Why Car Financing Might be Right for You

There are many reasons that people choose to buy their cars through car financing. Whether you need to finance the purchase of your car because you don’t have enough cash to buy it outright, or whether you have a strategic financial plan that only allows you to spend a certain amount of money each month towards your car, there are some very sound reasons for doing car financing. Here are some of the reasons that you may want to consider car financing:

It Helps You Keep Your Savings

Whether you have a hefty savings account or are just trying to pay off your current bills with whatever left-over money you have each month, buying a car with car financing can help you preserve whatever nest egg you may have (or hope to have). By using a car financing option, you’ll pay small monthly payments towards the purchase of your car, eliminating the need to pay one huge bill at once, which may deplete your savings altogether.

After all, everyone should strive to have a little safety net savings to tide them over in the event of an emergency. Buying a car should never come before having that safety net.

You May Earn More Money by Keeping Your Money

Even if you have a huge sum of money that you can put towards the purchase of your car, it may be wise to only take a portion of that money to use as a down payment and keep the rest in a high interest savings account. The high interest savings account, such as a CD, will help you earn a predictable amount of interest on the principle amount of money that you have.

The trick to earning money through interest is to ensure that the savings account that you find has a higher interest rate than the loan interest rate amount that you will be pay for the purchasing of the car.

Even if there is a one point difference, you will come out ahead if you are able to keep your money in the high interest savings account and get financing for the car purchase.

There are many ways to save money in the long run through car financing. Our dealers and car financing experts are happy to help you find methods to improve your savings and get behind the wheel of a car that you can afford for the long-term. Contact us today for more information about how we can help you with your car financing.

How Credit Impacts Car Financing

Credit is one of the important factors that go into getting the best car financing. Many of our car loan customers are aware of the importance of credit and their credit scores, but they are not too certain of what credit exactly is or how it affects them. Here’s a brief overview of credit scores and how they may impact your car financing:

Credit scores are made up of five different categories. Each category carries its own weight and amounts to a different percentage of your overall credit score. Here’s what you need to know about these categories:

Length of credit history – this category amounts to 15 percent of your entire credit score. The length of your credit history is generally determined by the first account that you opened, such as the first credit card or bank account. It’s best to keep long-standing accounts. Therefore, be sure that you do not simply jump from one credit card to another or one bank account to another.

Payment history – your payment history will amount to 35 percent of your credit score – making it the most important aspect of your credit score. When going for car financing, it’s important to be able to show that you have a history of making payments on time. Therefore, if you have a bad credit score, try focusing on repairing this aspect of your credit score to get a boost. Also, taking out a car loan that you repay can help to repair this aspect.

Types of credit used – a credit card is a different type of credit than a mortgage. This category of your credit score amounts to ten percent of the entire score. To boost this section, limit the number of credit cards and general consumer credit you have and shoot for more long-term, asset building credit lines, such as a car loan or mortgage.

Amounts owed – the amount of money that you owe accounts for 30 percent of your credit score. This category is based on a combination of percentages that you owe on credit limits as well as raw money that you owe. Of course, try to limit the amount of money that you owe on consumer credit lines, such as credit cards.

New credit – this category makes up 10 percent of your credit score. New credit may be a concern for lenders because new credit may be something that you’re still adjusting to. Therefore, try to limit the amount of new credit you have when applying for a car loan in order to get the best rates. At Loan Doctor, the best place to get car loans in Canada, we look forward to helping you get a great car loan or to improving your credit so that you can qualify for lower interest rates and higher loan amounts. Contact us today for more details or to get started!

4 Easy Ways to Improve Your Credit

When it comes to improving bad credit scores, it’s important to understand that improving your credit requires commitment and that may take several months or years to actually improve your credit in a meaningful and long-lasting way. However, by getting started with the process of improving your credit today, you’ll be setting yourself up to have a better financial situation for years down the road. Remember: most meaningful actions take time to see to fruition – and improving your credit is no different!

Here are 4 important steps you can take today to start improving your credit for the long-term:

Take out a Car loan

Even if you have to take out a high interest rate loan, take out a loan and commit to repaying it. One of the best ways to improve your credit is to get started developing a track record of financial responsibility, which means repaying loans and other debts on time and in full. However, in order to repay those debts, you have to actually take one out!

Minimize debts

If you’re like many people, you probably have several different credit cards and loans at any different time. You probably also have a balance on these debts. In order to increase your credit score, it’s important that you minimize the amount of money that you owe to lenders. Therefore, make a plan to repay these debts as soon as possible. For many people, fully repaying these debts may take several years. However, by starting today, you can turn your financial situation around in a way that will last for years to come.

Review your credit report

A startling number of people have false information on their credit reports that negatively impact their credit scores and credit history. Therefore, it is recommended that you review your credit score on an annual basis in order to ensure that all of the items on your credit score are accurate and true. Contact us for more information about how to review your credit report.

Acquire assets

If you have assets that you own, you will be improving your overall wealth and financial situation. An asset is any larger item with value, such as a home loan or car loan. By acquiring these assets, you will be able to improve your financial situation. Contact us today for more information about how buying a car can help to improve your credit score.

3 Tips to Repair Your Credit – Starting With Getting a Bad Credit Car Loan

Having bad credit is nothing to be ashamed of. We have many customers each day that approach us for car loans, but are embarrassed by their credit situations. They also believe that because they have bad credit, they will not be able to get a good car loan that they can actually afford. We want all of our customers to know, first, that we are here to help them get the best cars and the best car loans for their needs. Therefore, we will not pass judgment on them because they have bad credit. In fact, if our customers have bad credit, they are still able to get great cars at amazing car loan rates.

However, by taking some small steps to repair their credit, our customers will be able to position themselves to get a better car loan rate years down the road. We can recommend some simple changes today that will help each of our customers set themselves up for lower interest rates and higher loan amounts years down the road. Here are a few tips for our customers that can help them repair their credit:

Get that car loan

Go ahead! Even if you have to take out a bad credit car loan, you will not only be able to drive away in a car, but you will actually be rebuilding your credit. Whenever you take out a bad credit car loan, you will be setting yourself up to get a good credit car loan down the road. Why? Because as long as you repay that bad credit car loan, you’ll be showing future lenders that you have a history of being financial stable and of being responsible enough to repay your car loans. Future lenders will like that!

Stay put

If you have been changing your address or job frequently, we know that this may not be your fault. However, it will still reflect negatively on your credit. Therefore, stay put as much as you can. This means keeping the same mailing address and, if possible, keeping the same job.

Minimize debts

It’s important that you keep your debts as streamlined as possible. This means that you minimize the number of debts that you have. Close old credit card accounts that you no longer use. If possible, transfer your credit card balances to one card as well. Lenders want to see that you have as few financial commitments to other lenders as possible so that they will know that your financial commitment to them will take priority.

Facts About Car Loans

If you’re in the market for a new car, you may be considering your financing options. In today’s economy, many people do not pay for cars with cash. Instead, people may look to obtain car loans through financing and pay the loan back in monthly installments.

While you’re crunching numbers, it may be helpful to review the following facts about obtaining financing for a vehicle. The more you know, the better prepared you’ll be to get the best financing for your quality used car.

Credit Scores Are Important

It’s important to remember that your credit score can provide a general financial profile. Various questions may be answered by reviewing a credit report. Have you paid your past debts back in a timely manner? Do you have a high debt-to-income ratio? How long have you been working on establishing your credit?

Your credit score can also make a difference in the interest rate you’re given and the amount of money you’re allowed to borrow. If you have low debt compared to the pay you bring home, you may qualify for a higher car loan. If your debt-to-income ratio is high, you may be awarded less money in a loan.

Shorter Terms Can Offer Better Interest Rates

Sometimes, a shorter-term loan can offer you better interest rates. A lower interest rate is often worth pursuing, as it can save you money in the long run. If it’s possible, look to obtain a loan for payback in three years instead of five. When pursuing a short-term auto loan, though, it’s important to be sure you can afford the monthly payment.

When purchasing a car today, many people are choosing to finance their car loan instead of paying in cash. Knowing the importance of your credit score and choosing a short-term loan are tools for getting the best loan possible.