Managing your money can be hard, and it's especially hard when expenses fluctuate. For example, if you like to buy lots of presents in the winter or take long vacations in the summer, you have to manage your finances to make that possible. Hi, my name is Molly. As a small business owner and the mom of a busy family, I've had to figure out how to manage a lot of financial ups and downs over the years, and in my opinion, advance preparation and organization are key. If you want tips for managing your personal or business finances, you have come to the right place. I hope that these posts help and inspire you.
Do you need to secure financing for your next vehicle purchase? If so, you likely have some questions before you get the loan that you're looking for. Here is what you need to know before you agree to get an auto loan.
Is There a Pre-Payment Penalty?
You'll always want to know if there is a pre-payment penalty associated with your auto loan. Since auto loans are for a short period of time, it's possible that the lender wants to ensure that they'll make back enough in interest to make it worth the work of giving you a loan. This is why a pre-payment penalty may be part of your loan. Make sure that you understand what happens if you get a sudden windfall and want to pay off the loan in full before it's due to save on interest.
How Is Your Credit Score Being Pulled?
It is always worth asking what credit bureau is being used to pull your credit score during the approval process. That is because there are three different credit bureaus, and you want to make sure that the one the lender is using is not showing the lowest score of the three. This is because lenders use risk-based financing to determine your interest rate, and you'll end up paying more money if your credit report indicates that you may not pay the loan back.
You'll want to pull your own credit reports before applying for a loan. This will allow you to know what your credit score is and which credit bureau shows you in the best light. Then you can make sure that a lender considers the credit bureau that gives you the best score when they determine your interest rate.
What Loan Term Provides The Most Savings Over Time?
There are many different ways that you can get an auto loan, with the terms of the loan having a very wide range. You may be offered financing for as little as 24 months or as long as 72 months, depending on what the lender is comfortable with.
It's always worth asking about which loan term will provide you with the most savings over time. An interest rate can be misleading, because a lower interest rate over a longer period of time could end up costing you more than a higher interest rate over a shorter period of time. Find out what the total cost of each loan term is so that you can compare what you'll be paying in the end.
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