Need a used car loan, bad credit. What NOT to do? Part 3

Need a used car loan, bad credit. What NOT to do? Nobody plans to be in this situation but unfortunately we all can without realizing it find ourselves needing something others might not feel we can handle. The sad part is that it might be true. Too many people end with sad stories of bankruptcy and broken lives simply because they did not plan their finances correctly. One of the characteristics of our capitalistic societies (I kind of assume you’re not reading this from Cuba, and if you are I’m going to make the wild guess banks and lending companies ar en’t going to get rich on you) is that we want it all, and yesterday. This way of thinking is dangerous and counterproductive. That is why our number one advice in all parts of this articles series of “Need a used car loan, bad credit. What not to do?” our first piece of wisdom has always been, can you afford it. And will you be able to afford it if things go wrong with your work or other monthly expenses. Will the interest rates changing cripple your family economy? These sobering questions don’t seem to belong on a site that is promoting loans, but the truth is that nobody wins when borrowers don’t pay.
So let’s assume you have taken our collective sigh of self analysis and have decided that you need and can afford this new car loan. You have educated yourself, chosen a bank, read up on the current interest rates of other companies, your tenure is not too long and your monthly payments are as high as you can afford factoring in a possible change in interest rates. The final trap we will discuss is the usury some banks and lending companies carry out when they charge “hidden costs” like loan management fee, or transaction commissions that are hidden in the fine print only to be noticed when the balance sheet comes in the post.

It is reasonable to pay a fee for the paperwork and administrative work involved in operating a lending company. However this fee is already (partially at least) included in the interest rate. And if it isn’t, make sure it is competitive with other treatments and procedures.
So you need a used car loan but you have bad credit. What not to do? Don’t get the loan if you can’t afford it. It is better to walk or catch a bus than have your credit destroyed by numerous bankruptcies and suspicious borrowing habits. If you decide after much consideration you can afford the loan, go for the lowest possible interest rate for the shortest possible time. This might cause our loan to increase in cost but the overall quality and affordability of the community. Finally check for high set up fees. Be smart, plan well, be prepared for your new used car.