{"id":21859,"date":"2024-11-07T11:01:32","date_gmt":"2024-11-07T19:01:32","guid":{"rendered":"\/wp-site\/?p=21859"},"modified":"2024-11-08T14:18:18","modified_gmt":"2024-11-08T22:18:18","slug":"whats-a-desirable-amount-for-a-car-loan","status":"publish","type":"post","link":"https:\/\/jerry.ai\/car-loan\/whats-a-desirable-amount-for-a-car-loan\/","title":{"rendered":"What does desired loan amount mean?"},"content":{"rendered":"\n<p><strong>Question:<\/strong> I\u2019m looking at the paperwork for my car loan, and one of the sections is labeled desired loan amount. Should I just put the price of the car I\u2019m buying?<\/p>\n\n\n\n<p><strong>Answer:<\/strong> The desired loan amount is the amount of money you need to borrow to pay for your vehicle. Note that this may not be the same as the list price for your car.<\/p>\n\n\n\n<p>You\u2019ll generally get the desired loan amount from the dealership or from a private seller, depending on where you\u2019ll be buying your car.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Used cars will usually have an exact price, particularly if you\u2019re purchasing the vehicle directly from a private seller.<\/li>\n\n\n\n<li>New cars, on the other hand, often have extra fees attached to them, and you may be offered a loan directly from your dealership of choice.<\/li>\n<\/ul>\n\n\n\n<p>While you can certainly purchase your vehicle entirely through your dealership, you may receive a significantly higher interest rate from a dealership than you would with a different lender.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-you-put-in-your-desired-loan-amount\">What should you put for your desired loan amount?<\/h2>\n\n\n\n<p>When choosing your desired amount for your car loan, use the 20\/4\/10 rule. This rule states that the vehicle you choose is a financially safe choice if:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You can make a down payment of 20%<\/li>\n\n\n\n<li>Your loan term length is four years (48 months) or less<\/li>\n\n\n\n<li>You\u2019re spending a maximum of 10% of your pre-tax income on payments each year<\/li>\n<\/ul>\n\n\n\n<p>Let\u2019s take a closer look at some of these criteria<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Use your income as a guide<\/h3>\n\n\n\n<p>The first thing to look at when determining your desired loan amount should be your income. Remember, car loans have interest attached to them, so you\u2019ll be paying back more than the purchase price of your car (the \u201cprincipal balance\u201d). Monthly payments on your auto loan will go partially towards the interest on your loan.<\/p>\n\n\n\n<p>This is where your income can be a helpful indicator. At most, your loan payments should be 10% of your monthly pre-tax income. If your income fluctuates throughout the year, the total cost of your loan each year should be about 10% of your annual income.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Factor in your down payment<\/h3>\n\n\n\n<p>Your down payment, or the amount of money you pay upfront for your car, should also be determined partially by your income. The payment amount should be at least 20% of the total cost of your car to keep your loan balance at a manageable level going forward.<\/p>\n\n\n\n<p>Remember, the larger your down payment, the less you\u2019ll need to pay in interest, meaning a lower car payment and\/or a shorter loan repayment term. This will also look good on your credit history since you\u2019ll have a better loan-to-value (LTV) ratio, meaning you pose a lower risk of bankruptcy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Consider other costs during your repayment period<\/h3>\n\n\n\n<p>Picking a longer term for your loan may seem like a great idea since it means you\u2019ll be paying lower car payments each month. However, the longer the life of the loan, the longer you\u2019ll be accruing interest on the principal. The higher your annual percentage rate (that is, your interest rate plus any additional fees or charges from your lender), the more you\u2019ll pay each month.<\/p>\n\n\n\n<p>Your loan rates won\u2019t be the only cost to think about, either. You\u2019ll also need to make regular payments for things like car insurance if you want to drive your vehicle. Auto insurance can be very expensive for leased cars if you don\u2019t shop around for affordable rates.<\/p>\n\n\n\n<div class=\"wp-block-jerry-meet-experts\" data-wp-interactive=\"jerry\/meet-experts\" data-wp-context=\"{&quot;modalVisible&quot;:false}\">\n  <div class=\"font-circular text-2xl font-extrabold text-slate-900\">Expert-driven. Built for you.<\/div>\n\n  <div class=\"my-3\">\n    <div class=\"flex justify-between items-center py-3 border-b border-neutral-200 cursor-pointer font-semibold text-gray-900\" data-wp-on-async--click=\"actions.toggleModal\">\n  <button class=\"text-left text-base\" type=\"button\">\n    Why you can count on Jerry&#8217;s articles  <\/button>\n\n  <div class=\"transition data-[visible=true]:md:rotate-180 text-xs iconify i--chevron-down text-gray-500\" data-wp-bind--data-visible=\"context.modalVisible\"><\/div>\n<\/div>\n<div class=\"modal-backdrop fixed bottom-0 left-0 right-0 top-0 z-50 overflow-hidden overscroll-contain bg-black\/70 font-body transition-transform delay-100 duration-0 md:relative md:z-auto [&amp;:not([data-visible=true])]:translate-y-full [&amp;:not([data-visible=true])]:bg-black\/0 [&amp;:not([data-visible=true])]:md:hidden\" data-wp-init=\"callbacks.onModalInit\" data-wp-on-async--click=\"actions.hideModal\" data-wp-bind--data-visible=\"context.modalVisible\">\n  <div class=\"modal-view fixed bottom-0 left-0 right-0 flex max-h-[75%] w-full flex-col rounded-t-3xl bg-white pb-7 pl-7 pt-3.5 transition md:relative md:rounded-none md:pl-0 md:transition-none [&amp;:not([data-visible=true])]:translate-y-full [&amp;:not([data-visible=true])]:md:hidden\" data-wp-bind--data-visible=\"context.modalVisible\">\n    <div class=\"modal-header md:hidden flex justify-between items-center pb-1 mb-1 border-b border-zinc-200\">\n      <div class=\"modal-title text-base font-semibold\">Summary<\/div>\n\n      <div\n        class=\"modal-close-btn wp-block-group w-11 h-11 mr-2.5 content-center text-center\"\n        data-wp-on-async--click=\"actions.hideModal\"\n      >\n        <div class=\"iconify i--close text-gray-500 cursor-pointer\"><\/div>\n      <\/div>\n    <\/div>\n\n    <div class=\"modal-body pr-7 overflow-y-auto\"><div class=\"wp-block-template-part\"><div class=\"flex flex-row items-center gap-2.5 rounded-lg bg-gray-pink px-4 py-5\">\n  <span class=\"iconify mt-0.5 shrink-0 self-start text-xs text-primary i--shield-check\"><\/span>\n\n  <div>\n    <div class=\"font-body text-xs font-bold text-primary\">Our goal is clear, trustworthy information.<\/div>\n    <div class=\"mt-1 font-body text-xs text-gray-600\">\n      Our content is created, edited and fact checked by a team of licensed insurance agents, automotive pros and\n      experienced journalists who know the industry inside and out. Facts are thoroughly researched, verified and kept\n      current, and our editorial team is separate from our business partners, so our opinions &#038; tips are unbiased. All\n      insights drawn from Jerry\u2019s proprietary, aggregated customer auto insurance quotes data provide unique, real-world\n      guidance.\n    <\/div>\n  <\/div>\n<\/div>\n<\/div><\/div>\n  <\/div>\n<\/div>\n  <\/div>\n\n  <div class=\"text-base font-semibold text-gray-900\">Our experts<\/div>\n\n  <div class=\"my-8 flex flex-col gap-8 items-center justify-center\">\n          <div\n        class=\"meet-experts-item group relative flex h-auto w-full flex-none flex-col justify-between overflow-hidden rounded-3xl py-9 text-sm shadow-variant-card\"\n        data-expand=\"false\"\n        data-wp-init=\"callbacks.onItemInit\"\n      >\n        <div class=\"grid h-full w-full grid-cols-1 overflow-hidden px-8 md:grid-cols-4\">\n          <img loading=\"lazy\" decoding=\"async\" width=\"250\" height=\"250\" src=\"\/wp-content\/uploads\/2024\/09\/Liz-Jenson.png\" class=\"size-16 rounded-full md:size-32 col-span-1 md:ml-4\" alt=\"meet-experts-thumbnail\" srcset=\"\/wp-content\/uploads\/2024\/09\/Liz-Jenson.png 250w, \/wp-content\/uploads\/2024\/09\/Liz-Jenson-150x150.png 150w, \/wp-content\/uploads\/2024\/09\/Liz-Jenson-56x56.png 56w, \/wp-content\/uploads\/2024\/09\/Liz-Jenson-120x120.png 120w\" sizes=\"auto, (max-width: 346px) 260px, (max-width: 576px) 432px, (max-width: 720px) 540px, (min-width: 720px) 250px, 100vw\" fetchpriority=\"low\"\/>\n          <div class=\"col-span-3\">\n            <div class=\"my-4 flex-1 content-center font-circular text-lg font-medium text-slate-900 md:mt-0\">\n              Liz Jenson            <\/div>\n\n            \n            <div class=\"text-slate-500 mt-2 leading-6\">\n              <p>Liz Jenson is an insurance writer who specializes in general automotive and insurance topics. Liz\u2019s mission is to produce informative and useful content to help car owners make smart choices when buying cars and car insurance. Since joining Jerry in 2021, Liz has written nearly 4,000 long- and short-form articles on topics including state-specific insurance recommendations, common car insurance questions, and deep dives into vehicle model details. Before they came to Jerry, Liz was a full-time student at Indiana University, Bloomington working on a double major in English and French.<\/p>            <\/div>\n          <\/div>\n        <\/div>\n\n        <div class=\"absolute hidden group-data-[expand=true]:flex bottom-0 w-full h-24 bg-gradient-to-t from-white from-30% to-transparent to-100% items-end justify-center\">\n          <div\n            class=\"flex cursor-pointer flex-row items-center gap-2 my-4 font-circular text-primary\"\n            data-wp-on-async--click=\"actions.onItemExpandClick\"\n          >\n            <span class=\"text-sm\">See more<\/span>\n            <span class=\"iconify i--chevron-down text-xs\"><\/span>\n          <\/div>\n        <\/div>\n      <\/div>\n          <div\n        class=\"meet-experts-item group relative flex h-auto w-full flex-none flex-col justify-between overflow-hidden rounded-3xl py-9 text-sm shadow-variant-card\"\n        data-expand=\"false\"\n        data-wp-init=\"callbacks.onItemInit\"\n      >\n        <div class=\"grid h-full w-full grid-cols-1 overflow-hidden px-8 md:grid-cols-4\">\n          <img loading=\"lazy\" decoding=\"async\" width=\"250\" height=\"250\" src=\"\/wp-content\/uploads\/2024\/11\/Sarah-Gray.png\" class=\"size-16 rounded-full md:size-32 col-span-1 md:ml-4\" alt=\"meet-experts-thumbnail\" srcset=\"\/wp-content\/uploads\/2024\/11\/Sarah-Gray.png 250w, \/wp-content\/uploads\/2024\/11\/Sarah-Gray-150x150.png 150w, \/wp-content\/uploads\/2024\/11\/Sarah-Gray-56x56.png 56w, \/wp-content\/uploads\/2024\/11\/Sarah-Gray-120x120.png 120w\" sizes=\"auto, (max-width: 346px) 260px, (max-width: 576px) 432px, (max-width: 720px) 540px, (min-width: 720px) 250px, 100vw\" fetchpriority=\"low\"\/>\n          <div class=\"col-span-3\">\n            <div class=\"my-4 flex-1 content-center font-circular text-lg font-medium text-slate-900 md:mt-0\">\n              Sarah Gray            <\/div>\n\n            \n            <div class=\"text-slate-500 mt-2 leading-6\">\n              <p>Sarah Gray is an insurance writer with nearly a decade of experience in publishing and writing. Sarah specializes in writing articles that educate car owners and buyers on the full scope of car ownership\u2014from shopping for and buying a new car to scrapping one that\u2019s breathed its last and everything in between. Sarah has authored over 1,500 articles for Jerry on topics ranging from first-time buyer programs to how to get a salvage title for a totaled car. Prior to Jerry, Sarah was a full-time professor of English literature and composition with multiple academic writing publications.<\/p>            <\/div>\n          <\/div>\n        <\/div>\n\n        <div class=\"absolute hidden group-data-[expand=true]:flex bottom-0 w-full h-24 bg-gradient-to-t from-white from-30% to-transparent to-100% items-end justify-center\">\n          <div\n            class=\"flex cursor-pointer flex-row items-center gap-2 my-4 font-circular text-primary\"\n            data-wp-on-async--click=\"actions.onItemExpandClick\"\n          >\n            <span class=\"text-sm\">See more<\/span>\n            <span class=\"iconify i--chevron-down text-xs\"><\/span>\n          <\/div>\n        <\/div>\n      <\/div>\n          <div\n        class=\"meet-experts-item group relative flex h-auto w-full flex-none flex-col justify-between overflow-hidden rounded-3xl py-9 text-sm shadow-variant-card\"\n        data-expand=\"false\"\n        data-wp-init=\"callbacks.onItemInit\"\n      >\n        <div class=\"grid h-full w-full grid-cols-1 overflow-hidden px-8 md:grid-cols-4\">\n          <img loading=\"lazy\" decoding=\"async\" width=\"250\" height=\"250\" src=\"\/wp-content\/uploads\/2024\/11\/Shannon-Martin.png\" class=\"size-16 rounded-full md:size-32 col-span-1 md:ml-4\" alt=\"meet-experts-thumbnail\" srcset=\"\/wp-content\/uploads\/2024\/11\/Shannon-Martin.png 250w, \/wp-content\/uploads\/2024\/11\/Shannon-Martin-150x150.png 150w, \/wp-content\/uploads\/2024\/11\/Shannon-Martin-56x56.png 56w, \/wp-content\/uploads\/2024\/11\/Shannon-Martin-120x120.png 120w\" sizes=\"auto, (max-width: 346px) 260px, (max-width: 576px) 432px, (max-width: 720px) 540px, (min-width: 720px) 250px, 100vw\" fetchpriority=\"low\"\/>\n          <div class=\"col-span-3\">\n            <div class=\"my-4 flex-1 content-center font-circular text-lg font-medium text-slate-900 md:mt-0\">\n              Shannon Martin            <\/div>\n\n            \n            <div class=\"text-slate-500 mt-2 leading-6\">\n              <p>Shannon Martin is a licensed insurance agent and insurance writer with 18 years of experience in the industry. She specializes in car, homeowners, and umbrella insurance and ensures readers can trust content for accuracy and usefulness. Prior to joining Jerry\u2019s editorial team in 2021, Shannon was a founding member of Jerry\u2019s customer response team, building on her 14 years of experience as an insurance professional at GEICO and The Hartford.<\/p>            <\/div>\n          <\/div>\n        <\/div>\n\n        <div class=\"absolute hidden group-data-[expand=true]:flex bottom-0 w-full h-24 bg-gradient-to-t from-white from-30% to-transparent to-100% items-end justify-center\">\n          <div\n            class=\"flex cursor-pointer flex-row items-center gap-2 my-4 font-circular text-primary\"\n            data-wp-on-async--click=\"actions.onItemExpandClick\"\n          >\n            <span class=\"text-sm\">See more<\/span>\n            <span class=\"iconify i--chevron-down text-xs\"><\/span>\n          <\/div>\n        <\/div>\n      <\/div>\n      <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The desired loan amount is the money you need to borrow for your vehicle, which may differ from the car&#8217;s list price.<\/p>\n","protected":false},"author":19,"featured_media":64622,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-advice","format":"standard","meta":{"jerry_authors":"[{\"id\":\"301\",\"type\":\"main-author\"},{\"id\":\"5\",\"type\":\"editor\"}]","jerry_author_ids":[301],"jerry_idx_page_label":"","jerry_meta_desc":"The desired loan amount is the money you need to borrow for your vehicle, which may differ from the car's list price.","jerry_related_posts":"[5856,7065,7567]","jerry_summary":"","inline_featured_image":false,"_lmt_disableupdate":"yes","_lmt_disable":"","footnotes":""},"categories":[16],"tags":[563,111,625],"class_list":["post-21859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-car-loan","tag-car-loan","tag-car-loans","tag-resource_car_loan"],"modified_by":"harveen.sran@getjerry.com","_links":{"self":[{"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/posts\/21859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/comments?post=21859"}],"version-history":[{"count":4,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/posts\/21859\/revisions"}],"predecessor-version":[{"id":64620,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/posts\/21859\/revisions\/64620"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/media\/64622"}],"wp:attachment":[{"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/media?parent=21859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/categories?post=21859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jerry.ai\/wp-json\/wp\/v2\/tags?post=21859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}