What Is An Interest Rate?


Nowadays, much of the economy is based upon the concept of making profit by loaning money to other people.  This profit comes in the form of interest.  Interest on a sum of money is determined by establishing a rate of interest.


You may be wondering, “What is an interest rate?”


An interest rate is the percentage of an amount of money charged for its use.  This rate can vary widely depending on what purpose the money is being lent out and by whom.  For example, a person buying a home can get a mortgage loan with an interest rate around 3 ½ percent; however, someone who is applying for a credit card may find their rate of interest charged to them every time they make a purchase to be upwards of 20 percent.


There are two general types of interest rates.  There is a fixed rate and a variable rate.  The fixed rate is set at a certain amount and does not change during the period of the loan (unless the debtor defaults on the loan).  The variable interest rate can change while the loan is being repaid.  Some interest rates are tied to fluctuating global financial markets and increase or decrease as the market changes.  Other variable interest rates will change based upon a predetermined schedule.


An example of what is an interest rate and how it works can be seen by assuming you borrowed a thousand dollars from your bank and agreed to pay it back over a year’s period of time.  The bank agrees to loan you the money and charges you an annual interest rate of 10%.  Ten percent of one thousand dollars is one hundred dollars.  This one hundred bucks is bank’s return, or profit, for loaning you the money, and your total loan would be $1,100 and your monthly payments would be $91.66.

Looking for a car loan in Toronto? Loan Doctor can get you approved for car financing in Scarborough, regardless of any past credit issues. Let us help you find a quality used car or truck, along with an auto loan in Markham, that matches your lifestyle and your budget.

3 Tips For First Time Car Buyers

  1. Calculate a realistic budget. To calculate your budget, subtract your calculated monthly expenses from your income after withholdings have been taken out (net income). Be accurate yet liberal when calculating these expenses: you probably spend more than you think you do. It can help to save all of your receipts for a several months and use receipts to calculate your average monthly expenditures. What money remains after you subtract expenses from net income is roughly the money you have available for the car loan in Toronto, the car insurance, mechanical maintenance, and petrol. But, better to be conservative and cut this figure by a fourth to a half than to end up with a loan you may default on. This is one of the most important tips for first time car buyers.
  2. Know your needs from your wants. Yes, you may want a convertible or the newest and shiniest vehicle on the lot: the one with all the frills and gizmos and satellite radio and seat warmers. Do you need that? Probably not. Can you afford it? Refer to your budget! Regardless, you should prioritize your needs over your wants. Your needs are determined by what you will be regularly transporting and in what kind of anticipated weather and road conditions and over what distances. That being said, if there are a few “wants” that stand pretty high on your list of what constitutes vehicular satisfaction, it can be better to spend a little extra money now to get a car that satisfies you than to have to go through the car buying process again months down the road because your car just doesn’t do enough for you.
  3. Research your car options. This is easy to do online. Find consumer reviews and professionals’ reviews of the makes and models you’re interested in. Look into the Kelley Blue Book to find out about the longevity of the resale value of the car you’re looking at and to find out what resale prices are realistic if you’re looking to buy a used car.  Before you go to a dealership, know what makes, models, and years you want to look at, and what they’re worth. The more informed you are, the better choice you can make. Let Loan Doctor Toronto help you with your next car purchase today! We will find you a quality used car, and car financing in Scarborough!

Even With Bad Credit You Can Still Get A Loan

Just because you have bad credit does not mean you should not be able to get a car.  A car is vital these days.  You need a car to get to your job, school, store and other important places.  Having a car is an essential part of life.  If someone tells you there is no way you can qualify to get a car loan with bad credit, you should know that there is a way.  We approve bad credit car loans in Scarborough and can get you into a car quickly and easily.


Most lenders will look at your employment history and your income to determine if you can get approved for a car loan or not.  Credit is not always the deciding factor.  It is more important that you have money coming in so that you will be able to repay your loan.  If you have a steady job and income, getting approved for a car loan will be easier than you think.


Although not everyone will give you are car loan,  there are places that specialize in giving car loans to people with bad credit.  Private lenders generally work on getting loans for people with less than perfect credit.  They understand your situation and financial strains and are willing to give those with bad credit a second chance to prove they can handle a car loan.  It’s important to do your best to pay your loan on time so that you can start to rebuild your poor credit.  This is your chance to start over and get your credit score higher.


Another option for getting a car loan in Toronto with bad credit is to have a co-signer.  This means if you default on your loan, the co-signer will be responsible for paying the loan.  You should still make sure you pay the loan yourself so that you do not hurt the credit of your co-signer.


If you have bad credit, do not worry.  You can get approved for bad credit car loans in Toronto and be driving again in no time.

Is a New Car Worth it?

When you see all the car commercials on television, you may get the urge to go to a local dealership and look at the new models.  Every year the vehicles become more advanced, sleek in design, and have features that make it seem much better than your car sitting in the driveway.  When can you know if you should buy new or used vehicle?  Is it worth the price tag for a new car or should you try to find a used car with low mileage and a solid year and model?

One of the best tools you can use is the internet.  Research online what people are saying about the upcoming year models and if they compare to the older models.  You can also glean a lot of information by looking at the prices for the older models.  Most of the time you are not going to buy a used car with high mileage that is over five years old as there is no point to buying that type of car.  You may want to purchase a used car with lower mileage and one that is known to hold its value.  There are certain cars that will retain their value and others that will not.  If you are looking to buy a new or used vehicle, you may want to consider the fact that you may sell it down the road.  You can make the decision to buy a car that is a good deal right now but may not hold its value or buy a more expensive car that will be worth more in the long run.  You will need to consider whether you should buy new or used vehicle before you head to the dealership.

It comes down to whether or not you can afford the new car or the older car and the issues that can come with both options. The new car will have warranties, new features, but may also have a higher price tag, meaning a higher payment on your car loan in Toronto that will decrease quickly and the model may have deficiencies that are not yet known.  The used car may have some problems but the initial investment will be lower.  The question of should you buy new or used car in Toronto comes down to personal preference and budget.

Choose The Right Used Car For You

An important part of choosing a used car is to be able to effectively examine your wants and needs and your used car.  A lot of people jump directly into the wants by heading down to their local used car dealer and find the snazziest car they can find.  While that strategy certainly makes fur a fun trip, you may find that you left out a few things that you will regret further on down the road.  By having a cooling off period ahead of time, and calmly generating your wants and needs and your used car, you will make a better choice.  And it will still be fun!

The first step to determining the wants and needs and your used car is to write down what you need the car to do.  Do you need it for work?  Do you need it to carry heavy loads?  Do you need it to carry lots of people?  Do you need it to be large enough for a baby safety seat?  While you are making this list, you may be tempted to put something like: you need it for off-road driving.  Only you can determine whether this is a want or a need, but you do need to separate your wants into priorities to give yourself some decision room later.


Next generate your wants.  This is the fun part.  Put down everything you would like without being “noble and self-sacrificing”.  If you want a sports car, write it down.  If you want it to be cherry red, that’s good to.  If you want it to be a babe magnet, well, it’s your list.


Now check your finances. Do you need a car loan in Toronto?  Can you afford the car that has all of your needs?  This is the critical part.  If the answer is yes, and you have room for more, then incrementally add your favorite wants until you hit your price point.  This responsible way of prioritizing what you want in a car against your finances will give you the most short and long term satisfaction. Even if your credit isn’t perfect, Loan Doctor can get you approved and driving today. Apply for your car loan in North York!