Auto Loans

Auto Loan Application Frequently Asked Questions

• How does an auto loan work?

  If this your first auto loan, it's important to understand the basic principles of how this financial transaction works. 

   

  Here are the basic steps:

  • You apply for a loan to pay for your new vehicle.
  • Once approved for a loan, you agree to your loan terms. These include how much your monthly car payment is, how long your loan lasts, and how your finance charge is. Your terms will depend on your credit history. A better overall credit score will typically result in better loan terms.
  • Over time, you'll pay back the cost of your vehicle—with interest—to your lender. The average car loan duration is 36–60 months.

  
  If this is your first time purchasing a vehicle, check out our First Time Auto Buyer Program to see if you qualify for competitive auto financing rates.

• What kinds of factors could impact my interest rate?

  Several components can influence your interest rate. Both lenders and car dealerships consider these factors when calculating your interest rate.

   

  • The information that shows up in your credit report—namely, your credit score—can result in different interest rates. A bad credit score (600 or below) typically results in a higher interest rate.
  • The duration of your loan also matters when determining your interest rate. A shorter loan will typically come with a lower interest rate. This is because you're returning a lender's money to them more quickly.
  • Interest rates are typically higher for used cars than for new cars.
  • A bigger down payment could mean a lower interest rate for you.

  
  Understanding current interest rates is an important part of the car-buying process. Make sure you can recognize a competitive rate before walking into a car dealership.

• Why should I finance my car through Wasatch Peaks Credit Union and not my car dealership?

  Getting a pre-approved loan from a financial institution helps you better focus on what you're trying to do: buy a car. 

   

  With a pre-approved loan, you'll be able to:

  • Understand any issues that might come up with your credit score and how they impact your interest rates
  • Negotiate loan terms that fit your budget—with no unnecessary mark-ups from a dealer
  • Become an informed buyer who understands their options

   

  You can always ask a dealer to match your loan rate and terms or to offer you a more competitive loan. But with a pre-approved loan from Wasatch Peaks Credit Union, you'll at least have some loan research under your belt.