualify for a lower interest rate if you have a high credit score because it shows that you are reliable.

Your credit history

Like the credit score, the credit history of a person shows us how financially reliable you are. However, it provides a more in-depth picture of your financial history. Having little or no credit history can be a problem even if you have a high credit score because it means you don’t have much proof of your financial responsibility.

Your debt-to-income ratio

We will also look at your debt-to-income level to determine if you’ll be able to make your payments on time every month. If the size of your debt is too close to the size of your loan payments, we may decide a car loan is not the right option for you at this time.

The size of your down payment

The size of your down payment – if you make one – will have a direct impact on your loan terms and, in some cases, can make a difference for whether or not you qualify for the loan. Typically, a larger down payment will result in lower monthly payments, lower interest rates, shorter loan terms or some combination of those.  

Identifying what you can afford

Most people can’t afford to purchase a car outright, which is why car loans are so common. However, a loan is not free. In fact, you’ll be paying interest on your loan until it’s paid off, which means the more the car costs, the more you’ll typically pay in interest – unless you manage to put down a larger down payment.

The last thing you want is to take out a loan that you can’t afford to pay back. Generally speaking, you should try to avoid spending more than 20 percent of your income on your car loan payments.

If your payments exceed this percentage, you may find yourself on a very tight budget if you’re able to make payments at all. Don’t forget to keep in mind all of your other monthly bills and expenses as well.

For more information about our car loans, be sure to contact us at Al-Gar FCU today at 301-722-5446.