Why A No Payment For 90 Days Auto Loan Is A Savvy Way To Save
Getting an auto loan means committing to a long-term monthly payment. Even if the monthly payment fits snuggly into your budget, you will need to make sure you are prepared to start payments on a big purchase. When selecting an auto loan, one loan that can set you up for success is a no payment for 90 days loan. Here are a few reasons to go with a loan that gives you a little time before the first payment is due.
You can save instead of overspending for the first two months
Within the few weeks after purchasing a new or new-to-you vehicle, you will need to get the vehicle inspected, get new plates and tags, and possibly begin adding interior or exterior decor to the car. All of these things will come at a cost. This will allow you to use some of the money you would have to put towards the monthly payment into the rest of the expenses for the vehicle. If you tend to live on a budget, this is a helpful way to set up your vehicle purchase without having to come up with additional cash for the new car amenities.
You can stash away two months of payments
Even though the payments will start after the 3rd month of ownership, you should start putting away the monthly payment in the first month. Open up a new savings account or checking account to stash the monthly payment amount before the 90 days are up. Once you begin your payments, you will have at least two months of payments saved up. In the event you have a month that is tight money-wise, you will have a few months of payments that are saved to pull from. This can save you from defaulting on your car payments, which can cause credit damage.
You can begin saving for an early payoff
The sooner you pay off your vehicle, the less interest you will owe on the vehicle. Saving three months of payment will allow you to pay off the vehicle at least three months early. If you can continue to save money while paying on the vehicle, you may be able to get at least one year's worth of payments saved within one to two years into the vehicle loan. Paying off the car several months to a year early will put you in a good financial position for the future and save on car interest payments.
For more information, contact a local institution like Premier Financial Credit Union.
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