Sorry guys. You just seem to be the most intelligent people out there, so I figured I'd asked you again. I'm 18 years old. I built up my credit, and currently have a credit score of about 720. I'm looking for a new car, well a New Used car. I found a nice one for around $7100. I need to take out a loan. How would I go about doing this, and how much would I have to pay a month?
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Loans and whatnot.
- Thread starter DownSetDana
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Dont ever take out a loan on a car. Save up pay cash. I havent had a car loan in yeeeeeaars. I'll ride a bike before I have a car payment. Cars go down in value, and.. well. I am almost positive that you won't follow my advice, and I'm probably wasting my breath - but check out daveramsey.com and read his book/subscribe to his podcast.
Car payment is a good way to throw your money away, and i'm sure the 20 posts below me will tell you im wrong, but.. well, I have money, and they are likely broke
^^ I understand your intention here, but I don't think the OP asked for advice on whether or not to get a loan, but how to go about it.
OP: Do you have a savings or checking account with a local bank? I'd check with them to see what their loan rate is for your situation. That way you'll know how much car you can afford. Whatever you do, don't get financing from a dealership, since they'll likely give you a terrible rate.
OP: Do you have a savings or checking account with a local bank? I'd check with them to see what their loan rate is for your situation. That way you'll know how much car you can afford. Whatever you do, don't get financing from a dealership, since they'll likely give you a terrible rate.
doctorteeth is right though, esp. when it comes to a used car. I'd finance a new car but I would never do it for a used one.
Some good general credit advice would be to keep that credit score high by paying cash for a used car (probably less than $7100) instead of trying to make payments on a 7k used car (not to mention the insurance).
Some good general credit advice would be to keep that credit score high by paying cash for a used car (probably less than $7100) instead of trying to make payments on a 7k used car (not to mention the insurance).
Borrowing money for a car depends whether or not you plan on keeping it for a long time or a short time. Over a long period of time a car loan can be a benefit. This is because you can buy a newer car than you could paying cash, hence, the car theoretically should last longer with less maintenance costs. This theory can also be reversed.
Never I mean never buy more car than you need. If the car will never or only once a year leave the city buy a small or medium sized car (small car if it is only ever you in the car, medium car if it is for a family, friends don't count ). If you travel regularly out of the city buy a medium sized car or a large car.
To the OP. You are only 18. Do you need a seven thousand dollar car? Do you plan on keeping the car for more than 5 years? Is it only for show that you a 7k car? Never go in to dept for fashion or to impress people.
Just to scare you read this.
Never I mean never buy more car than you need. If the car will never or only once a year leave the city buy a small or medium sized car (small car if it is only ever you in the car, medium car if it is for a family, friends don't count
). If you travel regularly out of the city buy a medium sized car or a large car. To the OP. You are only 18. Do you need a seven thousand dollar car? Do you plan on keeping the car for more than 5 years? Is it only for show that you a 7k car? Never go in to dept for fashion or to impress people.
Just to scare you read this.
Buy a cheaper car for cash. Then go see an investment adviser and tell them you want a 10 year plan to grow some wealth.
Don't pay interest, interest is something the bank pay you to borrow your money not something you pay the bank to borrow theirs.
The only time it's ok to borrow money is to for investment, where you intend to earn a better return than the cost of borrowing money.
Don't pay interest, interest is something the bank pay you to borrow your money not something you pay the bank to borrow theirs.
The only time it's ok to borrow money is to for investment, where you intend to earn a better return than the cost of borrowing money.
Car loans are easy. I've always found the best rates to be at credit unions. You should have no problem opening an account at a local credit union. Then tell them you want a car loan. They will send you to one of their loan officers and take it from there. It's very easy.
Yep, very good advice.
Try and save up as much as possible towards the car because you really don't want to be paying too much interest - it's money down the drain for an "assest" that constantly depreciates.
Not sure of your personal situation, but if you can secure the loan against property (possibly your house or your parent's house if you don't have one) then do it because you will usually get a lower interest rate as the loan is less of a risk to the financial institution that way.
Good luck!
Are you going to college? Its not fun to have a car payment while in school. you also need to look at how long you plan to take a loan out for.
You don't want to have a 5 year loan on a used car. I did this stupidly bought a used car wanted a low payment financed for 5 years, ended up trading it in for a new truck and had to pay 3k out of pocket to make up the amount on the loan vs. how much the vehicle was worth.
But as they said a credit union does offer great rates if you belong to one. If not shop around.
You don't want to have a 5 year loan on a used car. I did this stupidly bought a used car wanted a low payment financed for 5 years, ended up trading it in for a new truck and had to pay 3k out of pocket to make up the amount on the loan vs. how much the vehicle was worth.
But as they said a credit union does offer great rates if you belong to one. If not shop around.
working for a bank, i would suggest saving as much as you can, and borrowing as little as you can. Shop around for the best deal that you possibly can. Loans that are secured are genearlly cheaper, but if you have nothing to secure against, your out of luck.
Just out of interest,(pun intended), whats your credit limit on a credit card, because you can often get '0% for 12month' deals on a credit card (well you can here in UK), and switch the balance around. You'd have to pay a small fee for each switch, but thats a lot less than paying full interest. If you can borrow $5000 on a credit card, even if you have to switch that 10 times at a 3% transfer fee, its not going to cost you as much as a loan.
Just as a note, im from UK, so your credit system may be slightly different than ours...
Just out of interest,(pun intended), whats your credit limit on a credit card, because you can often get '0% for 12month' deals on a credit card (well you can here in UK), and switch the balance around. You'd have to pay a small fee for each switch, but thats a lot less than paying full interest. If you can borrow $5000 on a credit card, even if you have to switch that 10 times at a 3% transfer fee, its not going to cost you as much as a loan.
Just as a note, im from UK, so your credit system may be slightly different than ours...