a man and woman shaking hands at a car dealership

Understanding Car Loans with Palladino Lending Solutions

Understanding car loans doesn’t need to be an overwhelming or complicated experience, regardless of your current credit situation. The reality is, once you better understand how car loans work, you’re actually better equipped to improve your credit situation. So let the team at Sudbury’s Palladino Lending Solutions remove their stigma by quickly breaking down the basics of car loans.

How does a car loan work?

Car loans are actually quite simple, as your loan will be based on three factors:


The first factor in your car loan is the principal, or the total cost of the vehicle. This isn’t just the sticker price on the vehicle itself, as it will include any fees that the dealership or lender adds to the loan, along with any add-ons, options, extended warranties, etc. When you have subprime credit, some dealerships will tack on additional fees to cover themselves against the risk of lending to you—but with Palladino’s Return To Prime program, you can actually see your interest rates decrease with regular payments.

a wallet with a number of Canadian hundred dollar bills spilling out


The second factor in your car loan is the term, or the amount of time that payments will need to be made. That time is divided by months, and terms usually range from 36 to 72 months—although shorter or longer terms are also a possibility. It’s important to note that shorter terms will generally come with higher monthly payments, while longer terms may have a smaller monthly payment but will result in paying more interest over time. At Palladino Lending Solutions, we understand that everyone’s needs are different and as such we will work with you to pick the best term for your situation.

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Interest Rates

The third and final factor determining the payments of your car loan is the interest rate. This is a percentage calculated by the lender, based on your credit history, that they are charging you to borrow their money. Those with subprime credit can usually expect to pay higher interest rates as they’re seen as a greater risk to the lender. And while many dealerships will charge exorbitant interest rates to subprime customers as their options are limited, the team at PLS will work with you to find both an interest rate and a vehicle that fits into your budget.

a man handing a set of keys over to the photographer/person's perspective

While they may seem complicated from the outside, car loans are actually a surprisingly simple equation. Knowing the factors that contribute to that equation has the ability to remove some of the anxiety from your car buying experience, and adding the transparency and knowledge of the team at Palladino Lending Solutions can help you get the vehicle you want at a payment you can afford—regardless of your credit history. Simply give us a call to get started today, explore our extensive vehicle inventory found here, or fill out our secure online credit application form found here.