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Finding an Auto Loan That Fits You


Getting a new or used vehicle can be exciting! But financing your new set of wheels through an auto loan can be intimidating. It’s crucial to look for loans that fit your budget and lifestyle. There are so many auto loan options and numerous factors to consider, many folks don’t know where to begin. But don’t worry, Highlands Community Bank has your back!

We want to ensure you’re armed with the knowledge you need to secure an auto loan and get behind the wheel of your dream vehicle. With our helpful how-to guide and convenient auto loan options, you’ll be in the driver’s seat in no time. We’re here to help you get in control of your finances and gain the confidence to pursue your financial goals.

Determine a Budget for an Auto Loan

The first step in navigating your car financing journey is to determine what you can afford. Consider using the 50/30/20 rule when setting your budget. You’ll split your take-home pay into three categories:

  • 50% for needs (e.g. housing, food, and transportation — including your monthly car payment and related auto expenses)
  • 30% for wants (e.g. entertainment, travel, and other nonessential items)
  • 20% for savings

Experts recommend spending no more than 10% of your monthly take-home pay on your car payment, and no more than 10% to 15% on your total car costs, including gas, insurance, and maintenance. You can use your actual take-home pay amount to estimate what you can afford.

Evaluate Your Credit Score Before Applying for an Auto Loan

Your credit score influences the total cost of your car. Typically, the higher your score is, the lower your auto loan rate will be. Lenders care about your credit because it’s indicative of your creditworthiness — your responsibility as a borrower. Luckily there are some effective ways to build good credit, such as:

  • Paying your bills on time
  • Keeping your credit-to-debt ratio low
  • Diversifying your sources of credit (e.g. having a credit card and student loans)

Lenders like to see a variety of credit when deciding what interest rates to offer you because it shows that you can manage the obligations of borrowing various kinds of debt. You can check out your credit history for free via Credit Karma or by visiting

Keep in mind that the type of car you buy will impact your interest rate as well. Used cars tend to have higher interest rates, while new cars have lower rates. This is because newer cars have more predictable resale value than older cars, which results in a lower interest rate.

Choosing the Right Auto Loan

It’s important to shop around for auto loans to find one that best suits you. While comparing your options, make note of the rates, terms, and fees proposed by each lender. We encourage you to look for at least three auto loan lenders before making a choice.

Highlands Community Bank is proud to offer flexible auto loans with competitive rates. We work with local automotive dealers to give customers stellar lending options. We pride ourselves on providing personalized services to residents of Covington, Clifton Forge, Hot Springs, and the surrounding areas. We’ll partner closely with you to ensure all your needs are met.

Auto Loan Paperwork

While searching for auto loan financing options, you’ll come across varying terms and conditions. There are some key pieces of information you should look out for, such as:

Down Payment

Your down payment is the initial payment you make toward the total cost of the vehicle. Many financing officers suggest making at least a 20% down payment on your vehicle to reduce your principal — the total amount you borrow and thus have to pay interest on. This can prevent you from owing more than your car is worth on your loan in time.

Interest Rates

An auto loan’s interest rate is the amount you pay annually to borrow money expressed as a percentage. This is not to be confused with the Annual Percentage Rate (APR), which is the cost you pay each year to borrow money, including fees, expressed as a percentage.

Repayment Periods

This refers to the length of your auto loan. The repayment period is generally expressed in months. Shorter loan terms in which you make monthly payments for fewer months can reduce your total loan cost. Longer loan terms can reduce your monthly payment but result in you paying more interest and owing more on your vehicle than what it’s worth. Auto loan terms vary from lender to lender, but they can range anywhere from 12-84 month increments.

Auto Loan Fees

There are numerous fees to watch out for in your loan terms and conditions, including:

  • Origination fees: The lenders’ commissions for processing and underwriting your loan application.
  • Registration fees: The costs of registering your vehicle in your state.
  • Destination fees: The costs that cover any transportation/shipping costs
  • Vehicle inspection fees: Ensures your vehicle is up to standards
  • Dealership fees: Other miscellaneous costs that cover dealership fees, additional coverages, etc.

Lenders can choose what fees to charge and when to apply them. For instance, certain lenders charge an origination fee, which is used to cover the cost of processing the loan.

At Highlands Community Bank, we believe in open communication to make banking easy! We want to empower you as a borrower and as a member of our community.

How to Apply for an Auto Loan

Borrowing from Highlands Community Bank isn’t like borrowing from any other bank. Our loan officers keep your best interests in mind and personally review each loan to set you up for success. You don’t have to worry about your application being passed off to a stranger who only is focused on numbers. Plus, you can always visit one of our team members at a nearby branch if you have a question or concern. We’re also just a phone call away, 24/7. Never hesitate to reach out!

Applying for an auto loan with us is simple:

  • Visit the Highlands Community Bank Loan Webpage and click “Get Started” to start your application
  • Select the “Purchase Auto” option from the drop-down menu and select “Next”
  • Enter the amount you wish to borrow
  • Select your preferred branch
  • Choose the length and purpose of the auto loan

If you already have found a vehicle, you’ll be prompted to share the make, model, year, VIN number, estimated value, and whether it’s new or used.

Have the primary applicant’s credentials on hand including a Social Security Number, date of birth, employment details, and income information.

Review all the information to ensure that it’s accurate. Make any changes, if necessary, and submit your application.

On our website, you’ll find a secure loan application portal that is designed to keep you in the loop at all times. In the portal, you can:

  • Check the status of your loan
  • Create and complete the to-do’s throughout the application process
  • Monitor your milestones in the loan
  • Communicate with loan officers if you need assistance

Trust Your Neighborhood Lender, Highlands Community Bank

As your neighbor, Highlands Community Bank is here for you! We want to help each member of this community achieve their goals, and we hope we can assist you in getting on the road in your new vehicle. In addition to auto loans, we’re pleased to offer an array of other convenient services such as loans, deposit products, savings & investment accounts, and more.

Come see us in person or give us a call for assistance with submitting your auto loan application!

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