When it comes to the length of your loan, you have plenty of options. You can get a 12 month loan all the way up to a 60 month loan. The exact loan length you choose is up to you. Each option has pros and cons. Let me go through a few of them here.

12-24 Months

With a short loan your payments will be very high. Can you afford these high payments? Use a car loan calculator to input some sample numbers. Vary the length of the loan and see how the payments change when you later the loan length. If you opt for a short loan, keep in mind that while you think you can afford the payments now, you’ll need to be able to continue making those payments for the entire length of the loan as well.

36 Months

A 36 month loan (3 years) is the middle option. This option is preferred by many because the payments are not as high as with a short one or two year loan. Yet at the same time you are not tying your credit up for five years. Another benefit of the 36 month auto loan is that if you find that the payments are easy and you have extra money, you can pay extra and get your loan paid off quicker.

60 Months

The 60 month option is often times not chosen, but rather forced upon the borrower. To those with low incomes or less than stellar credit, this could be their only option. The 60 month car loan has the lowest monthly payment, yet it has the highest interest rates. While you may think you’re getting a good deal since your payments are low, you won’t feel that way years later when you’re still making payments. It’s also not a good feeling to know that you paid an extra thousand dollars (or more) just in interest payments.

With interest rates still at record lows, it is a great time to refinance your auto loan. If you got your car loan several years ago you most likely can get a much better rate now. Refinancing your loan entails paying off your current loan and starting a new loan with a new lender. Your payments will go down due to the lower interest rate and also because you are also extending the length of the loan. Here are some things to take note of if you’re interested in refinancing.

Credit Score

If you got your original car loan when you had a less than stellar credit score you most likely did not get a good rate. If your score has improved since then (and if you’ve been making timely payments then it should have) then it is probably a good idea to refinance your auto loan since you qualify for better rates now.

Interest Rates

Currently interest rates are at historic lows. This translates into big savings. Over the life of the loan you can save about $825 (2% interest rate change, 60 months, $15,000 loan). But you can only take advantage of these low rates if you pay off your current loan and get a new loan at a lower rate.

Loan Length

If your original loan term was 36 months and you are now halfway through, you owe much less than you did when you first started. Yet your payment is still the same. If you are having a hard time making your payments, it is best to take a proactive approach and try to refinance your loan as soon as possible before you begin to miss payments. By refinancing your auto loan you are starting over again, but your payments will be manageable now. Plus if your finances return back to normal you can make extra payments and pay off your auto loan sooner if you’d like to.

If you have decided to purchase a new car and will be financing it, you want to make sure you are getting the best deal possible. This doesn’t mean just the best deal on the car itself, but the best interest rates as well. So you may be tempted to shop around from dealership to dealership to get the best rates. However, you have also heard that multiple credit inquiries hurt your credit score. In this post I’m going to dispel some rumors and discuss whether or not shopping for a better interest rate hurts your credit.

When your credit is checked by a credit card company who wants to offer you a credit card, it’s called a soft inquiry. These do not affect your credit. But when your credit is checked at a car dealership this is referred to as a hard inquiry and does affect your credit.

If you are just applying at one car dealership and are approved, don’t worry about that credit check. However, be careful if you want to go loan shopping from place to place. If you keep getting these hard inquiries done on your report over the course of several weeks, expect your credit score to drop.

By getting these excessive inquiry lookups, it appears to the banks like you are being declined and are desperate to get financing. The danger of having too many credit inquiries is that your score may drop so much that when you finally decide to get a car loan you may no longer qualify.

So what can you do? Only get your credit checked when you are ready to buy a car. Don’t do it if you just want to see what type of rates you can get. If you are ready and don’t like the rates you were offered, you do not have to agree to them. You can go somewhere else to get a different quote. When you do this within a matter of days, it is treated as one inquiry, rather than multiple. Something else to keep in mind is that if you’ve gone to several places and cannot seem to get the rate you want, it’s just not going to happen.

Ideally you’ll want to buy a car with cash rather than getting an auto loan. But college is expensive and students rarely have enough money in the bank to do that. But there’s nothing wrong with borrowing money to buy a car, especially if you really need one to get to and from work or school. Here are some ways that college students can afford to buy (or get a loan) on a car.

Good Credit

In order to qualify for an auto loan you’re going to need average to good credit. You can establish a history of good credit by using a credit card responsibly. This includes making your payments on time and not using up all of your available credit.

Down Payment

Car dealerships don’t like selling a car when the buyer has not put any money down. The bigger the down payment you put in the lower your loan is going to be. When you put in a good down payment you’re going to get a lower interest rate. So save up your money in a savings account and don’t go to a dealership until you have at least 20% to put down.

Co-Signer

If you don’t have good credit you’re going to need to convince a friend or relative of yours to co-sign the loan for you. When a loan has a cosigner, the credit of that person is used, rather than your own bad credit. Make sure and pay back the car loan on time because if you don’t, you may have just ruined a good relationship.

Buy Used

New cars are very expensive and overpriced. The moment you drive a new car out of the lot it has already lost a few thousand dollars in value. All cars lose value over the course of time, but new cars lose a lot of their value in the first couple of years. So choose to buy a used car in good condition while you’re in college.

Save Money

College is expensive but if you want to buy a car you’re going to have to save money and decrease your expenses. You can save on rent by having a few roommates. You can save on gas by living on campus or within walking distance. To save on text books you can choose to rent your biology, chemistry or history textbooks rather than purchasing new copies.

An auto loan allows you to purchase a car over time without having to completely pay for the purchase initially. There’s several advantages to obtaining a car loan. An auto loan will allow you to purchase a more expensive vehicle than you could afford without such a loan. An auto loan can also help to build your credit rating. Additionally, unlike leasing, at the end of the auto loan you will own the vehicle outright. Let’s take a look at some more of the benefits of getting a car loan.

Owning vs. Leasing

When you purchase a vehicle using an auto loan, you will typically make a down payment and monthly payments for the term of the loan. At the conclusion of the loan, you will own the vehicle outright. Leasing, on the other hand, is a form of renting a vehicle. With a lease, you will still make monthly payments. However, at the conclusion of the lease, you can either choose to buy the vehicle for a predetermined lump sum or return the vehicle to the dealer. As a form of renting, leased vehicles also commonly limit the amount of miles you can drive during the duration of the lease.

Credit Rating

Purchasing a vehicle using an auto loan can help to build your credit. Always make your car payments on time and do not agree to a car loan you cannot afford. An auto loan is a type of installment loan. This means that you pay a specified amount every month and the loan terminates at the end of the specified term. Unlike a revolving loan, an installment loan does not feature a credit limit. A credit card is the most common example of a revolving line of credit. Credit bureaus generally consider an auto loan a favorable line of credit and paying the loan back over time will, therefore, typically improve your credit score.

Affordability

When you initiate an auto loan, you will usually have to make a down payment. The specific amount of this down payment will depend on the loan. Various lenders offer several auto loan options that require varying down payment amounts. Because an auto loan allows you to finance the vehicle over time, these loans allow you to purchase a more expensive vehicle than you could purchase if paying by cash. The auto loan’s monthly payment depends on the down payment made, the purchase price of the vehicle and the term of the loan.

Many lenders now offer auto loans with terms longer than six years. These longer-term loans generally reduce the monthly payment required for the duration of the loan. However, you should exercise caution when agreeing to long-term car loans, as the loan will normally exceed the vehicle’s warranty period. Also, look for auto loans that do not require you to pay a prepayment penalty should you choose to pay off the loan prior to the contracted term. Do your research at moneysupermarket.com, which offers many attractive auto loan options for your vehicle purchase.

Unbelievably, sometimes it may be easier to get a loan for a car when you have bad credit rather than not having credit at all. This is why it is imperative that you use your credit wisely as early as you can. For young people, they can be added to their parents credit card or they can get their own cell phone. Just something that establishes that they are responsible at making monthly payments on time.

However for many young people getting a car is the first time they’ve really needed to use their credit. But there’s no need to worry, there are still ways to get a car loan without having first established a long credit history. Here is how it can be done.

Trade-In

If you have an older car you can sell/give to the dealer they can use that to reduce the amount you owe on your new car. When you’re trying to get a car with no credit, you need the smallest loan possible and trading in your current car helps you lower the amount of your loan.

Down Payment

By making a nicely sized down payment (more than 25% of the car’s value) you are reducing the total of your loan. But making a down payment doesn’t just lower the amount you owe, it also shows the bank that you have a lot to lose if you default on this loan. It shows you have invested a substantial amount of money and would do anything within your power to make sure you get this loan paid off. This is called the loan to value ratio.

Co-Signer

Using a co-signer with good credit is a surefire way of getting your auto loan application approved. All the co-signer needs to do is show up and sign on the dotted line. By doing so, they are agreeing to be held financially responsible should you ever default on the car loan. You are essentially using their credit to get yourself a car. Consider yourself lucky if someone is willing to be a cosigner for you. Be careful though because if you miss payments you will be ruining both their credit and your relationship.

In closing, if you can do all or most of these things you can walk away from the dealership with your very own car, even if you have never used your credit before.

Planning to get financing help by applying for a loan? For most people, it sounds to be a very stressful experience to apply for a mortgage loan. We will have to take many things into consideration while applying for any type of mortgage loans. Plus, there will be a lot of money to be spent in the process. However, we can still find some quick and money-saving tips when getting a loan – using loan calculator.

Loan calculator is a very powerful and useful device used by the lenders, borrowers and realtors. People use loan calculator to determine the accurate amount of the mortgage loan payments and interest rates by inserting the different variables electronically and professionally. By using a loan calculator, we can decide the accurate monthly payments, interest rates, insurance policy, taxes and other essentials for the mortgage.

By using loan calculators, the applicants can clearly know about the specific details and all the payments for their loans. Loan calculator helps the borrowers to budget and prepare for the future in a better way. It makes it easy for us to spend the earnings and save money more efficiently. Loan calculators benefit in the following ways:

• Loan calculator proves to be very professional and efficient in use. It can work out the monthly payments in a few seconds and compare the products of different lenders within only several minutes. All the data and information it offers is absolutely accurate and precise, which allows us to save a lot of energy, time and money.

• For some loan calculators, after we insert the monthly payments we want to defray, they will deduct and find out the exact type of loan from some famous and credible lenders. To get a favorable result, we need to insert the appropriate number of monthly payments in the process. Basically, the monthly payments should cover no more than 30% of our monthly income.

• All the loan calculators allow us to calculate the loan payments in details and help us save a lot of money for the mortgage. As we know, the loan brokers are always unhappy to offer professional ideas to save our costs. Sometimes they even help us make a decision without taking our monthly salaries into consideration. Therefore, it is possible for us to calculate all the related statistics by ourselves with the help of online loan calculators. In this way we can know clearly about the interest rates, monthly payments and other things for the loan.

• Another significant advantage of loan calculators is that it is easy to access. All the loan calculators are free online and open to all the individuals who need help. There are a great number of free online loan calculators available for everybody on the internet. But we have to be very careful while choosing the best online loan calculators. It is an acknowledged fact that quality loan calculators are always free online. So, if some web sites ask us to pay any extra fees for calculating, they may be unreliable corporations.

Find extensive and valuable information on loans, loan calculators and personal finance at Loans-Advisor.com.

When purchasing a car on credit you need to make timely payments each month or else you risk losing your car in a vehicle repossession. That’s why it’s important to only take on a loan you are sure you can afford. It’s also a good idea to have savings just in case you run into temporary financial issues. You should do everything within your power to make sure you don’t default on your auto loan. Nobody likes getting their car taken away. But the loss of your vehicle isn’t the last of your problems. Here are several consequences of a repossession.

Loss Of Vehicle

When you fall behind on your payments your vehicle may be repossessed. This is the single most damaging consequence of missing payments. Your car is not just a shiny toy. It is a tool you use to drive to work, to visit family, to go to the doctor and to drop off your kids at school. If your car is taken from you and you manage to get current on your account you may get your car back, but expect to pay hefty additional fees.

Loss Of Funds

If you’ve been paying let’s say $400 a month and are 25 months into a 60 month loan and then you stop paying, your car will be taken from you. This means you’ve paid $10,000 thus far (principal and interest combined). What do you think happens to all of that money? You guessed it, they keep it, you lose it. So not only do they get your car, but they get all the funds you’ve been paying for all these months (or years).

Credit Score

Expect a car repossession to wreak havoc on your credit score. The moment you miss your first payment, expect a significant drop. Then once you’ve defaulted and the car is taken, you can expect a devastating result. When you have a vehicle repossession on your credit report it is extremely difficult to get another car loan in the future. It will take years of timely payments to repair your credit score.

Debt

Let’s say you were laid off and did not have the money to pay for your car. You barely had enough to cover rent. So you miss your car payments and your credit score is hurt. Then your vehicle is repossessed. Now you’ve hit rock bottom. Not so fast. It can get even worse. Let’s say you owe bought a $20,000 shiny new truck. You made payments on it and you now owe $15,000. Then you default on the loan and they take your truck away. Afterward, it is sold at auction to the high bidder for just $10,000. The bank has lost $5,000 on the transaction. You still owe that money. The amount you owe will be reported on your credit report and if need be, they will sue you in court for the balance.

The current economy has created a buyer’s market for most purchases, including home and auto sales. Dealer incentives have made purchasing a new or a used car quite affordable. If you’re in the market for a used car, you can find even better bargains by buying from a private seller. Many car owners might be looking to sell their cars to downsize their monthly budgets or to raise cash. However, some deals might seem too good to be true because they are. Since warranties and other safeguards are not available when you buy from a private seller, there are several steps you have to take to ensure that the car you are purchasing is worth the sale price. Here are some tips:

Research the Value

There are several ways to determine if the asking price of the car is a fair reflection of its value. Tools such as the Kelly Blue Book or Edmunds.com can give you the average market value of a car based on its year, make, model, and condition. Check the value of the car you are interested in through several of these tools to get a good starting point for negotiations.

Do a Visual Inspection

There are several signs to look for that can tell you if there has been a problem with the car. Check the tread of the tires for signs of wear; look for rust and other signs of deterioration in the body; and look under the car for signs of leaking fluid. Other signs to watch for include new paint to indicate repairs after an accident, water lines on the body or interior to indicate flooding, matching VIN numbers on the dash and the door jambs to ensure the car is not stolen, and any other signs of damage such as dents, dings, and scratches.

Take a Test Drive

Driving a car can answer more questions about its condition and the personal fit than anything else that the owner says about it. Driving it can quickly tell you if there are any obvious mechanical problems. A test drive can also tell you if the car is a good fit for your personal style — whether you like the way it drives, if it handles well, and if it’s comfortable for you.

Get an Independent Inspection

Before you commit to buy, be sure to have the car checked by an independent mechanic. You can either bring the mechanic with you, or ask the seller to allow you to have the car checked before you commit to the sale. If any problems are found with the car, get a written report with estimates for repairs. This can help you to negotiate a lower price on the car, if you are still interested in buying it.

Check State Records

The car’s vehicle identification number (VIN) can be checked against state records for information about the car’s history. For example, you may be able to determine the sale history, estimates of mileage, accident reports, and problems with state inspections or emissions. You can also check the Carfax.com report for the car with the VIN for information about whether the car has been in an accident.

Before you commit to buy a car from a private seller, you should be very thorough in your inspection of the car and in the questions you ask the buyer. Find out why the car is being sold, and be sure to ask about a history of accidents, repairs, or other problems. Independent inspections and a test drive can help you to discover any other information not disclosed by the seller. Following these simple steps can help you to find a good bargain on a used car while also ensuring that the quality is worth the price.

Amanda Tradwick is a grant researcher and writer for CollegeGrants.org. She has a Bachelor’s degrees from the University of Delaware, and has recently finished research on grants for women and federal college grants.

One of the ways consumers can save money while still enjoying the convenience and benefits of credit cards is by transferring high-interest rate balances to low or zero-percent cards offered through the mail or online. With promotional balance transfer credit card periods now lasting as long as 21 months, simple mathematics will show that the balance transfer fee that accompanies most of these offers is a spit in the bucket in comparison to the amount of money that can be saved over that period of no interest borrowing.

For many consumers, making a balance transfer has no effect on their credit score, but for those who are struggling to increase or maintain an average credit rating the move may have negative consequences, according to some analysts. There are two potential areas that may be a problem for people with less than stellar credit:

Percentage of Debt

The percentage of your available credit that you are using is one thing to consider. Problems arise when you transfer a balance to an existing account instead of to a new one, resulting in a high debt percentage. For instance, if you have a $6,000 balance on a card with a $10,000 limit then you have a debt percentage of 60%. If you transfer that balance to a card with a limit of only $8,000, then your debt percentage has suddenly jumped up to 75%. This jump in debt percentage will negatively impact your credit score. As a general rule, transfer balances to a credit card with a limit equal to or higher than the one of the card you are transferring.

Credit Inquiries

If you apply for a new card, hoping to transfer a balance, the card company will automatically request to see your credit report, also known as an inquiry. Too many inquires may be a sign of a consumer in trouble. So wisely choose the offers you want to apply for and allow a length of time to pass before making another transfer.

Credit card balance transfers will either be a positive or negative effect on your score, depending on how you manage the situation. Transfer to a lower or no-interest credit card, pay it off before the promotional rate expires and enjoy a debt-free life and a boost in your score. With your debt eliminated, you’ll open up the opportunities for higher credit limits or bigger loans.

Noreen Ruth writes for ASAP’s credit card blog and several popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content to educate consumers about the best credit card offers, debt settlement help, loans and other finance related topics.