How to Reduce the Cost of Bad Credit Auto Loans in Hickory Hills, IL

Bad Credit Auto Loans Hickory Hills IL

If you are in the position whereby you need to look for a bad credit auto loan in Hickory Hills, IL, you may be preparing yourself for extremely high rates of interest and prohibitively expensive monthly repayments. While that might be the case for the less informed, you are no longer in that group. Use the simple yet effective methods on this page to ensure that your bad credit auto loan in Hickory Hills doesn’t end up costing you silly amounts of money.

 

Understand the Cost of Credit

 

When people applying for bad credit auto loans in Hickory Hills, IL look at the cost of the loan, they all too often focus solely on the monthly repayments. While monthly repayments are extremely important in understanding how much your loan will cost you on a month to month basis, the overall cost of the loan can be greatly affected by the length of the loan. Calculating the overall cost is simply a case of multiplying the cost of repayments by the number of repayments required. Let’s consider an example.

 

You borrow $5,000 at a rate of 15% over 4 years. The monthly repayments are around $137. However, if you choose to repay that loan over 7 years, the monthly repayments are only around $94. Many buyers would be sorely tempted to extend the term of the loan to reduce the repayments. However, if you do not consider the cost of credit of the loan, that is how much over the $5,000 you will pay back, you won’t realise how much that actually costs you. In the above example, over 4 years you will pay back $1,565 over your original loan amount. For a 7 year term, that cost jumps up to a whopping $2,884!

 

Know to consider the cost of credit and you won’t fall into the trap that so many borrowers looking for bad credit auto loans in Hickory Hills don’t know to be conscious of.

 

Focus on the Finance, Not on the Vehicle

 

The most important element in securing an affordable bad credit auto loan in Hickory Hills, IL is not finding the perfect car and then trying to secure the loan, but finding the perfect loan and then choosing the car! All too often, Hickory Hills, IL residents spend all their time trying to find the perfect car and don’t spend nearly as much attention on ensuring they get the best bad credit auto loan rate that they can. If you fall in love with a car before you have secured a suitable finance deal, you run the risk of accepting terms that are outside of your budget just to get the car, and that’s a sure fire way of paying more than you have to.

 

Start with the finance. Approach your Hickory Hills’ lender and sort out your loan before you consider any cars. That way, your budget is set and you know exactly what kind of cars you can afford. This will give you far greater peace of mind in the long run, as well as ensure that costs stay low.

 

Know Your Credit Score

 

Lastly, but possibly most importantly, make sure you know your credit score! When applying for a bad car auto loan in Hickory Hills, you should make sure that you know all there is to know about your credit score before you approach a dealership offering finance or a local lending institution. By doing your research, you can present yourself as an informed consumer that knows exactly where they stand and what they are entitled to.

 

To get a full breakdown of your credit rating, you can avail of the services of www.annualcreditreport.com . This will provide you with details of the credit information held by Experian, Equifax and TransUnion on you. Not only does this provide you detailed information on your credit rating, but it also allows you to challenge any unfair or incorrect errors that appear on your record. Successfully challenging an error on your report that is reducing your credit score can have a big impact on reducing your future loan costs from any Hickory Hills’ lender.

 

By following these steps, you can make sure that your bad credit auto loan in Hickory Hills, IL doesn’t cost you any more than it has to.

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