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Generally speaking, any high APR consumer debts that allow early payment of principal should be done so as long as you can afford it. This includes car loans, unsecured signature loans, credit card balances etc. If you have a bad credit car loan, the rates are very high so you should make early principal payments whenever you have the spare cash. This means that the amount you owe is reduced, so lesser interest will accrue for the rest of the loan term. You can see how fast you can pay off your car loan using a free car loan calculator.

Make sure you have built a sufficiently big cash buffer for at least 6 months of expenses before you use any spare cash for early principal payments. It is more important to avoid late payments which can add more fees and damage your credit. The best way to avoid getting cash tight is to have sufficient savings. With a good credit score, you can even try to refinance your car loan for even more APR discounts.

For a start, try to pay an extra $100 on top of your usual monthly payment. Note that some lenders do not allow early payments on car loan principal, so you still have to pay the extra interest. Some may charge a prepayment penalty if you want to pay off the loan in one lump sum, which usually happens when doing a refinance.

Posted May 25th, 2012. Filed under Auto Loans

Auto Loans For People With No Job

How bad is your credit? Is your lack of good credit restricting you from access to cheap auto loans? While having less than perfect credit means you won’t qualify for the best car financing deals, there are still car loan options for car buyers even if you are unemployed, bankrupt and need to finance a car purchase. Read on to understand how you can buy a car with no credit or bad credit with financing schemes for people like you. For first time car buyers, it is important to understand what it means by an auto loan with bad credit or no credit. This could be a result from poor payment history like exceeding card limits, skipping payments or being made a bankrupt in the past.

I Am A College Student And I Need A Student Auto Loan

If you are a student or newly graduate looking to buy a car with a student auto loan or under 21 car insurance, loans under this category are simply termed as – student car loans. The prefix takes the assumption that a college student is someone with no credit history, since they have yet to start working, nor have a credit card etc. Things that give them the chance to build credit history.

Where Can I Get A Car Loan With Bad Credit

If you have bad credit you may find it difficult to obtain a car loan through a bank or traditional finance company, never mind cheap vehicle leasing. Most banks are only willing to give low rate auto loans to people with a stellar credit report. According to research done recently, only one out of ten auto loan applicants with FICO scores of 620 and below qualified through a car bank loan. And there are many who are equally rejected through credit union car loans and auto manufacturers’ finance companies. In such unfavorable climate, a car-buyer should consider an auto dealer or service that specializes in helping people with bad credit to finance a car. It will save you valuable time and reduce inquiries into your credit history, saving you the embarrassment and distress from rejections, as these auto loan lenders are adept at working with people in different kind of situations.

When you need to purchase a car or truck with bad credit, there are lenders and car dealers who can offer a variety of loan terms and payment schedules. You may start off by searching on the internet for online car financing for easy auto loans, compare auto loan quotes, and negotiate the best car loan rates. Be careful of auto leasing lenders that claim to offer low rate financing to first-time car buyers with bad credit. Enjoying low interest is unlikely and when you buy a car on hire purchase through a car dealer’s in-house finance firm, you are required to make a big down payment, along with a high loan APR.

Finance A Car With $1000 Down Instead

The risk with high interest car loans is if you decide to sell the car before finish paying up the full loan, the amount you receive from the sale may be far less than the amount you need to settle the auto loan. You will also bear the financial loss from depreciation. Instead of looking for that BMW car finance, it may be better for you to settle for a bread and butter type of car, preferably a cheap used car from a buy-here-pay-here car dealer.

Besides, if the new car is repossessed or to be scraped because of an accident, you may be obligated to pay a considerable amount to repay the loan if your car insurance is not adequately covered. If your budget is tight, have bad credit where it is not easy to avail low interest car loans or cheap car insurance, you may want to consider saving up first or settle for a cheap used car under $1000.

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Posted July 27th, 2011. Filed under Auto Loans Unemployment

Get A Car With No Down Payment, Between Jobs

“What are the options if I need to buy a car when I have bad credit? Can I find the cheapest auto loan and pay with a low interest hire purchase?” – When buying a new car, you have two choices: pay for the full cost or hire purchase car installment plan. However, not many of us can afford to buy a car by paying it in full.

How To Buy A Second Hand Car By Paying Installments

Naturally if you are looking for car financing for unemployed, the total cost of the car will be considerably higher. By paying through monthly installments on a second hand car, you are incurring the cost of credit, which includes interest and other types of fees dictated by used car dealers. You also need to consider how much money you have for down payment, the monthly repayment, length of the auto loan, and annual percentage rate (APR).

Keep in mind that when buying a used car with bad credit, auto dealers or private party car loan lenders tend to charge higher interest and length of the loan is usually shorter on used cars than on new ones. It is not unusual for “buy here pay here” dealers to charge 20% interest rates. When shopping for the car financing, use this information to compare whether you are getting a cheap car deal.

Can You Get Hire Purchase If You Are Unemployed

Once termed as mom-and-pop car lots loans, buy-here-pay-here car dealers are more likely to finance car buyers with bad credit and no job. However, because of the high APRs they charge and unscrupulous dealers amidst the industry, some ill-informed people are quick to label them as buy here pay here scams. When you make your purchase through these car lots dealers, you will be asked to make weekly or biweekly payments to stay current, unlike the usual monthly installments. For fear of customers’ defaulting on their auto loans, some dealers will even align payment due dates with customers’ paydays, somewhat similar to how a payday loan operates. Yet many buy here pay here car dealers do highlight good payment histories to credit bureaus. So if you can prove to be a good paymaster, using an affordable car loan will help to repair bad credit, making it easier for you in the future to avail loans on better terms.

Buying Used Vehicle With No Or Bad Credit

Granted, when you need to buy or lease a car with bad credit, it’s naive to think you can get low rate interest on hire purchase. More often that not, the auto lease contract will come with strict re-payment options and you will have to put a larger size down payment. Therefore, when considering a vehicle loan financing, ascertain your credit score and decide if you would be better off saving up for a car first instead of trying to find car financing with bad credit.

Posted July 24th, 2011. Filed under Auto Loans Unemployment