Obtaining a Michigan Car LoanMay 14
A new car, or new to you car, is a major purchase for anyone. Yet, for someone with bad credit, this purchase takes on even more significance. Your credit score will affect how much you pay for this vehicle and those with less than perfect credit will often pay a much higher rate than those with good credit. This difference in interest rate on Michigan car loans can be 15 percentage points or more. Yet, there are still ways you can purchase a new used car and still be able to afford the monthly payments. It just takes some work on your part.
Bad credit and no credit loans are available even if you have run into problems in the past or have never gotten any credit. The problem with this is that someone who has bad credit can obtain a loan with a 24% interest rate while someone with good credit will only pay 7% for a used car. If the car is new, then the good credit interest rate can be as low as 5.5% while the bad credit or no credit interest rate rises to almost 18%. This can make a huge difference in how much your monthly payments are.
You can still obtain a Michigan auto loan though. It will be best to get a cosigner if at all possible. Also, you should try to save as much as you can for a down payment before shopping as this can help lower your monthly car payments. Finally, keep the term length as short as possible so you don’t pay more interest than necessary. All of these will help to reduce your interest rate and allow you to get the best car possible.
Not all debt is bad; the way in which you manage your credit is what is important. Credit scores range from 300 to 900 with a majority of people falling into the 600 to 800 range. You will find that people with a credit score of 720 or higher receive the best loans, yet don’t despair. You can still obtain a Michigan auto loan. It will just cost you more in the long run.
14 May 2010 | 7:14 am | Automotive
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