About to take out my first loan to buy a car.?
ok, so I need $2000 to buy a car. (person to person, not from a lot) Through my bank I can get either an auto loan for $5000 or a personal loan for $3000.
With the auto loan theres a penalty for paying off early, but 5.9% interest rate.
The personal loan has a 13.06% interest rate and NO penalty for paying early.
I'm leaning more towards the personal loan because I can pay $1000 the first month and REALLY knock a lot off.
I have bad credit so the interest rates are going to be high for me anyways. Just wanted to make sure I'm making the better decision if I take the personal loan in lieu of the auto loan?
- sarahsmile90Lv 69 years agoFavorite Answer
You have bad credit and you qualify for an auto loan with a 5.9 interest rate? They are going to give you $5000 for a $2000 car? With bad credit you qualify for a personal loan? None of this makes sense too me, but if you can pay 1000 off in the first month, then why don't you just wait one more month and buy the car or another car with cash? So I vote no loan.
- mccoybluesLv 79 years ago
Why don't you save your money and pay cash for the car. If all you need is $2000 you should be able to come up with that amount in a few short months.
A 13% loan is crazy and forcing you to borrow more money then you need is foolish. It's just not a wise financial decision.
If you have bad credit you should understand that it is in your best interest to avoid these bad loan deals so you can work yourself out of the situation. Accepting these bad money choices will keep you in the situation you are in. Change your financial ways and get yourself out of debt and get yourself into a credit situation that you can live with. Stop living on borrowed money, start living with cash as your only money alternative.
- 9 years ago
i agreed if u save ur money in a few months and get a car without a personal loan,,, most people now can't afford to pay back the personal loan, as u said No penalty for paying early but what if u cant pay at the actual time and i believe other charges such as late charges and finance charges will be imposed and this is the reason why most of people cant pay back their personal loan due to the charges they imposed.Source(s): i will think twice when it comes to personal loan. And such a loan can be apply if u want to make a business opportunity and not for simply buying things that anybody wants.
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- pedro7of9Lv 79 years ago
you can have this...OR yo can have that..lol
what I would do is take out cheaper loan and pay it off on time,,what that does is
1 build up credit,, they dint like yu taking a loan and paying it quick
2 on a 2000 dollar car stuff will go wrong,,,,normal stuff,,tires,,brakes,,belts,,hoses,,tune,,oil,,,,but other things..like..alternator,,starter,,,water pump,,and 100 other things
so take 5% loan put the 1000 you say u can pay in bank to keep everthing running hay,,gas is 4 dollars a gallon!!!!
- Trump 2020Lv 79 years ago
If you're buying a 2 thousand dollar car, odds are it will need repairs very soon. Get the low interest loan, save the 1K for future repairs and save some money on interest.
Suppose you lose your job. You will need that extra money in the bank......
- WilliamLv 49 years ago
try Zopa. It's peer to peer lending on internet. lower interest rates and no penalties for early repayment. Or yeah, save up and spend what you can afford if you have a bad history of making repayments. or get a bike.
- Eye of InnocenceLv 79 years ago
I'd take the personal loan
- Anonymous9 years ago
Buy a newer lower milage auro.......2000.00 car isn't gonna be much to depend on.........you get what ya pay for.....Source(s): 23 years gm of a ford and honda store.....