Anyone going car shopping? Don’t be alarmed when you see a higher interest rate with good or even excellent credit. Auto Loan rates are ridiculous but that doesn’t mean you can’t save on your interest.
When purchasing a car always multiply your monthly payment by the number of months in your contract then subtract it from the cost of the car. The remainder is the amount you are paying in interest to borrow that money! ($539 x 84 months - cost of the car =interest you are paying to borrow that money.) If you are unhappy. Don't take the loan.
But let’s say you need this car because life is “lifing”. Here are a few tips to help you save on interest over the term of your loan unless you decide to refinance.
1. Split your car payment into two payments. Add an extra 12.5% per payment. Every four months you’ll pay an additional car payment but it will all be applied to the principal, saving you months on your term.
2. Make lump sum principal direct payments. This will also save you money on interest over time.
3. Keep the interest rate as is, make all payments early! Refinance in 6-12 months. *Be sure you buy a car that holds value. The more depreciation, the tougher the refinance.
Be sure to follow me Raine Rose (FB) @IAMRAINEROSE (IG)
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