Car Loan Bad Credit History and What It Cost You
Car loan bad credit history, so you have bad credit and you have a history of it. You may still get a car loan but you will be paying hire rates, you may be required to put a larger down payment on the car, you might even have to get a cosigner. It does depend how bad your credit is. There are levels and there are even levels within sub prime (bad credit). The longer you have had a history bad credit getting a car loan could be a challenge.
There are a few things you should do to find a car loan bad credit:
1. Find a dealer or a lender who specializes in car loan bad credit history
2. Take steps to improve your credit
The first one is easy. You can apply for a car loan bad credit history right now. Bad Credit Car Financing deals with car dealers and lenders who specialize in bad credit car loans.
The steps you can take to improve your credit history can be found on this page. I wanted to take a few minutes to go over how much more you are paying by having bad credit history.
How much is that car loan bad credit history costing you?
A Car loan bad credit history might cost you an car interest rate of say 12%. If you had excellent credit you might be able to negotiate a car interest rate of say 4%.
If you take a loan at 3 years at 4% and you borrow $10,000 the interst you will pay $628.28 (the interest is calculated on a compound rate). It sounds like a lot of money doesn’t it. Now let’s take a look at the car loan bad credit history rate.
You will probably go out for 5 years at 12% and you borrow $10,000.00 the interest you pay will be $3346.00 YIKES! That is a difference of $2717.72. If you have bad credit and you feel like you can not get ahead, you feel like you are being kicked, looks like the rich keep getting richer. You are absolutely right. Your bad credit history is doing the kicking.
The difference in monthly payments for the two loans are:
4% the monthly payment is $295.23
12% the monthly payment is $222.44
So what if you took the 4% and went out to 60 months (5 years) ( you can get better rates if you go with a shorter loan period. The longer you go out the more your interest rate will be)
4% for 60 months $184.16 The total amount of interest paid on this $1104.96 That is still a difference of $2241.04 more for the same car.
Now if you were offered a $4000.00 rebate on the same car you would be better to take the 12% interest rate and not take a 4% interest rate with no rebate. You must take all into consideration but the above example was to show how much car loan bad credit history is costing you.
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