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IS THERE ANYTHING IN YOUR CREDIT REPORT
THAT WOULD HARM YOUR CHANCES
OF GETTING
AN AUTO LOAN?
CREDIT SCORES are used by employers
increasingly in their hiring decisions. Many jobs in today's
new economy require security clearances in addition to the now
normal background investigations, em- ployers, in light of
September 11th, 2001 attacks, now consider your personal credit
report and score as part of their process.
If you think there may be a problem, visit
the Institute of Consumer Financial Education's web site at:
www.icfe.info
The ICFE is a wonderful resource for
consumers of all ages to learn more about spending, saving and the
wise use of credit.
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Shopping For Credit
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Auto Loans - Recreational Vehicle
RV Loans |
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A used car buyer may know how to find the best models and how to
reach a fair price, yet not know how to buy a car on credit. A
buyer who walks into a dealership with insufficient information is
likely to accept dealer financing and pay top dollar for it. Savvy
buyers need to
comparison shop for money just as they do for the car itself.
Before going to a dealership or used car lot, buyers should know
the range of interest rates from various sources and answers to
these questions:
How much will I need to borrow?
What is the maximum monthly payment I can afford?
How many months do I want to borrow the money for?
Important Financial Terms
Finance managers at the various used car sources are experts in
selling money to prospective buyers. By law, the cost of credit is
expressed as an annual percentage rate (APR) and the buyer can
compare the cost of loans by comparing annual percentage rates.
The APR is the standard way of talking about interest rates. The
federal Truth In Lending Act
requires creditors to clearly disclose all the required cost terms
in writing.
The contract must include the APR, the amount financed, the
finance charge, the total of
payments and the payment schedule. Also required is the total
sales price, which is the sum of the total scheduled payments and
the down payment. The finance charge is the total cost of the loan
including interest, fees and credit checks. The credit contract
shows the buyer how much more it costs to buy on credit than to
pay cash.
When you obtain an automobile loan the car becomes collateral,
which means that the creditor will hold the title to the car until
the loan is paid in full. So if you fail to make your
payments, then legally the creditor can repossess the car and sell
it.
Copyright © 1997, National Institute for Consumer Education,
Eastern Michigan University. Any person is hereby authorized to
view, copy, print and distribute this mini-lesson for information
and education purposes
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