 | Newton Male
is Chairman of the Board of Prairie State Bank of Augusta, KS, with 12 branches in the Wichita area, a position he has held since 1983. He also currently serves as a Director for Western National Bank of Lenexa, KS and the First National Bank of Medicine Lodge, KS and Overland Park, KS. Previous positions held include two terms as Kansas State Bank Commissioner, President of Prairie State Bank, and Assistant Examiner for FDIC. Professional and community involvement comes second nature to Newton. Currently he is on Federal Affairs Committee of the Kansas Bankers Association, Director of Augusta Progress, Inc., and a member of the Augusta Historical Society and the Augusta Chamber of Commerce. In the past he has been very active with the Wichita Area Girl Scouts, Augusta School Board, Mayor of Augusta, Kansas House of Representatives, various positions with the Kansas Bankers Association, American Bankers Association, Butler County Community College Endowment Association, as well as Director positions with several other area banks. Newton has also done extensive work in Russia teaching Russian bankers how to deal with their banking crisis. This endeavor was sanctioned and performed in tandem with the Financial Services Volunteer Corps of New York and the US Agency for International Development. Newton can be contacted at the Prairie State Bank, 512 State Street, Augusta, KS 67010, by phone at (316) 775-5434, by fax at (316) 775-1790, or by e-mail at nmale@prairiestatebank.co |
Banking & Finance
2001-10-01 17:43:00
How do car loans work?
Question: I recently purchased a new car with the help of a car loan. My loan had low interest and allowed me to borrow exactly what I needed. I was curious about how I ended up with such a great deal. What's the typical rate of interest on a car loan? What's the typical amount borrowed on a new car loan?
Answer: Your loan allowed you to borrow exactly what you needed. All too often, too much of the purchase price is financed. Just because you financed what you needed does not mean you necessarily got the best deal. Occasionally, that vehicle will depreciate faster than the loan is repaid, therefore, creating "inequity".How much a bank finances depends on several factors, such as:Make, model and year of vehicle;Term of loan;Borrower's credit and capacity to repay;Borrower's net worth.Interest rates on vehicle loans in today's market could range from 7.0% to 12.0%, and sometimes more. Repayment terms range from one - two years to as much as six years. However, a typical loan term is four years. The rate of interest can depend on many factors, such as those listed above. Cost of funds and competition are major factors in pricing car loans. Whether or not a bank has money to lend also influences how aggressively they price loans and seek new business.Many customers would like to borrow as much as they can on a new car loan. Especially when economic conditions warrant, people elect to leave savings in the stock market, for instance, as opposed to applying a large down payment to the purchase price. Typically, however, a lending institution will finance a certain percentage of the purchase price of a new vehicle, for instance, 80% or 90%.Once again, the required down payment may depend on the customer's credit rating and overall financial condition.
