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A credit score is a score or number value based on many factors of your credit. There are three major credit bureau agencies: Trans Union, Equifax and Experian, that determine your score from information reported to them by multiple sources, such as lending institutions, collection agencies, basically any one who either lends some sort of loan whether it be a home loan, auto loan, credit card, unpaid utility or medical bills etc.
Credit bureau’s are agencies that allow prospective future lenders to review you past credit history as it has been reported to them for a multitude of prior lenders you have done business with. The top three most common credit bureau agencies are: Equifax Experian and Trans Union.
Short term loans are typically 6 month loans to 36 month loans. Short term loans result in paying off the amount you borrow in a short or faster period of time. It is to the consumers benefit to discipline them selves to commit to a short term loan as it pays off the loan quicker and saves in total interest charges significantly versus long term loans. If a person puts more than 12,000 miles a year an a vehicle they should seriously attempt to enter into a short term loan, by driving more miles per year the vehicle depreciates faster than a car that is driven less. By entering into a short term loan you are paying the loan off faster and therefore keeping up with the accelerated depreciation when driving a car more and placing more miles on it. Make every attempt possible to avoid a long term loan as it will also help to avoid negative equity.
Lower dollar loans vary widely based on the particular vehicle your buying and different people perception. Buckeye Financial considers lower dollar loans anywhere from 2000 to 7000, however exceptions are often made based on the consultation process amount of money down payment plan and term of loan. Many lenders encourage higher dollar loans resulting in increased profits from interest made by lending more money. Most every lender encourages or recommends that you put 10% to 20% down plus tax and title, however exceptions are made for those without negative equity and a higher credit standing.
Interest is a charge for borrowing money generally a percentage of the amount borrowed. The goal for anyone borrowing money is to pay the least amount of interest as possible from any given lender. Total interest is different than an interest rate. A lower interest rate doesn’t always mean lower total interest. It is important that you determine the amount of total interest. You can do this by multiplying your monthly payments times the term of the loan and then subtracting your beginning loan balance. This will give you your total interest assuming there are no other fees such as late fees etc. Be sure when comparing loan offers you compare the total amount of interest the bank will make.
Terms of a loan are far more than just an interest rate. Are there any fees that need to be added to the loan such as, early payoff charges late payment charges early termination fees etc. The important things to find out about the terms of any loan offer are; the loan amount, the interest rate, the length of the loan, the total interest paid and your estimated payoff after 2 and 3 years. Its important to look into the future and have an estimate on how much you will owe after 2 or 3 years into any given automobile loan.