How to Reduce Your Monthly Auto Loan Payment - Better Times Financial

How to Reduce Your Monthly Auto Loan Payment

How to Reduce Your Monthly Auto Loan Payment

Reduce Your Auto Loan Payment of Prepaid Cards You do not have to undergo a credit check before purchasing prepaid credit cards. This is an advantage if your credit score is relatively low and/or if you have been denied credit on a recent application. Prepaid MasterCard or Visa cards are accepted wherever MasterCard or Visa credit cards are accepted, so you can use your prepaid cards to book flights, pay in restaurants, and shop online. Whenever you use your preloaded card, you should also benefit from the purchase insurance offered by MasterCard or Visa. This means that the card issuer will protect you against theft or damage to items bought using your card for a certain period after purchase. Since you cannot spend more than you have on your card, prepaid credit cards can help you to manage your money effectively and avoid getting into debt. If you are trying to keep to a monthly spending budget, loading this amount onto the card can help you to stay within your budget. Some prepaid card issuers offer their customers certain rewards, such as discounts or cashback on purchases. This can be advantageous if, for example, you regularly shop at the store that issued the card. A prepaid card can be used instead of a traditional checking account because it is possible to have all your salary paid onto your prepaid card. The fees for some prepaid cards may be lower than those charged by banks for some checking accounts. Also, prepaid cards are available to everyone, so you can purchase one even if your application for a checking account has been refused. Disadvantages of Prepaid Cards Perhaps the main disadvantage of a prepaid card is that it does not enable you to improve your credit score by building a good credit history. Since it is not a credit card, how you use your card will not be reported to the credit bureaus. This means that it will not affect your credit score positively or negatively. Another potential disadvantage is that prepaid cards usually carry a range of different charges. These may include monthly service fees, reloading charges, and cash withdrawal fees. As soon as you incur each fee, it will be deducted from your balance. Prepaid cards are as convenient to use as credit cards, and you may also be rewarded for using them. They are available to everyone and can help you to keep to a monthly spending budget. However, prepaid cards cannot enable you to improve your credit score, and the fees they carry can be relatively high.

Whether you are in the market to buy a new set of wheels or you are interested in refinancing your existing vehicle, you may have your eye focused on one key figure. The monthly payment associated with your auto loan is your regular financial obligation related to your loan. Many car owners and car buyers are most concerned with finding a car loan with a manageable monthly payment rather than other factors like the term of their auto loan. So what steps can you take today to reduce your monthly auto loan payment?

Review Your Credit Rating

Before you start shopping for a new or used car loan, you may consider pulling a free credit report from the three credit reporting agencies. You are entitled to receive one free credit report per year from each of these three bureaus. Lenders will use your credit rating to determine your interest rate. However, not all of the information on a credit report may be accurate. By reviewing your credit rating today, you can ensure that all information on the report is accurate. If you find any false or incorrect information, you can take measures to correct that information before applying for your new loan. This step can help to ensure you qualify for the best auto loan interest rate possible.

Shop For Interest Rates

Car loan interest rates can vary from lender to lender. Take time to shop around to find the best interest rate possible. Shopping online for auto loan rates is a fast, convenient way to identify which lenders will provide you with the best rate possible.

Extend Your Loan Term

If your goal is to keep your monthly loan payment as low as possible, you may consider extending your loan term. It is common to find a loan term as long as 72 months on a new car loan. The term offered on used car loans may be limited to 48 months by most lenders. A longer loan term will yield lower monthly payments. However, you should keep in mind that this will affect how quickly you can pay off your loan.

Further, opting for a longer loan term may result in higher total loan costs. This is because you will be paying interest charges on your loan for a more extended period. If your main concern is finding a monthly payment that is manageable for your budget, these downsides may be factors that you may be willing to live with.

Lower Your Loan Amount

Lowering your monthly payment can also be accomplished by lowering your auto loan amount.

But, how is this accomplished?

To lower your loan amount on the purchase of a new or used car, you can put more money into the purchase as a down payment. You can also consider buying a more affordable car with a lower sales price. If you are refinancing your car loan, you can consider paying off a portion of the balance owed with a lump sum payment.

Your auto loan payment will be a regular fixture in your monthly budget for several years. 

With this in mind, it does make sense to take steps to lower your monthly payment. Consider putting these tips into practice today to lower your auto loan payment.

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1 Comment

  • Betty Reynolds says:

    I was interested in getting our 2003 Mercury Mountaineer refinanced. Our pay off at this time is 3707.00. We have full coverage from State Farm insurance.

 
 
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