Americans take out millions of dollars in auto loans each year. Because these loans are so popular, they also tend to be the subject many widespread financial myths. At Sioux Falls FCU, we hear these myths all the time from our members, and we decided that it’s time to set the record straight.
Read on as we debunk some of our most overheard auto loan myths.
Securing a low monthly payment for your vehicle can certainly be a sigh of relief when looking to buy a car, but it’s important to consider the implications that come along with that low monthly payment. If your payment is low, then it will take you longer to pay off the loan. This ends up costing you more in the long run, as the loan accumulates interest the longer it goes unpaid. Depending on your situation, you might consider this to be a fair tradeoff for a low monthly payment, but know that there are other factors to consider when finalizing your purchase.
Qualifying for an auto loan and being able to afford the payments on that loan are two entirely separate things. Qualifying for a loan simply means that the lending institution is willing to lend you the money and says nothing of your ability to repay the loan. Before you buy a car, it’s important to look at all of your financial information to determine whether or not you can afford to own the vehicle—taking into account the other expenses associated with purchasing a vehicle.
A car is a big financial decision, and there’s more that goes into making those decisions than whether or not you can make the monthly payments. In addition to the cost of the vehicle itself, buyers should consider the cost of upkeep for that particular model of car, the fuel efficiency and whether it’s truly the right fit for their needs. Once you’ve weighed the pros and cons, you’ll be ready to make the decision.
While having a perfect credit score is generally a good idea when it comes to securing loans, having a rough credit history is not necessarily a deal breaker when it comes to auto loans—especially if you can limit the risk of the lender with a larger down payment. Worried about being able to secure a loan? At Sioux Falls FCU, you can get pre-approved for your auto loan so you don’t have to worry about approval on the day of the purchase.
Purchasing a car can be stressful, but the process doesn’t have to be difficult. At Sioux Falls FCU, we pride ourselves on making the auto loan process as easy as possible for our members so we can get you behind the wheel and on the road. Stop into a branch or visit our Auto Loans page and see for yourself just how simple it is.