When it comes to buying a car, you will realize the experience isn’t as simple as picking the favorite flavor of your ice cream. Northcash offers financial advice and lending services to clients looking to finance their next car purchase. Most car owners who had to deal with auto loans will testify that purchasing a new car comes with a lot of financial decisions, which might even discourage you from getting the car. The process gets complicated even after you have picked your preferred car and now have to handle the purchase. Just like any other long-term investments, a car can affect your financial security in the long term.
This does not mean when buying a car you have to handle it like a guessing game. Instead, we offer some valuable tips that can help you deal with a hefty auto loan. These five crucial pointers will guide you in making the best decisions when dealing with a massive car loan.
- Consider trading your old car
Some car owners never sell their old cars when buying new ones. In case you are dealing with a hefty car loan for your new car, you can refinance the loan by selling your old car. Make sure that the old vehicle fetches as much money as possible. You can even consider servicing and repairing it so that it’s in excellent condition. You can consider trading the car the same place where you had bought your last new car. The other advantage is that if you have a vintage model, then you can even make more money than expected from the vehicle. Vintage vehicles sell best to the collectors or manufacturing companies. Do some research on the best places, where selling your old car will get you the maximum amount of cash. But be prepared, since selling a car on your own isn’t as easy as many might assume it to be.
- Making timely payments of the auto loan
The oldest trick in the book when it comes to dealing with any credit is making timely payments of the monthly or yearly payment installments. Always make sure that you make your payments on time so that you do not accrue extra charges or even have your car seized by the creditor. Have a record, which helps you track the amount you have been paying, the duration paid, and the remaining amount to be paid. At the same time, this habit will improve your credit score with your lender.
- Consider Refinancing the auto loan
If you can qualify for a more flexible credit like an online loan, then you can apply for one and then use it to refinance the auto loan. This will reduce the amount of auto loan you owe the creditor. There are many available installment loans that a person with good credit score can apply for and use them to refinance their existing auto loan. Most of these online loans do not require any collateral.
- Consider adjusting the loan period
You might want to decrease the loan period. Longer loan periods, even though they attract lower monthly charges, they can be tiresome. In case you have received a salary increase, you can consult with your creditor on whether it’s possible to adjust the loan period and use the extra income to increase your monthly installments. This can only be achieved if you can pay higher monthly payments and hence clear your auto loan much faster.
- Making use of unexpected sources of cash
There will be instances when you will get unexpected cash as a bonus at work, inheritance, lottery, etc. The best thing to do with such amounts is to use them to clear your auto loan. The good thing about such money sources is that they are unpredictable, so planning for the money is impossible. Using it to pay off a loan will help you in the end without affecting your bank account; on the contrary, it will boost your credit score and assist you in clearing off the loan.