I'm not entirely following the financing of a possible auto loan I was approved for. For simplicity, if i was approved for a loan up to $100 and they required a down payment of $20, then why would the maximum amount the company will finance $80? It seems to me that if offered $100 dollars then I should be able to finance a $100 car. With what they seem to be doing, if I find one that is $90 then I can't get that auto. Now if i find a car that is 110$ then I would need to come up with a larger down payment to bring the car to the $100 price range and still cover their asking down amount.
I just don't follow how I'm approved for $100 then why am I only able to finance $80. Like the company is going to make money off of offering me one amount, require a down payment, then only finance the amount left once they subtract the down payment from it. That is what they are doing and it feels sketchy. I would be paying a down payment just to be offered something but can't use what they are offering.
I'm not familiar with how loans work. Hopefully I made sense in what I'm trying to ask. Are all auto loans set up this way; paying this company $20 for a $100 loan regardless if I use up that entire loan amount? I've found a car that is 3k less than the total amount offered in my loan. So if they offered me a 5k loan note and I only need 3k of that loan, say pay a asking down payment of 1k, then to me logic seems I would only need to borrow 2k since 1k is going to the loan company upfront to subtract from the price of the car.
wow fast responses. I walked away from the pc, come back and there are answers. Thanks! It is for a used car. I found one that I like for 12k and was approved for 15k. I did the search for a loan online before going to the dealer. I wanted to know what a bank was willing to offer me and what my payments would be before even shopping around. but its one of the finance companies the dealer (carmax) uses so the company is legit. I'm not looking to max out my loan as I just need something for the next 2yrs and not looking to dump a lot in monthly payments.
I was online looking at what documents I would need to bring in and reading the "fine print" when I got confused over this. They are wanting a $1,800 down payment from me. In the "fine print" it says the max they are willing to finance is 12,200.....
....and it just dawned me and made more sense after reading the response from -My Take ON It- and typing this update. So essentially if I were to find a car that was 15k, my loa
I just don't follow how I'm approved for $100 then why am I only able to finance $80. Like the company is going to make money off of offering me one amount, require a down payment, then only finance the amount left once they subtract the down payment from it. That is what they are doing and it feels sketchy. I would be paying a down payment just to be offered something but can't use what they are offering.
I'm not familiar with how loans work. Hopefully I made sense in what I'm trying to ask. Are all auto loans set up this way; paying this company $20 for a $100 loan regardless if I use up that entire loan amount? I've found a car that is 3k less than the total amount offered in my loan. So if they offered me a 5k loan note and I only need 3k of that loan, say pay a asking down payment of 1k, then to me logic seems I would only need to borrow 2k since 1k is going to the loan company upfront to subtract from the price of the car.
wow fast responses. I walked away from the pc, come back and there are answers. Thanks! It is for a used car. I found one that I like for 12k and was approved for 15k. I did the search for a loan online before going to the dealer. I wanted to know what a bank was willing to offer me and what my payments would be before even shopping around. but its one of the finance companies the dealer (carmax) uses so the company is legit. I'm not looking to max out my loan as I just need something for the next 2yrs and not looking to dump a lot in monthly payments.
I was online looking at what documents I would need to bring in and reading the "fine print" when I got confused over this. They are wanting a $1,800 down payment from me. In the "fine print" it says the max they are willing to finance is 12,200.....
....and it just dawned me and made more sense after reading the response from -My Take ON It- and typing this update. So essentially if I were to find a car that was 15k, my loa