Auto loans can also be either direct financing or indirect financing. Direct financing happens when you obtain auto loans directly from the bank or any other lending institution. Indirect financing is obtained from the dealership. Often the dealership has a mark-up on the interest rate.

In some auto loans, prepayment fees apply and these refer to the charges of the lender for paying off your loan balance early. Not all lenders and dealerships will charge them and they are not commonly found in auto loans. The full amount of the auto loans are generally applied to the vehicle itself. Also, auto lenders usually will not give more than the value of the car, nor will they allow auto loans to be used for other purposes.

To determine the value of interest rates for the auto loan, there are several factors to be considered: credit history, down payment made, credit risk and general banking factors such as the amount of interest the bank is charged for its borrowings. Generally, the application process takes only a few minutes, but it can be as long as a few hours if there is incomplete information or there are additional requirements.