“BAD CREDIT RATING” How Much Money Per Month Does It Really Cost You?
How Much Is Your “Bad Credit Rating” Costing You On Your Car Loan?
Lynda, a member of this site emailed me today telling me that she has a very bad credit rating and is in desperate need of a new car. Her questions was: How can I get approved for a car loan if I have a really bad credit rating? Scanning todays paper I found 6 local car dealers offering Zero Interest – 60 Month Financing on all new car purchases. Of course in fine small print it stated “On Approved Credit Only”. So what is the rate for a good credit rating and what is the rate for a bad credit rating?
I decided to find out.
I called one of the dealers from the ads and he told me that in order to qualify for zero or low APR financing offered by manufacturers I would need a credit score of 760 or higher.
He went on to tell me that a credit score of 720-760 will get you a loan rate of around 4.5% and a score of 640-700 will get you a loan rate of around 14%.
I also asked him what the interest rate would be if I had a bad credit rating score of 510. He said he could probably find a sub prime lender for me and I would be charged rates in the 20% to 24%. He defined a bad credit rating in todays market as a credit score of under 620.
Now I don’t want to get into a debate on whether the rates this car salesman rattled off to me are accurate or not. I am sure that you might be able to get different rates if you have a score in the middle of these ranges that are better by a percent or more but lets for argument sake use this guys rates to answer the question, what is bad a credit rating costing you as far as your car loan goes?
Most of us need a car to get to and from work etc… and for example sake lets assume that both you and your significant other both have a bad credit rating and need a vehicle so for example sake we’ll say that you are a two car family. Are you ok with that? Let’s do the numbers.
Ooopps, almost forgot. Let’s also assume that if you have a handful of charge-offs and late pays etc… that you both have a bad credit rating of 510. If you have a judgment on your bad credit rating report your score might be down to 480-500. Ok, let’s do the numbers.
Let’s also assume that you both want to buy a new $25,000 Hybrid automobile with a full 6-10 year warranty because you are sick of spending money on repairs every other month. You have enough things to worry about trying to make ends meet without worrying about how much the next car repair is going to cost you. A new car will eliminate a lot of stress right? Ok, lets do the numbers.
Credit Score: Interest Rate: Monthly Payment: Total of 60 Payments:
780+ 0 $ 417/m $ 25,000
740-770 4.5% $ 466/m $ 27,965
650-730 14 % $ 582/m $ 34,903
Under 600 21 % $ 662/m $ 39,741
BAD CREDIT RATING: What Is It Costing You Extra on Your Auto Loans?
So here is what your “bad credit rating” is costing you. The difference between $662/m and $417/m is equal to $245/month. Now, if you multiple that by 2 because you and your significant other both need a vehicle you are being penalized a total of $490/month for having bad credit rating. And this $490 per month only takes into account the extra cost of your car payments. You have other monthly payments to make that your bad credit rating is costing you more for every single month. One example of another expense where your bad credit rating is costing you is for your car insurance. Your premium could very well cost you an extra $20-$30 each month. The list of expenses that will cost you more each month if you have bad credit rating goes on and on.
Considering that your car loans were spread over five years we have to multiply the $490/m times 60 months then your bad credit rating is costing you $490/m X 60 months = $ 29,400 over the next five years. Again, that is just the extra cost of your two automobiles. It doesn’t take into consideration all of the other expenses that you will be paying more for every month because of your bad credit rating. That’s depressing isn’t it?
Here’s Some Good News If You Have a Bad Credit Rating!
VERY IMPORTANT:
If you have a bad credit rating of under 600 today you could have all of the “Negative Credit” itmes removed from your bad credit rating in a few short months and have your bad credit rating score up high enough so that you qualify for that ZERO INTEREST rate or low APR financing offered by most new car manufacturers.
Does It Make Sense to Take Advantage of the 2 FOR 1 Special Offer
And Invest $599 To Get BOTH You and Your Significant Others Bad Credit Rating
Removed Permanently From Your Credit Reports?
You’ll Be Able To Save More Than the $599 per Month After the “Bad Credit Rating” is Removed For You! Think of how you will use all the extra money that you will have at your disposal every single month once you get the bad credit rating removed from your credit reports!
Why would you want to keep paying the Bank, Finance Company or Credit Card Company $500-$1000 extra each and every month. It is time to start looking out for yourself and your family. Grab the extra money. It is yours!
Grab the extra money. It is yours!
Click-Here Now to Get All of Your BAD CREDIT RATING Removed!
