For first-time car buyers, there are lenders who allow first-time auto loans applicants. Interest rates for auto loans usually depend on your credit history, whether it is a new or used car and the length of the auto loans. The length of time for auto loans is usually within 36, 48, 60 or 72 months. For shorter auto loans, the interest rates are cheaper. But they do require larger monthly payments than the long-term loans.Auto loans can be classified as simple interest loan. For simple interest auto loan, interest is computed based on the original principal. Not on the interest accrued. Simple interest loans are oftentimes applicable in cases where the loan terms are higher than $25,000 and the term is more than 60 months.

Auto loans can either be direct financing or an indirect financing. Direct financing happens when you obtain auto loans directly from the bank or any other lending institution. Indirect financing is obtained from the dealership. Oftentimes, dealership has a mark-up on the interest rate.In some auto loans, prepayment fees refer to the charges of the lender for paying off your loan balance early. Not all lenders and dealerships will charge them. And they are not commonly found in auto loans. The full amount of the auto loans are generally for use for the vehicle itself.

Auto lenders usually will not give more than the value of the car nor will they allow auto loans to be used for other purposes. To determine the value of interest rates for the auto loan, there are several factors to be considered: credit history, down payment made, credit risk and general banking factors such as amount of interest the bank is charged in order that you can avail of auto loans. Generally, application process usually takes several minutes. But it can be as long as a few hours due to the incomplete information and additional requirements.