New Horizon Title Loans is a business specializing in finding the best auto loan near you!

How do car loans work?

An auto loan, in a nutshell, is about the same as any other loan.  It is a monthly, two-part payment:  a principle payment, and an interest payment. The principle payment is an agreed-upon amount to pay back to the lender each month, and the interest is a smaller amount of money, which serves as a fee for borrowing the money.


What affects the interest rate?

Your credit score plays a large role.  This tells the lender of the degree of risk they are taking by lending you money.

The loan term is also a factor, as shorter terms offer lower interest rates, because the lender will get their money back faster.  Though it should be noted:  a short term will likely result in higher monthly payments.

By putting a larger amount of money down, you show your readiness and ability to pay back the money, which usually causes a lower interest rate.


What to Look for when Choosing a Lender

Whenever you borrow money from someone, you need to make sure they are the kind of people who are going to hold up their end of the bargain, without changing the terms of the agreement without telling you.  You don’t want to be in a position where you have signed a legal agreement with an individual or company, and then they begin making demands or raising interest rates without your knowledge.

In order to avoid these kinds of situations, it is important to get an idea of the kind of people you’re dealing with:

  • Do they act professional?
  • Is the place of business well-kept?
  • Do they have a website?
  • Are there online reviews of the business?
  • Do the representatives have a good attitude towards you?
  • Do the representatives seem like they only want your money?

All these questions need to be assessed before signing a document with them.  The money lending business if chalk-full of people who are sleazy, snake-oil salesmen, who often take advantage of their clients.

Lenders are a dime a dozen, so if one business rubs you the wrong way, don’t worry, there is no shortage of people who want to do business with you.

Loan Fraud

Anytime a customer intentionally gives false information on a legal document, it is considered fraud or forgery.  For minor things, this is not such a big deal, and usually results in the contract being cancelled, and the customer being banned from doing business with the organization.  BUT, if the organization decides to press charges, be that from a loss of profit or dent in reputation, the customer may find themselves in serious trouble with the law.

Because of the consequences, it is immensely important for you to always tell the truth on loan applications, and to use the loan money for whatever purpose you said you would.  For instance, it is considered fraud if you get a car loan, but then turn around and use that money to buy a new sound system.  This can land you in legal trouble, and will be bad for your credit.

Penalties for fraud vary in specifics from state to state, as well as the facts of the case.  In California, most minor cases of forgery or fraud end up with a punishment of a jail sentence of 1 year.  And a felony case has a maximum of 3 years behind bars.


While in Texas, common fraud penalties range from 1 – 2 years in jail, and a fine of $4000 – $10,000.  More serious cases of fraud may land you in state prison for 2 – 10 years, as well as a $10,000 fine.

Other kinds of similar scams and types of fraudulent activities can be read about here: