Car Finance

7 Useful Tips When Financing a Used Car

If you are going to finance a used car, you will need all of the tips you can get to make the process easier. Many people who do this don’t think twice and breeze through it, only to have regrets later on. You definitely want to make a point of taking your time so that you can get the best possible deal. This is a big financial commitment to make, so you don’t want to go into it without considering every angle first.

  1. Evaluate Your Credit

Whether you think your credit is great or terrible, you’ll want to get copies of your reports to look through. This will give you a better idea as to what you can expect in terms of rates and chances of approval. If your score is very low, you’ll want to consider improving it before applying for financing. Everyone should make a point of checking their reports once every year for mistakes anyway. If you happen to discover any errors on any of your reports, you need to inform the appropriate credit bureau right away.

  • Borrow from a Private Lender

Obtaining a loan for a used car from a bank can be far more difficult than you might think. The fact is that banks have pretty high standards for approval these days. You will most likely need to have at least an average credit score. Private lenders, on the other hand, have much lower requirements for approval. You will need to make enough to pay back your loan on time, but you don’t absolutely need good credit. If your score is very low, this is definitely an option to consider.

  •  Shop Around for the Best Deal

One of the most important things that you can do when trying to obtain financing for a used car is to shop around. If you want to get the best possible interest rate on your loan, you’ll have to compare quotes from numerous lenders. This shouldn’t take a lot of time, and it can benefit you tremendously. Paying too high of a rate on your loan means spending more than you really have to.

  • Don’t Opt for a Longer Term Than Necessary

You will have some lenders offering you very long terms for your loan, but you should keep your payback period short. Drawing out the term means paying more interest, which is never a good thing. You obviously want to have enough time to pay back the loan in its entirety, but you shouldn’t go over. This will ultimately help you to save quite a bit of money.

  • Make a Decent Size Down Payment

The amount of money you put down on your car when financing will play a major role in determining your rate. This is why you should try to make as big of a down payment as possible. It might be a good idea to save up for a while longer if you don’t have much to put down at the moment. This is something that you will be very glad you did in the end.

  • Consider a Co-Signer

Young people who are trying to obtain financing for a used car should consider using a co-signer. This instantly boosts your chances of being approved, and it could also lower your rate. If you don’t currently have much of a credit history (or you have bad credit), it’s a good option to explore. This is basically when you have a friend or family member sign onto your loan with the understanding that they’ll take care of it if you cannot pay. It is a pretty big responsibility, and you will need to find someone with at least decent credit.

  • Read All of the Loan Terms

Before you finalize the loan for your car, you will need to take the time to read through all of the terms in full. This contract is legally binding, so you don’t want to simply skim through it. You should have a complete understanding of everything from the due date to all of the fees. Make sure that you ask the lender if you have a question of any kind.

There are many options when it comes to financing a used car, but you don’t want to choose just any of them. Private lenders have a lot to offer for those who need to buy a car but have bad credit or no credit whatsoever. Take the time to look into your lender options so you can choose the best one possible. The company or institution that you borrow from will make a big difference. You don’t want to go blind into this sort of situation, because you will only end up with regrets later on.

Credit Scoring

Improving Your Credit: 7 Tips That Can Really Help

A solid credit score can take you far in life, so it only makes sense to do everything you can to boost it. There are lots of ways that you can accomplish this, but some methods are more effective than others. It is important that you make a concerted effort to improve and maintain your credit over the long term. This can open up job opportunities, allow you to live in nicer flats, and increase your chances of getting approved for loans. This article will help you get a better credit rating in no time.

Take Out a Loan

One of the absolute best ways to improve one’s credit is to take out a loan. If you pay back the money you borrow on time, you’ll likely notice a significant increase in your overall score. Before you decide to do this, make sure that you decide on an amount. You should try to avoid borrowing more than what you need. You also want to look at your budget to confirm that you can afford to take out a loan in the first place. Private online based lenders offer a lot of great deals for borrowers these days. Take some time to explore these options before you make a decision.

Pay Off What You Owe

You should also be proactive with paying off any outstanding debt you might currently have. This too can help you out a lot with boosting your credit score in a very noticeable way. It is particularly important to pay off credit card debt, because it only compounds with interest. This is definitely not the kind of thing that you want to simply ignore. The longer you put off paying back the money you owe, the worse your financial situation will be.

Take a Look at Your Credit Reports

By taking the time to look at your credit reports, you will be able to see if there are any errors that need to be dealt with. Sometimes credit bureaus make mistakes, and it is ultimately up to you to spot them. Getting certain errors on your reports corrected can help to improve your credit quite a bit. This is why it is so important that you to take a look at your reports at least once every year. You might just be surprised at what you end up finding.

Stay on Top of Your Regular Bills

Another great way to maintain solid credit is to be punctual when it comes to paying your recurring bills. This includes things like your rent or mortgage, utilities, internet, car payment, insurance policies, and anything else. Making late payments will have a negative impact on your credit. While one late payment might not ruin your credit, it can be a very slippery slope. This is why you should take it seriously. You should pay all the bills you can online, as it makes doing this easier and more convenient. Set up automatic payment as well so you don’t forget to pay any of your bills.

Maintain a Low Balance on Your Credit Cards

Keep a close eye on the balance of your credit cards at all times. You don’t want your balance to get too high, as it could cause problems for your finances as a whole. It is also not good for your credit and can damage your score quite a bit. You also need to make a point of keeping your credit utilization ratio at a good level. This means that it shouldn’t be very low or very high, but right in the middle. It’s also crucial that you avoid closing any credit cards that you no longer used. While it might seem pretty harmless, it can actually have a negative effect on your credit.

Avoid Applying for Credit too Often

Submitting lots of applications for loans or credit cards within a short span of time can harm your credit in a big way. Instead you’ll want to be careful about applying in the first place so you don’t have to keep doing this. If you get turned down for a new line or form of credit, wait at least a few weeks before applying again.

If you happen to find any errors on your credit report, you’ll want to make the credit bureau aware right away. The sooner you get it taken care of, the sooner you will be able to start building your credit back up. While it can take a while for some people to repair their credit, it is well worth all of the effort. Once your score starts going up, you will have a lot more options in terms of loans, places to live and so much more. The fact is that your credit has a big impact on your life as a whole.