If you’ve ever researched loans and gotten overwhelmed with terms like car loan pre-qualification, pre-approval, and approvals, then you’re not alone. That’s why we’ve developed this handy-dandy guide.

You likely can’t predict the rate you’ll get just by polling your neighbors. Still, a little research never hurts. Here’s the latest data on auto loans—and more importantly, how you can improve your odds of securing a good car loan rate yourself.

Most car loan contracts list two rates, your APR and your interest rate. The higher the APR, the more you’ll pay over the life of the loan. Lenders will give you both rates on your car loan paperwork so that you can better understand your loan.

Most car loans use simple interest, a type of interest of which the interest charge is calculated only on the principal. Simple interest does not compound on interest, which generally saves a borrower money.

You probably know that your credit score is important for getting a loan. However, your credit score is not the only factor that banks and other lending institutions look at when considering you for a loan. Lenders typically look at four primary factors.

The purpose of vehicle service contracts is to pick up where manufacturer warranties leave off.
A warranty from a manufacturer is essentially a promise that your car is in working order.

A loan to value ratio, or LTV, is simply the ratio of a loan amount to the market value of the asset to be purchased with the loan. LTV is a measure of risk. It describes how much of a loan is backed up by real world value.

Guaranteed Asset Protection (also known as “GAP Protection,” “GAP Coverage”, or simply “GAP”), protects you from paying for a car that no longer exists because of an accident or theft.

Tire and Wheel Protection Plans supplement your insurance coverage, protecting you from paying for damage to your car’s tires and wheels when your insurance may not.