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Ciphering through the various loan definitions available to you when searching for new or used car financing takes a little time, but it is worth it. By choosing the right kind of loan, you can get the most favorable interest rate and loan terms for your situation.
Prime Rate LoanIf you qualify for this type of auto loan, you have outstanding credit and are able to secure a loan with the low advertised rate. With this loan, you enjoy the most favorable terms.
Sub-Prime LoanThis is a loan geared for borrowers with spotty credit or a bankruptcy in their past. It will come with a higher interest rate to compensate for the risk involved to the lender.
Student Auto LoanDesigned specifically for college-aged students, this loan is less difficult to obtain, but it comes with higher interest rates because of the poor or absent credit rating among most students.
100% Financing LoanThis loan lends you the full price of the automobile you are purchasing without the need of a down payment. It comes with higher risk, so the interest rate will be higher.
Military Auto LoanMembers of the armed forces are eligible to receive a military car loan, typically a type that comes with a reduced interest rate and better terms for the borrower.
There are numerous types of car loans, each of which has its own definition. However, they all share common elements including the principal amount borrowed, an interest rate and a period of time you have to pay it back.

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