Buying a Car While in Debt — 3 Factors to Consider
The total household debt in the US hit a record $13.21 trillion last year. The average citizen owes around $100,000 for various essentials, such as a mortgage, car loans, and student finance. However, Americans continue to spend at an astounding rate, which means the national debt rate isn’t coming down any time soon.
While it might not be the smartest idea to buy big things such as cars and houses while in debt, in some cases, it’s a necessity. For example, for people with families, buying a car is essential.
One of the primary barriers that get in the way when applying for a car loan is your credit history. If you’re up to your eyeballs in debt and have a bad credit score, securing finance for your new car will be tough and costly in the long term.
Here are some tips that will help you get an auto loan with lower interest rates and easy payment terms:
Consider a Second-Hand Car
New cars are typically more expensive than used cars, so loans for new cars obviously come with more extensive terms.
So consider getting a used car instead. You’ll save a lot of money on your auto loan, and also on the price tag of the car.
Research shows that the original price of a car is almost halved after the first three years. This means you can get a used car in good condition at almost 50% of the cost of a brand new one!
Do Your Research
Another good strategy to save some money on your auto loan is to do your homework. Determine your budget, including how much you can expect to pay back in a specific amount of time.
This will create a clear picture of your finances and will help you make the right decision.
Also, find dealerships that are known for offering good deals and avoid sleazy opportunists who are just looking to exploit your situation.
Fix Your Credit Score Before Going Car Shopping
A bad credit score means you’ll have to pay a higher interest rate and might be stuck with added conditions on your auto loan. Cleaning up your credit score and history before applying for loans will portray you as a reliable customer.
You can hire trustworthy credit repair companies to help you dispute any credit report errors, pay off past-due accounts, and add positive information that will boost your credit score.
Leave It To Us!
Do you wish to apply for an auto loan at reasonable interest rates? At Oak Credit Repair, our credit experts can guide you regarding quick credit repair so you can get favorable interest rates.
We also offer free Credit Improvement Plans to clients in Michigan as well as all over the US.
Sign up without delay for a limited first-come-first-serve free credit consultation and boost your credit score in no time!