As we discussed in my previous blog, "Budgeting Your Habits," learning how to manage your money is a skill you need in order to achieve financial stability. Today, we are going to focus on the ways a good budget can help you get a car loan, even if you have bad credit.

Here at Auto Credit Express, we want to give our customers the knowledge they need to be financially successful.

Maximize Your Benefits

There is no way around it. Budgeting is a skill that takes time to cultivate. Once you've mastered it though, it will open up a whole new world of possibilities. Here is some information that shows you how you can get further, faster.

How a Budget Can Help You Get a Car Loan

When emergencies happen, you've got it covered. In the event that your current car breaks down, you have the funds available to make a down payment on your car. It's up to you how much you want to put towards the down payment. With that said, the more you put towards a down payment, the less you need to borrow for a loan. In addition to that, you will have equity in the car. Also, in most cases, you can get a better interest rate if you have a bigger upfront payment, since you have a lower risk of defaulting on the loan.

You might be able to pay more than the monthly payment. As you budget, knowing where and when you can cut other costs becomes far easier to determine. This increased perception will better allow you to figure out when you can make extra payments. These extra payments can add up and help you save.

For instance, if you bought a car for $15,000 and put $3000 down on the car, that leaves $12,000 to pay on your loan. At a 12% APR, your monthly payment will be $316.01/mo for 48 months. If you pay an additional $1,260 per year – approximately $105 monthly, or 4 extra full payments per year, you will shave off a full year from your loan and save $971.90 in interest. Since you made headway on the principal balance, it gives you an extra year of driving that car payment free, allowing you to reallocate that money you had for the car payment.

How a Budget Can Help You Get a Car Loan

Avoid the "Danger Zone!" Following the auto budget basics keeps you from getting deeper in debt. If you have already mastered the art of controlling your spending and are paying off past debts, you are improving your credit history and score. This will make it much easier to get affordable financing for a car in the future, or even right now. It all depends on how long you have been diligent to your budget and credit repair goals.

Use some of that extra money to pay the tax, license and registration fees. By paying those up front, you avoid paying interest on those additional charges.

You will have a better idea about what you can afford for your car outside of the monthly payment. When you budget, you generally keep track of how much you spend for your fuel and insurance. Basically, you know what you can afford for a loan payment quickly without doing too much guesswork.

Trust Me, It Pays Off

If anyone ever told you that budgeting doesn't pay off, they're doing it wrong. It's amazing how much you can organize your finances simply by listing and tracking where your money goes. It's never too late to start.

Now, we know that getting on the right path takes time. We also know there are times when you simply don't have that luxury and need help now. Auto Credit Express can help you achieve your goals and get back on the road today.