Auto loans…for when the 87 Civic just won’t cut it.

www.getcreditapps.com 

So you need a new car.  Your’s broke down, needs a ton of maintenance, is getting too old and unsafe, or you just want something cool, either way you may need an auto loan to purchase that perfect car for you.

When should you get an auto loan?

Auto loans are used in several different situations. 

• The new saftey and technology of buying newer car
• Your current car is ready to fall apart and its time for something else
• Your payments are higher than you can afford and you need to get into a cheap car
• Refinancing a current vehicle to lower payments, shorten the term, or lower your interest rate.

It makes since that when you can’t afford to outright buy a new car, and you NEED a new one to take out an auto loan.  What you may not know is that it makes even more since to try and get a lower interest rate on your current vehicle.  This is called refinancing your car; you replace your current loan with a new loan from a different bank.  It is not nearly as common as the home mortgage refinance, but can save thousands of dollars over the life of the loan.  The rates for auto loans have plunged recently and people are getting lower rates than were previously possible.  I know this from personal experience, because a month ago I refinanced my current car, knocking a full year off of the term and keeping my payments the same.  I was very happy with the results.

In a perfect world, we would all pay cash for our cars, but in this world, auto loans are a great way to buy cars.  They offer relatively low interests rates as long as you have established a good credit history (you have been paying your bills on time, right?), provide a monthly payment that doesn’t change, and are typically simple interest with no early payment penalties.  If the loan does have early payment penalties, it should be avoided, because you can refinance or pay off the loan early without incurring additional fees. 

Get All 3 FICO Scores and Credit Reports!

Next to credit cards, auto loans provide great ways to build credit history.  And as opposed to credit cards they offer the same payment every month, which is great for the budget-minded individuals.  Although people with no credit history or bad credit history may have a hard time getting an auto loan on their own, a co-signer with good credit is a great way to help build up or build back up your credit.  Being a co-signer for someone else is a completely different post, but in short, I don’t normally reccommend it unless they are very closly related (in the same household). 

Auto loans are a great tool for getting the car of your dreams, just remember that if you can not afford the payments, your credit history will be negatively affected and the car will be repossed.  A repossesion in your credit file will HAUNT you for years.  Be safe with auto loans and they will help your credit tremendously; it is worth I promise.

My reason for getting an auto loan:

My Dodge Neon SRT-4 with a Mopar Stage 3R turbo upgrade.  It is fun and fast (350hp).  Cars are my passion, finance is my profession, wrap them together and you get…..an auto loan?

Stay safe and have fun!

 Once again, thank you for visiting my website.  If you have any questions feel free to email me at marcusmarc@gmail.com

Thanks!

~ Marcus

www.getcreditapps.com 

What are credit cards good for?

Credit cards serve many great purposes.  The obvious is that they allow you to borrow in the short-term to buy goods and services that you may not immediatly be able to afford.  They can be used to pay faster than cash, and many of them offer rewards for frequent or high volume users.  These rewards can be in the form of almost anything, from money, to plane tickets, to gifts and car rentals. 

Credit cards are THE EASIEST way to build a solid foundation of good credit.  I have personally built up my credit score from the age of 16 using credit cards that my Brother co-signed on.  I have since had several credit cards which have all helped me establish a great credit history.  It was easy for me because I didnt have a huge temptation to buy things that I couldn’t afford, although for others it can be harder.  In order to use credit cards as an effective credit-building tool you MUST be able to control your spending so that you can afford to pay off the credit card off completely each month, or at least be able to make the minumum monthly payment. 

Get All 3 FICO Scores and Credit Reports!

While credit cards to make for an easy way to build up credit, they also make for a very fast decline in your credit score if not payed on time each and every month.I have known dozens of people, most of them college students, who have gotten in trouble with credit cards at an early age.  They get on spending sprees that lead them to maxed out credit cards, and huge minimum payments that they can’t afford.  In the end, they end up with a very high defaulted interest rate, usually around 30%, thousands of dollars of principle and fees, and a horrible credit score.  As I have talked about in previous posts, recovering from a bad credit score costs a lot of money and can be a huge strain on the credit card users life.  It is best to avoid this if at all possible.

 Although credit cards do have their drawbacks in the form of the temptation to spend more money, they are very beneficial in building credit when payed on time each month, and can provide a good solution for those “emergencies” in life when money needs to be quickly accessed.

 Once again, thank you for visiting my new website, and if you have any questions feel free to email me at marcusmarc@gmail.com.

Thanks,

Marcus

www.getcreditapps.com 

Why should you apply for credit? 

Well the short answer to this question is:  Credit will allow you to buy the things you want to buy, when you want to buy them.

The longer answer to this question is very complex.  Having established a good credit history allows you to do more things and save much more money than having no credit history or a credit history full of late payments and repossesions. Throughout our lives our credit report is checked by many different types of organizations, not just those that are going to extend credit to you; insurance agencies check credit to determine your premium payment.  If you have bad credit, you will have higher insurance.  If you want to get an apartment or rent a house, it is very hard to do with no credit or bad credit.   Cellular providers, utility companies, all of these companies typically do credit checks to determine if they want your buisness, or if they need to get deposits  for their services.   

A good credit history will always save you money when you borrow in the future by allowing you to get a lower interest rate and better terms than otherwise possible.  Instead of that 24.9% interest that a person with a 600 FICO score gets, your 750 score may get you a rate closer to 10.9%.  That is a huge difference when you figure that with $10,000 balance @ 24.9%, you pay $2490 a year in interest and @ 10%, you only pay $1000 a year.  The interest alone breaks down to a savings of over $124 a month!!  The lower interest rate gives you lower payments, and make it much easier to pay down the principle quicker. 

Get All 3 FICO Scores and Credit Reports!

It is easy to see why a good credit score is important; credit can be a huge headache if you get behind on your payments.  It takes a long time and a lot of money to build back your credit if this happens to you.  The best way to avoid this is ALWAYS make sure you make payments on time, and do not buy things that you can’t afford.  If the payment is outside of your means, find a way to pay it NOW, because later it will be much harder to recover.

Thank You for viewing my new website, if you have any questions feel free to email me:  marcusmarc@gmail.com

 ~ Marcus