If you are relatively new to this country, there is a very good chance that you don’t have much of a credit history yet. And, unfortunately, this can make it difficult to get financing for an automobile. However, there are options available that will allow you to both get an auto loan and build your credit.
Since a borrower’s credit background, income, bills and vehicle all determine what their monthly payment will be, there is no way of knowing what their monthly payment will be.
Seven year car loans are on the rise, and it makes sense as to why this is happening. With the average new car price being around $30,000, car buyers have to extend the loan term in order to reasonably afford the most current vehicles the auto industry has to offer. Everyone needs a car, and for those who have a low income or bad credit, the 84 month car loan term seems like the best way to go about achieving that goal. With a lower monthly payment, car ownership becomes a possibility, and makes daily life easier. But does the longer payment term really make things easier? Or are you just paving the way for disappointment in your financial future?
Negative equity, or being “upside-down” in a loan, can cause quite a predicament if you decide that you want to sell a car that has a lower value than what you still owe on the loan. The best way to deal with negative equity is to take preventive measures right in the beginning. However, if you find that you are upside-down in your loan, there are still actions that you can take.
Credit challenged car buyers can purchase a vehicle from an out-of-state dealer. But before doing this and if they live in a state that charges a vehicle sales tax, they should check to see if the dealer’s state is reciprocal. If it isn’t, they need to arrange with the dealer to have a check cut back to them for tax, title and registration fees. Otherwise, these buyers will have to come up with the money out of their own pockets.
Because of the higher risks involved with subprime loans, credit-challenged borrowers usually can’t get approved for a car loan if they’re considering buying a vehicle from a private party.
Dealers don’t determine the down payment amount on car loans, lenders do. In addition to increasing the chances the loan will be paid off, car buyers with tarnished credit should view down payments as a way to reduce interest charges as well as a way of contributing to the success of their credit repair efforts.