Tips & Resources for Alternative Car Finance Options
On Time Payments
Busy schedules, school, and different due dates for bills can make it difficult to make payments on time difficult. Most people have good intentions of paying their bills on time but life’s complications sometimes get in the way. On-time payments are a critical component of improving and maintaining good credit.
The good news is that there are many ways to make the on-time payment process easier. Many banks offer bill payment services where you can set up the due dates and amounts, then they send payments on your behalf.
You can always contact your account manager at 205-838-2219 to learn more about these options. One of our key goals is to assist our customers in improving their financial well-being by managing their auto loan through on-time payments.
The Cost of Late Payments
First, most loans accrue interest daily so failing to pay on the due date will increase the interest accrual on your loan. While many loans have a grace period, there is no grace period on interest accrual.
Secondly, late fees can significantly increase the cost of borrowing. Depending on the terms of the contract, late fees are often as much as 5% of the late payment amount. These fees could considerably increase the cost of borrowing, so it is always best to pay within the grace period if not paying on time.
However, the largest cost of late payments can come after the loan, affecting your credit report and credit score. Repayment history is one of the largest components in calculating your credit score. In fact, according to FICO 35% of your credit score is directly related to payment history. The credit score is utilized by most lenders to determine financing terms. Therefore, improving and maintaining a good credit score is a key component to improving your financial well-being.
Credit Scores: http://www.myfico.com/credit-education/credit-report-credit-score-articles/
Free Budgeting: https://www.mint.com/
Dealing with Debt Problems: https://www.consumer.ftc.gov/articles/0150-coping-debt