Used Car loans create long term problems for young adults without A+ credit
If you show up at a dealer to buy a car (as 70% of people do) most of the great financing deals disappear when you have a credit score under 700. Since used cars are typically millennials' first car, the financing of private sale auto loans can be even more limited and expensive. Often you are left with the car you wanted and a long-term loan you did not want with loan payments between 60 and 84 months.
Rates increase quickly as your score decreases. The super low rates under 4% increase to over 8% as your credit score decreases into the 680 to 580 range. Trading in a high rate loan may be able to cut both the rate and the interest you pay dramatically. This could help if you already have improved your credit and have another purchase in mind… maybe buying that first home. If you think you are stuck - think again.
We know that in the confusion of dealer financing the payment becomes central and the rate secondary. But don’t keep paying 40% more on your car loan for depreciating asset. Finex specializes in helping work out of these situations by offering the opportunity to cut interest rates and lower payments by refinancing your auto loan. The real key is stabilizing and improving your credit score over time.
So if you have been working to get your credit back on track this is a good time to talk to us because we are now offering to cut auto loan rates over 4% (see newsletter article). We can show you how your score has trended over the past year and compare payments / rates to see If you will benefit by refinancing with us. Credit scores do not go up by refinancing, but the long-term benefits of lower rates and payments are obvious to those on the credit improvement trail.
Michael Palladino
President/CEO
