Tip: Keep your welcome letter with your records as long as you have the loan

Tip: Keep your welcome letter with your records as long as you have the loan

This article was co-authored by Samantha Gorelick, CFP® and by wikiHow staff writer, Jennifer Mueller, JD. Samantha Gorelick is a Lead Financial Planner at Brunch Budget, a financial planning and coaching organization. Samantha has over 6 years of experience in the financial services industry, and has held the Certified Financial Planner™ designation since 2017. Samantha specializes in personal finance, working with clients to understand their money personality while teaching them how to build their credit, manage cash flow, and accomplish their goals.

Since most people can’t afford to pay the full purchase price of a car in cash, getting car loans is a necessary part of life. Fortunately, most lenders provide several different methods of payment so you can choose the most convenient way to make your car loan payments. If you find you have a little extra money each month, you can save money on interest if you pay your loan off early. On the other hand, if you’re having trouble making your car payment, you may be able to get the loan refinanced.

Warning: Dealer-financed cars can be tempting if you have poor credit, but they may end up costing you more in interest and may not do anything to help improve your credit

  • Sometimes dealers finance vehicles directly. If you purchased a dealer-financed vehicle, you should have payment information included with the paperwork you received when you bought your car.
  • If your dealer arranged financing through a third-party lender, you’ll likely find their name on your bill of sale.

Warning: Dealer-financed cars can be tempting if you have https://worldloans.online/installment-loans-mi/ poor credit, but they may end up costing you more in interest and may not do anything to help improve your credit

  • If you don’t receive a welcome letter, you should still be able to set up an account online to manage all of your loan information. X Research source

It provides important information that you might need to know, including the terms of your loan, the amount of your monthly payment, the interest rate, and the amount of any late fees or penalties.

Warning: Dealer-financed cars can be tempting if you have poor credit, but they may end up costing you more in interest and may not do anything to help improve your credit

  • Most lenders prefer a direct draft from your bank account. You will need your account number and your bank’s routing number to set this up. These numbers are at the bottom of your personal checks. If you don’t have personal checks, you can find this information on your bank’s website.
  • Some lenders allow you to make payments using a debit or credit card. However, before you set this up, make sure you won’t be charged any extra fees. Debit or credit card payments also may take additional processing time.

Warning: Dealer-financed cars can be tempting if you have poor credit, but they may end up costing you more in interest and may not do anything to help improve your credit

  • If you don’t have personal checks, you can also use a money order or cashier’s check to make your payment through the mail.
  • If you mail in your payment, make sure you mail it in plenty of time for it to get there before the due date or it might be considered late. Most auto lenders process payments as of the date they’re received, not the postmark date on the envelope.

Warning: Dealer-financed cars can be tempting if you have poor credit, but they may end up costing you more in interest and may not do anything to help improve your credit

  • Some dealers may require you to make weekly or bi-weekly payments. If payments are scheduled more than once a month, this is typically based on how often you get paid. For example, if you get paid every other week, the dealer may expect you to make a car payment every payday instead of just once a month.

Warning: Dealer-financed cars can be tempting if you have poor credit, but they may end up costing you more in interest and may not do anything to help improve your credit

  • If your car loan has fixed interest, you may be better off simply making the monthly payments on time through the end of the loan – especially if those on-time payments are reported on your credit report. If you have extra money to put toward the loan, deposit it in a savings account instead so you can earn interest off of that money in the meantime.

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