OK I need to finance a car or van , I just got discharged from my Bankruptcy , I’am on Unemployment .I have $500.00 as a down payment , Iam looking for a vehicle price between $3000.00 and $4000.00.
On the “loan calculators” with 25% interest and depending on the vehicle price ($3000-$4000) . All the calculations come to under $100.00 a month , then add insurance for say $60.00.
What and where on the contract should I look for options with paying the car off , that are best for me.
I want to be able to pay the $100.00 a month payment as stated above , then when I find a job , I want to pay it off quicker.I do not want the extra payments I send in to just go towards the interest.
Or say if I continue to pay $100.00 a month , then just save extra cash to do a payoff.What would I have to ask and/or lookout for on the contract.Say if I have the payoff money , then could they say like I owe more because of the interest?
Can someone break it down for me in laymans terms , so I do not get ripped off.I’am trying to rebuild my credit not go back into debt.
And I NEED to get a car in order to get a job , all the jobs that I’am qualified for are in the suburbs.And I need a car to get out there.
Thanks
No, if you pay that car off early then you save interest on it. It is calculated on a daily basis. So the sooner you pay it off the better off you are! Get it paid and save that amount that they are charging you to punish you for bankruptcy and that is what they do!
Now you will not get a refund because you are paying it off because all is calculated in the payments, but you do save a ton when you pay it off because the calculations are monthly so the sooner, more money for you and your credit looks better as well. In other words you save having to pay all the interest that is with the total loan amount.
So pay it as soon as you can.
First of all, make sure that you read somewhere on the contract that there is NO PENALTY FOR EARLY PAYOFF. Don’t just take the salesman’s word for it…..he has no say-so over the bank’s financing decisions. After you buy the car and you want to start making higher payments than what you’re obligated to, the amount that you paid above and beyond the $100 should be applied automatically towards the car’s principal amount. It never hurts to actually write on the monthly statement “Payment=$100
Additional Principal=(whatever)
Some statements will already have a blank on them that you can fill out with the additional amount you’re paying, but not always. Keep a close eye on your statement and make sure the balance is going down in accordance to what you are paying. It probably wouldn’t be wise to continue with the payments and just wait to pay it off as soon as you have the entire balance in your savings account because, in the meantime, you will have spent hundreds on finance charges. If, on the other hand, you went this route anyway, when you have an adequate amount in your savings account, you should call the finance company and ask for the pay-off amount. They should deduct the remaining interest charges and just tell you the amount needed to pay off the principal. But, like I said, for each month you’re putting money into your savings account, you’re still being charged an interest fee. Commit to the lowest monthly payment you can (in case you have a bad month and cant pay anything extra), but when you have a good month, send in as much as you comfortably can towards getting the balance paid off. Also, just FYI: credit bureaus consider loans under 2 years old to be “new” loans and are, therefore, not helpful in establishing or rebuilding credit. They want to see a credit HISTORY, and that history needs to be about 2 years. Taking out a loan one day and repaying it a few months later does not show an adequate history. It will still make it on your credit report and will look favorable to anyone who actually takes the time to look, but it wont effect your overall FICO score. Your plan is a great way to get a car without having to pay a ton of interest, but it isnt going to do anything towards rebuilding your credit.