Qualifying for a zero-down car deal likely means having good credit and qualifying income. However, if you’re a bad credit borrower, you’d be hard-pressed to qualify for an auto loan without a down payment. Besides – down payments are typically a great idea for borrowers across all credit ranges!
Is Zero Down a Bad Idea?
Opting for a zero-down car loan isn’t a bad thing – but with a lower credit score, it’s not likely to happen. Most bad credit auto lenders require at least $1,000 down or that you bring at least 10% of the vehicle’s selling price to the table. Down payments are a requirement of most subprime (bad credit) lenders, and it’s often called having “skin in the game.”
Research shows that borrowers with skin in the game are more likely to complete a car loan. To a lender, a borrower that brings a down payment to a deal is more likely to make their payments, complete the loan, and avoid default. It also means a higher likelihood of qualifying for the auto loan.
Down payments can widen your vehicle choices since they allow you to get into more expensive cars that are outside your preapproval amount. If you’re approved for a $15,000 auto loan, but can’t find anything for your situation, adding a larger down payment amount may open up more vehicle choices. In this scenario, if you have your heart set on an $18,000 vehicle, coming in with a $3,000 down payment could put it in your price range.
More Down Payment Benefits
Auto loans are typically simple interest loans, meaning you’re charged interest on the principal of your loan. If you combine a large loan amount, a high interest rate, and a long term, it can mean paying more than your vehicle is worth.
High loan amount + High interest rate + Long loan term = Paying more interest charges. A down payment can combat this, and help save you money.
For borrowers with poor credit, a high interest rate could mean paying more for your auto loan – but a down payment can soften the blow.
Down payments can help protect you from negative equity, too. Negative equity is when you owe more on the auto loan than what the car is valued at. Vehicles are depreciating assets, meaning they lose value over time, and that never stops.
Negative equity causes problems for borrowers when it’s time to sell the vehicle. If you owe thousands more on the loan than what you can sell the car for, you may not be able to sell the car. You must pay off the loan before you can transfer vehicle ownership.
If you finance a vehicle for $10,000, that car may not be worth $10,000 in a year. Most used vehicles lose around 10% to 15% of their value each year. Brand new vehicles can see around a 20% drop in value within the first 12 months of ownership! Having a down payment can help keep your auto loan in an equity position, which means you’re likely to have fewer issues selling the car if you need to.
How Much Should Save for a Down Payment?
Your down payment requirement largely depends on your credit score and the size of the loan you’re applying for. Like we mentioned, saving at least $1,000 is probably a good starting point if your credit score is less than perfect. But if the vehicle you want is expensive, it could mean having to shell out more cash than that to qualify for the loan.
How much you need to save can also depend on your monthly budget. If you want a specific vehicle but the monthly payments are too high, you can put more cash down to lower your payment and make the loan work for your situation. You can use our auto loan calculator to estimate how much you may need to put down to get your car payment where you want.
You also don’t need cold, hard cash to meet a down payment requirement. Trade-ins with equity can completely satisfy a down payment requirement if there’s enough value, or you can use a combination of cash and your trade-in. If you have a car you’d like to trade in, research its estimated value on sites such as NADAguides and Kelley Blue Book so you can see what a dealer may offer.
The bottom line with down payments is you should save as much as you comfortably can afford. Even if you qualify for a zero-down car loan, putting cash down on your next auto loan is only going to bring you benefits in the long run.
Where Can I Find Bad Credit Car Loans?
If your income or credit score isn’t quite up to snuff, then you can expect to need some cash down to qualify for vehicle financing. You may also need to work with the right auto lender to get the vehicle financing you need.
With a lower credit score, not only are you faced with a down payment requirement but also the struggle of having to find an auto lender that can work with poor credit. Most traditional auto lenders prefer borrowers with good credit. If your credit score is rough around the edges, then applying for vehicle financing through a special finance dealership could be the way to go.
Special finance dealerships are signed up with subprime lenders. These lenders specialize in assisting borrowers with credit challenges and look at more than your credit reports and score. They do require a down payment, but they can often work around tough credit circumstances.
At Auto Credit Express, we’ve amassed a nationwide network of special finance dealerships and we want to help you find one in your local area. To get matched to a dealer near you that has bad credit lending options, fill out our free auto loan request form.
Bad Credit Credit Cards – Personal Finances News – 30 Essential Money Habits | Fintech Zoom
What are you doing every day that can help you grow your bank account? If you can’t answer that question, it’s time to develop some new money habits.
Just like with your physical health, your financial health depends on the daily decisions you make every day. While healthy habits such as eating better and exercising keep you fit, certain money habits can keep you financially comfortable and help you establish wealth. Click through for money habits you should be doing on a daily basis if you want to be rich.
Last updated: Feb. 24, 2021
Sponsored by Navy Federal Credit Union.
1. Spend Less Than You Earn
This habit is Personal Finance 101. It’s always going to be true that you’ll never get ahead financially if you always have more money going out than coming in. The great news is there are two ways you can work on this habit: Focus both on growing your income and controlling your spending to live within your means.
2. Keep Looking for New Earning Opportunities
As much as controlling spending is an essential habits, earning more money can be just as important. Look for ways to increase your income.
It could be something small, like babysitting once a week or bigger like selling crafts online.
3. Grow and Invest Your Money
In addition to looking for ways to earn money, financially savvy people also look for ways to grow the money they have. That can be as simple as finding a high-yield savings account where you can stash your funds and earn more than you would with a lower interest savings or checking account.
4. Continuously Pay Down Debt
Interest and debt can hold you back financially. It’s nearly impossible to get ahead and create a financially secure future when you’re always paying off yesterday’s purchases.
If you’re dealing with high-interest credit card debt, you can tackle it faster by taking advantage of a lower interest rate. For example, Navy Federal Credit Union’s Platinum card offers 0% APR on balance transfers for 12 months. By transferring your high-interest credit card debt to this card, you can potentially save hundreds or more on interest.
And if you also have a plan to pay off the card completely within a year, you’ll be saving so much more on top.
*Information on promotions is accurate as of Feb. 3, 2021. Additional requirements may apply. Offers and terms are subject to change.
5. Pay Yourself First
When people say “pay yourself first,” they mean you should take your savings out of your paycheck as soon as it hits your checking account to make sure you save something before you spend it all on bills and other expenses. The key to saving successfully is to save first, save a lot — 10% to 20% is often recommended — and save often.
6. Maintain an Emergency Fund
Virtually every personal finance expert agrees that an emergency fund is central to financial health. Building and maintaining an emergency fund can help you avoid debt and give you a reserve to draw from, which can also help you keep your financial goals on track even through life’s setbacks.
Start small by saving at least one month’s worth of expenses, and then work your way up to saving a larger emergency fund, such as a year’s worth. Having several months’ worth of expenses saved up can protect you against financial concerns when crises like a job loss or medical emergency come up.
Related: Here’s How Much You Should Have in Your Emergency Fund
7. Set Financial Goals
To know what daily money habits to focus on and prioritize your money management the right way, you have to know what you’re trying to accomplish. Review your finances. Look specifically for the biggest drains on your money, such as overdraft fees or high-interest debt, and also spend some time thinking about what you’d like your finances to look like in the future. Then, identify specific steps required to achieve your short- and long-term money goals.
8. Budget For Extra Expenses
In addition to basic living expenses and bills, you should also budget for other purchases you’re in the habit of making. Whether it’s buying a coffee twice a week, eating out on the weekends or buying gifts for friends and family, these seemingly little expenses can add up and suck your budget dry if you don’t plan for them.
Write down everything you’ve spent money on in the past month — go back further if you can remember or look up transaction records and receipts — and categorize each expense. Rank each category by how important it is to you. Add the top three priorities as line items in your budget, such as $100 a month for date nights or $20 a month to buy supplies for your hobby. For everything else, work on dropping those spending habits or finding cheaper alternatives like brewing your coffee at home.
9. Save For the Unexpected
Extra costs can come up frequently, and whether or not they’re true emergencies, they can still set you back. Maybe your tooth filling falls out, your pet decides to eat half a rug and needs emergency medical care, you get a flat tire or your kid wants to start playing a sport. Your finances will get hit twice as hard by these unexpected expenses if you don’t have extra money saved to cover them.
Having a buffer fund can create a little bit of wiggle room in your accounts so you can pay for these costs without going into debt or pulling money from your emergency fund. Try socking away $1,000 for each member of your household, for example, including pets.
10. Get and Stay Insured
In addition to a buffer fund, you should also consider insurance. Insurance is an important protection that can stand between you and bankruptcy due to a major emergency. Make sure you have the following types of insurance, if they apply to you:
Stay current on all policies so coverage will never lapse when you and your family need it most.
11. Review Your Progress Regularly
Set aside time each week to check on your financial goals. Did you make progress? Were there any setbacks? Track how you’re doing and celebrate your wins — not by splurging, though — to keep yourself motivated and on course.
12. Track Your Money
You can’t put your money where it matters if you don’t know where it’s going. Figure out a system to keep track of your financial transactions. Whether you prefer using pen and paper to reconcile your bank accounts the old-fashioned way or the personal finance apps like Mint, you need to have a clear picture of what is happening with your money. Tracking your spending can help you quickly identify problem areas that you can improve on and see the progress you’re making.
13. Check Financial Accounts Often
As part of keeping track of your money, you should check on all financial accounts on a regular basis. You should review spending accounts, like credit cards and checking accounts, daily in terms of checking balances and tracking expenses. Review bills when making monthly payments and updating your budget to make sure you avoid overdrafts or late fees.
Savings accounts should get a once-over weekly or monthly to keep them on track. Retirement accounts and investments can be reviewed less frequently, such as monthly, quarterly or biannually.
14. Carry Only the Money or Cards You Need
If your wallet is so full that you can hardly close it, consider limiting what you choose to carry to the bare necessities: one debit card, enough cash to cover a meal or ride home, and one form of identification — but not your Social Security card. You can’t spend money you don’t have with you, so leave credit cards and extra cash at home to resist the temptation to spend.
Leaving credit cards at home can also limit your vulnerability to identity theft should your wallet ever be lost or stolen. Plus, charging all purchases to the same debit card and linked account will make it simpler to track your spending.
15. Pay Bills on Time
Not only will paying bills on time save you money on late fees and penalties, but it is also key to financial peace and health.
If making payments on time is a struggle for you, review each bill you pay on a monthly basis and write down the due date. Set reminders on your calendar, alerts on your phone or sign up for reminder emails if they’re offered so you never miss a payment.
16. Automate Your Money
Another way to avoid late payments is to automate your transactions. For payments, set up automatic transfers through your bank’s online bill pay service to send money out to pay bills at least three days ahead of the due dates.
Automation is also great for the “paying yourself first” habit. If you have a retirement account through work, set up automatic contributions. If you get regular paychecks in fixed amounts, set up automatic transfers to move money from your checking account to a savings account or retirement fund right after payday. Monitor these automatic transfers so that you never overdraft an account.
17. Make Smart Moves To Tackle Your Debt
High-interest debt like credit cards can be extremely difficult to pay off. In order to tackle this debt sooner and more easily, consider your options.
By transferring your high-interest credit card debt to a card that offers a helpful balance transfer option, like Navy Federal’s Platinum card, you can make your money go further. The card’s offer of 0% intro APR on balance transfers for 12 months also doesn’t come with balance transfer fees, which is a perk you don’t see everywhere. It also doesn’t have any annual fees or foreign transaction fees. And with 24/7 stateside member service representatives that understand the needs of the military community, you can set yourself up for a successful future this way. Navy Federal membership is open to active duty military, veterans and families.
*Information on promotions is accurate as of Feb. 3, 2021. Additional requirements may apply. Offers and terms are subject to change.
18. Do It Yourself
Convenience is attractive, but it also can be expensive. Some services are worth paying for so that you can free up your time — or avoid incurring more costs by botching the job — but you can save yourself potentially thousands by getting in the habit of tackling many projects yourself. Simple things like preparing meals at home or buying a manicure kit to maintain your own nails can add up to big savings.
19. Build Your Credit
It can be easy to get complacent about your credit score and forget to pay attention to your credit report — until you try to get a home loan or turn in a rental application and are reminded of how important they are.
Check your credit reports yearly, and get any issues resolved if there are errors on them. Make sure you’re managing your credit well by paying off bills on time and keeping balances low. These money habits can help you avoid high-interest costs as well as build your credit.
20. Invest In Yourself
The best place you can put your money is into improving your value and net worth. From daily habits like eating well and getting enough sleep to big life steps like finishing school or switching careers, you should adopt the mindset of always growing and achieving goals that have long-term benefits.
21. Save For Retirement
Saving early and frequently is one of the secrets to retiring with financial security. Don’t put today’s wants ahead of tomorrow’s needs. Set up a retirement account and start adding to it each month.
Figure out how much you need to save before you retire and make a concrete plan to do it. Learn more about financial planning and investing to grow your money and keep up with inflation.
22. Get Your 401(k) Employer Match
Along with saving for retirement, put money toward employer-sponsored retirement accounts, especially if your employer will match your contributions. Employer contributions are free money — all you have to do is set a little cash aside for retirement, which is what you should be doing anyway.
23. Learn To Want (and Buy) Less
Resist the urge to buy this product and pay for that service to be happy, attractive, fun or anything else that marketing campaigns are designed to make you think. Practice mindfulness through diligent budgeting and possibly through habits that can help you improve how you feel, such as meditation and gratitude journaling, so that you remember to appreciate what you have. Make sure you’re the one deciding what your money should be spent on, not marketers or your peers.
24. Shop With a Plan
Shopping mindlessly leads to overspending and indulging in impulse buys. Planning ahead, especially when grocery shopping, can help you stick to buying what you actually need and avoid wasting money. Make a shopping list, stick to it, and try to get in and out of the store as fast as possible.
25. Compare Costs on Everything
To spend money wisely, you need to be able to decide if what you are getting is a good enough value to justify the cost. Get in the habit of comparing prices of products as well as comparing prices against their value to you. Some personal finance experts suggest you start by comparing your hourly wage to the cost of the item you want to buy.
For example, is that pair of shoes really worth three hours of pay? Then compare the cost of the thing you want to other things you could use the money for, such as paying off high-interest debt.
Lastly, compare the actual item to others like it. Is there a less-expensive alternative that offers the same product or service at a lower cost? If you spend a little more, can you get a better version that would last twice as long? Weighing these options can help you buy less junk, cut down on waste and lead you to choices that offer real value and higher quality.
26. Use Coupons and Ask For Discounts
Look for coupons, deals and discounts. Whenever you make plans to spend, whether it’s heading out to the bar with friends or signing up for a new internet service, check for deals and look for ways to spend less. Maybe the bar has a happy hour and you can save money by getting together earlier. The cable and internet company could be offering a special deal for new customers. Even your credit card issuer might give you a rate discount if you ask.
Only look for deals once you’ve already decided your purchase is a smart one. Don’t use discounts and coupons to justify frivolous spending.
27. Learn From Financial Setbacks
Almost as important as knowing the right things to do is knowing how to get back on track when things go wrong. Almost everyone faces financial setbacks at some point.
Practicing the habit of facing setbacks head-on. Look back on past financial missteps so that you can identify what went wrong and how you can prevent those problems in the future.
28. Fix Bad Habits
As you set and practice new, financially healthy habits, you can’t let yourself off the hook for those few bad habits that will inevitably stick around.
Maybe you avoid problems when they come up instead of quickly resolving them or you too easily justify overspending when you’re out with friends. Chances are you have a handful of money habits that are tripping you up again and again, and these bad habits can potentially do more damage than good habits can fix.
Whatever the issue, don’t let yourself sabotage your efforts to build wealth. Along with building positive habits, work to get past your financial weaknesses and be honest with yourself if you’re spending to fulfill an emotional desire instead of meeting a true need.
29. Educate Yourself on Finances
If you’re serious about building financial health and wealth, then you need to educate yourself. After all, you can’t make the best financial choices if you have no idea what your options are and how each decision will impact your life and money down the road. Start small by reading some personal finance books and spending a few minutes each day reading personal finance articles (just like you are right now).
When researching options to make a decision, dive deep into the pros and cons of your choices. Whether you’re shopping for a car loan or the right mortgage or are trying to find the right financial planner or investment vehicles, you’ll be able to make decisions wisely and confidently when you have learned as much as you can about the topic.
30. Take Advantage of Cash Back
If you have a credit card that offers cash back on everyday purchases, why not use it to put more money in your back account? Get in the habit of using your card whenever there’s a cash-back opportunity. Just be careful not to spend more than you can afford to pay back.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 30 Essential Money Habits
Bad Credit Credit Cards – Personal Finances News – 30 Essential Money Habits | Fintech Zoom
HER STORY: I read a quote the other day that said “your story is part of your brand. If they don’t know you, they don’t care about your products.” I share a lot about my life on my social media but it’s only what I want you all to see. The thing is, there is so much more you don’t know. So here’s my story…
I was born in Sacramento, CA, and grew up in Oak Park. Home to local gangs, violence, and drugs. I was raised by a single mom of three (the new norm) and I had a great childhood. She never made life look hard. My older brother and sister were very different than me. I was shy, quiet, a book warm, loved to draw, kindhearted, sensitive, giving, patient, and stayed in the house for the most part. My brother didn’t like me to be out in the streets. Everyone would say I don’t have street smarts…they were right.
Fast forward a bit, I attended Sacramento High School and had the option of graduating early. It was a year earlier than planned but I knew what I wanted to be, a fashion designer. I applied to the Fashion Institute of Design and Merchandising in San Francisco and was accepted. I got into the school of my dreams but ended up not going because I didn’t qualify for financial aid, and though my mom offered to sell the house so we could afford it, I declined. I graduated in May of 2005 and made the decision to take a year off of school and then attend Sacramento Community College.
After a year of being in college, getting all A’s and crushing it, my nephews were in a car accident. Their father was in a coma for months, my sister quit her job to be by his side only to find out he had another baby on the way. When he woke up, she packed everything and moved to Georgia. A few months went by, and she returned for Thanksgiving. Taking care of two kids on your own isn’t easy and I could tell she needed help so I offered to take in one of the boys until she was back on her feet. She kept asking me how I would make it work and i said, “I’ll figure it out”. Long story short, I became a full-time aunt at 18.
Going from living your life as a carefree college student with minimum bills to a full-time mom of a 1-year-old with no experience or time to prep was hard. I was financially okay for a little while but bills just started adding up. I started using credit cards which would then go in collections, and I couldn’t afford a babysitter so that I could go to school so I changed my classes to be online. Well, I still needed time to study and actually do my work but I couldn’t find/afford a sitter for that either. Needless to say, I dropped out. It was hard because I felt like I had failed. I felt like I was failing him. He became my new purpose, every decision and step I made would affect him and all i wanted to do was provide the best life for him. Soon the time came for me to let him go back to his mom, my sister, and it crushed every fiber in my body. I felt lost and I felt empty. I never wanted kids until I had him. He changed my entire life.
It took time to heal and get back into the groove of things. I ended up moving to Los Angeles on a hope, a dream, $500 in my pocket, no car, bad credit and no plan. I literally had to figure it out, and fast.
Within two weeks I landed a job in the fashion industry where I participated in fashion shows, learned so much about the business, and helped in LA Fashion Week. I did it all and learned that this was not the field I wanted to be in. I wasn’t happy at all. I would work all day and then come home and paint my pain. It wasn’t until 64 paintings later that I decided to pack my stuff and move back home to Sacramento.
Again, I moved with $300 in my pocket, no car, bad credit, no plans and this time I had one dream, to have an art show. With $300 to my name and no idea how to plan an art show, I made it happen. Within one month of being home, I found a temporary job at a real estate firm and planned a successful art show making $2,400. Life felt good again.
Six years ago I had nothing and was mentally at what I thought was my lowest point. As of today I now have more than $200 to my name, great credit, my own car, I’m a permanent employee at my “temporary” job, have my own art business, I am founder of the charity Give Back Sac, and I am a homeowner. It took awhile to get to this point but it hasn’t been easy, for most it never is, but I’ve always lived by the saying, I’ll figure it out, and that’s exactly what I continue to do every day, take it day by day and figure it out along the way.
Thank you for taking the time to learn about me and my life. Though there is so much more I could tell you, I hope this gives you a little more insight as to who I am.
Keep in touch with Pastel Rae: https://www.pastelrae.com/ IG: @PASTELRAE