Understanding APR | Allentown, PA
The finance team at Rothrock Motors is committed to ensuring that our customers are well-educated about the financing process. Our team fields a lot of questions about the Annual Percentage Rate (APR), which is why we have put together a handy guide to help you understand the term and what it means for you.
What Is APR?
If you are familiar with the concept of loan interest, you will be happy to learn that APR is very similar. When you invest money in a savings account, your bank pays you interest on your investment as thanks for letting them hold onto your funds. Likewise, when you borrow money from a bank to pay for a vehicle, your financial institution charges you interest as payment for allowing you to use their money.
Interest is a significant portion of APR, but APR also includes the annualized cost of any transaction or origination fees associated with your loan. Your APR is the total percentage of your loan balance you will pay to your bank in a year.
Why Does My APR Matter?
APR matters to you because it increases the amount of money you have to pay each month for your vehicle. If you purchase a $30,000 car from Rothrock Motors and you finance it for 60 months, it might be tempting to assume your payment would be $500. However, an APR of five percent will increase your monthly payment to approximately $566. Higher APRs equate to higher payments, which means your APR plays a vital part in budgeting for a new car.
How Can Rothrock Help?
The Rothrock Motors finance experts are here to guide you through the vehicle purchase process. Even if you have never purchased a car before, we can assist you through filling out paperwork and explaining any unfamiliar finance concepts. We work with banks on your behalf to help you secure the lowest APR possible and help make your dream car even more attainable. Our finance team is experienced with helping individuals with limited or unfavorable credit history secure a vehicle loan, so don’t fret if your credit score isn’t where you’d like it to be.
Call or e-mail the finance team at Rothrock Motors today to begin the loan application process or learn more.