Gloridaze
You are tired of your old beater and ready to upgrade to a newer, more reliable model. Before you apply for that car loan, here are five questions you should answer to ensure that you secure the best possible loan.
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What can I afford?
Consider carefully what you can really afford. We are always sidelined by the quoted price of a car and assume that it is easily affordable. However, you need to look at all aspects of the car loan. What will it cost you in interest and service charges for the duration of the loan and will you be able to manage the payments today and tomorrow? There are several car loan calculators available online that would provide you with some important information.
<a data-snax-placeholder="Source" class="snax-figure-source" href="https://pixabay.com/en/photos/loans/" target="_blank" rel="nofollow noopener">https://pixabay.com/en/photos/loans/</a>
How is your credit?
You really don’t need any surprises when you go for that car loan so it is imperative that you clear up old debts that could harm your car loan application. You should first get a credit report and review your credit score carefully. If you have no credit (no loans, credit cards) it would be a good idea to establish some credit before applying for the loan. No credit does not necessarily mean “good credit”
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How do loan rates compare?
When shopping for a car, we are often drawn to the dealership first. This is understandable since that is where the shiny new cars are located. The problem is that we are then subject to just one car loan quote –that of the dealership. Purchasing a car and securing a car loan warrants the same diligence that would apply to any on other shopping expedition for high priced items. Just securing a loan with ½ a percentage point interest lower than the other can make a huge difference in the overall cost of the car.
<a data-snax-placeholder="Source" class="snax-figure-source" href="https://pixabay.com/en/financing-rates-financial-purchase-105727/" target="_blank" rel="nofollow noopener">https://pixabay.com/en/financing-rates-financial-purchase-105727/</a>
Bad credit, what options do I have?
If your credit is bad don’t despair. There are many finance companies that cater to people wanting car loans who have bad credit. Consider the many lenders online who offer car loans even with bad credit. The same diligence should be exercised when looking for a loan with bad credit. Check out the lender and ensure you are satisfied with their terms. Better yet, check out more than one lender and compare offers. You should know that your credit history will determine the kind of interest you pay and the terms of your repayment.
<a data-snax-placeholder="Source" class="snax-figure-source" href="https://pixabay.com/en/photos/debt/" target="_blank" rel="nofollow noopener">https://pixabay.com/en/photos/debt/</a>
How long do you intend to keep the vehicle?
This is a good question to ask before taking a car loan. Of course, you can’t tell what the future holds, but you should have a fairly good idea whether the car loan is for the purchase of a car you will keep for the next 10 years or whether you will want to buy anew one in about 3 years. Your answer to this could determine whether you even need to purchase the car outright or lease it instead. Regardless of which option you choose, it is still essentially a car loan for a specified period.
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Before taking out a car loan, ensure that you shop around for the best rates, check your credit score and consider your financial status today and what it will be in the future. If you have bad credit, you may still be able to get a car loan even though it may cost you more in the long term.
Because we are going debt-free, I’m very grateful for my 1992 Ford station wagon. But I’d love to replace it one day. Thank you for your financial advice.
As long as it runs no need for another, but I am sure you will get one when the time is right.
Very useful information. I think we have to be careful about all the loans.
So true it can be a positive and negative experience
This is a very practical post loaded with great personal finance tips. But what I would really like to know is where to get the outfit the lady in the picture is wearing. LOL.
My sons use Craig’s List to find used cars to buy. They try to avoid loans and pay cash. But if they ever decide to take out a loan this post has good advice for them to follow. They should also consider the cost of insuring the vehicle.
I too would like an answer top that question – it is a cute dress. True, sometimes the cost of insurance is that last thing you think when buying a car but it should be be an important consideration.
excellent, informative article
It is so easy to overlook the little things when we are excited about a new purchase
Important message for those car shopping.