Blog Challenge: Bria B.

Game of Loans: How You Know A Car Loan Is Right For You 

A form of independence is having a reliable ride going to and from. But this goal could be somewhat a hard task if you don’t have the funds to do it by yourself. Don’t fret! You haven’t thought of all your options, here’s when a car loan could come into play. Yes I said it, a car loan!

*PUBLIC SERVICE ANNOUNCEMENT* 

Prior to making a choice please do your homework before deciding what loan option is best for you. ALWAYS ask questions if you aren’t sold on the terms and conditions. The worst thing you want to do is commit to something and later on find out it’s not what you thought. 

Getting a loan is more than receiving money to help offset the cost, first you must determine what you can afford. This goes beyond the car itself. How will this loan factor with your monthly budget? 

  • Gas 
  • Insurance 
  • Maintenance
  • etc.

A tool to help with this is True Cost to Own Calculator. TCO allows you to calculate an estimated amount for other costs as mentioned above. 

Who. What. Where?

Car loans can come from multiple places: credit unions, banks and car dealers. Explore what each has to offer and figure out which works best.  

With banks and credit union offers, check APRs (annual percentage rate) on the loans. This determines the amount of interest on your total loan amount. The lower the APR could translate to lower monthly payments. Credit scores play a major part in this. The better your credit score, the lower interest rate you’ll qualify for. 

Loan Limit. 

Know the length of your car loan. The longer the length, interest rates will increase. A car loan recommended length should be between 36 to 60 months. Majority lengths of a new car loan is around 65 months. 

Is it really a deal from the dealer?

Financing through car dealers could be quick and somewhat easy but it’s not always affordable. Don’t let those special offers fool you, be aware. Some options with financing could include Credit Insurance (helps pay off your loan if a death occurs, you become disabled or unemployed) and Guaranteed Auto Protection (covers the difference between actual cash value of a damaged or stolen vehicle and amount owed on the car). 

One last thing: remember to make your payments ON TIME. DO NOT miss payments, it could hurt you in the long run.

Is a car loan for everyone, probably not. However, hopefully reading this blog has confirmed or made you want to do a bit more research before you make your decision. 

Keeping you financially aware, 

Bria 


Blog Challenge: Alyssa S.

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You’ve decided to go for it and are on the look out for your new chariot. Hold your horses though, this is something you need to seriously think about. For the most part, we need to know how you are going to pay for your new ride. Will you have the money to pay for it in full at the time of your purchase or are you going to need a car loan? Lets talk about it. 

Maybe this is the first time you're thinking about buying a newer car and you're wondering what a car loan is. Basically, its money that you borrow from a bank or lender and you pay them back over time until they have received all of their cash back. Car loans generally have interest so ultimately you will end up paying a little more for the vehicle in the long run. 

When looking to change vehicles a lot of people go for a brand new car. Sometimes we like to get a little ahead of ourselves. Check out some preowned cars before committing to buying something out of your price range. The chances of finding a used car with low miles at a great price are pretty good. In the end, the car with be more affordable, and while it may not be brand new, it will be brand new to you. This way, you will probably be able to pay cash up front and won’t have to worry about paying off a loan.

Let’s say you are actually thinking a car loan is the way to go. Your deciding factor should really be whether or not you can afford it. With a car loan you're going to be paying monthly for 3, 4, 5, even 6 years, so you need to make sure that is something you can keep up with. Along with that, you will still need to pay for car insurance, gas, and maintenance so you must think about those factors as well. Plus, depending on the loan’s interest, you will actually end up spending more than the actual price of the car to pay it off. A car loan is something you need to think about long term. Shop around different places before picking where to go for your loan. Different lenders have different interest rates and deals.

With all of this in mind, if you can afford to keep up with the payments and are willing to take on the responsibly a car loan might be the way to go. If not, check out some older, preowned cars, or keep your current car and money and continue saving for a new one in the future!

Spend Wisely,
Alyssa


Blog Challenge: Vanessa C.

Hello, Young & Free Michigan!

Start your engines! How do you know a car loan is right for you? Here are three ideas to consider:

  1. Money is power, knowledge is power, and “with great power comes great responsibility”, as our friendly neighborhood Spiderman would say. When deciding whether or not to take out a loan, have the foresight to know whether or not you are able to make monthly payments toward that loan. Budgeting is the key. This means, simply organizing your income in order to see if a car loan will work for you. P.S. Did you know that Michigan First Credit Union offers a 1% auto loan rate discount? With Michigan First, you can “Accelerate into First Gear”.
  2. An alternative to taking out a loan is leasing a vehicle. Pros to leasing a car include:
    • A lower down payment and lower monthly payments
    • Driving a “prettier” car for less each month
    • Driving a new car every two or three years
    • No stress when trading in at the end of the lease
    • Only paying sales tax on the portion of the car that is financed
    • However, there are cons to leasing your vehicle, as well…
    • You will not own the car at the end of the lease
    • Mileage is limited to a set amount and excess miles will need to be paid for at lease termination
    • Lease contracts tend to be confusing
    • Leasing a car is more expensive in the long run, as opposed to buying and owning it
    • Wear-and-tear charges paid at the end of the lease can add up.
  3. Lastly, is there public transportation where you live? Is it reliable? If so, you may not need to obtain an automobile at all. Take advantage of transportation services. The other plus is, you don’t need to purchase car insurance or pay for gas.

When it comes to taking out any kind of loan, you should have a budget in mind, so your credit score doesn’t suffer in the long run. If you are questioning taking out a loan or aren’t confident that you can make those monthly payments, DO NOT DO IT! It is better to have no credit than bad credit! Remember, if you aren’t ready to accelerate with monthly payments, STOP! Let the traffic clear, and proceed with caution! You don’t have to be a super hero to make smart choices about your money!

When you’re Young & Free, you don’t just be!

Until next time,
Vanessa 


Blog Challenge: Zachary N.

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How Do You Know a Car Loan
is Right for You?

So you’re looking for a “sick whip. Maybe you’re trying to attract a new ladyfriend. But before you sign on the dotted line, while the salesman curls his handlebar mustache, let’s think this through, shall we?

Do you want a new model?
If the answer is “yes”, great. I’m going to save a life today. Don’t EVER take out a loan for a brand new car. It depreciates very quickly, really, as soon as you take it off the lot. You will end up paying more for your vehicle than it’s worth in the long run. You’ll be driving around an $11,000 car, that once had a sticker price of $25,000, which you eventually pay $27,000 for. It’s not a good situation to be in.

You are much better off looking around for a used car that is good quality. These won’t depreciate nearly as fast. But try to remember that cars do depreciate as time goes on. So by taking out a loan you are almost always going to be losing money to some extent.

Do you have good credit?
Okay, so you’ve decided you want to buy a top quality used car to get the most bang for your buck. You’ve done plenty of shopping around, and you’ve found a great deal. Now it’s time to take a look at that credit score.

If you have good credit, you can good a lower interest rate. That’s a good thing. Make sure you know your credit score is going in. Especially if you’re going to a dealer. Most people think they have worse credit than they do. Dealerships know this.

Can you afford the vehicle?
Of course, you can afford the vehicle. It’s only four hundred bucks a month. But how does the long run look? Make sure you understand the length of time you will be paying off this loan and the amount of money it will cost you.

Many dealerships won’t make you pay a down payment if you have good credit. Tempting right? But make sure you can pay at least 20 percent. This will lower the amount of time you’ll be paying, lower your interest rate, and it will also help you avoid a situation where you owe more money than your car is worth.

Do you need the car?
If you don’t have a car to get to a job. And you want to buy a good quality, reasonably priced used car, but don’t have the money to buy it outright. Additionally you are diligent with your finances and have good credit. Congratulations I would say you are the best candidate for a car loan. Just make sure you shop around to find the best car, and the best financing options.

Some tips:

  • Try to keep the duration of the loan shorter. This will entail higher monthly payments but lower interest rates.
  • Pay for taxes, fees and “extras”, those dealerships would be happy to roll into your financing, with cash. If you can pay for these things up front it will save you from paying interesting them later.
  • A good strategy is to go to your bank or credit union and research their finance options. And then show them to the dealer and ask them to beat it or make a comparative price.

Blog Challenge: Marissa C.

Getting your first car loan can be difficult, especially for young adults with little to no credit. Deciding which car loan is right for you can be tough and depends on a couple of factors. Do you have a job you can show paychecks on? How is your credit history? Websites like creditkarma.com can give you your credit score. If you don’t understand credit scores, don’t worry, they are intimidating and confusing at first. Attend a credit score seminar at Michigan First credit union to learn about credit scores and get your credit score for free!

Make sure you do proper research to ensure you’re confident on what car loans are all about. Be sure to understand all the terms of the loan. When financing a car, get the shortest term you can afford. Having a shorter term will in turn give you higher monthly payments but lower interest rates. This beats having lower monthly payments and paying more than you have to in interest. Save up as much money as possible so you can put down as much as you can, this will also save you money in interest in the long run. Another tip is to pay for all the taxes, fees and “extras” in cash so you don’t increase the amount of your loan.

Shop around and find the best rates. Remember that used cars are always cheaper, and a new car isn’t always the best way to go, especially financially. Buying a new car is generally not a good idea because it depreciates greatly as soon as you drive it off the lot. A lightly used vehicle is the better option. If you’re under 18, you will need a parent to cosign for you. Be confident that you can afford not only the monthly payments, but also insurance, gas and maintenance fees.

Drive safe, young, and free

Marissa


Blog Challenge: Chloe D.

So You Need to buy a Car?

How do you know a car loan is right for you? This is something only you can answer. Before you answer that, here are a few things that are necessary to know.

  1. What is an auto loan?
    An auto loan allows you to purchase a new or new used vehicle. You borrow the money and pay back the lender over a period of time, usually with interest. Interest is the APR (Annual Percentage Rate) on the loan you take out. Some interests rates can be 1.99% and others can be 5.95%, they vary. It usually depends on three important things: your credit, your monthly income and your down payment.
  2. Do you need a cosigner?
    If you have bad credit, no credit, low monthly income or are under the age of 21, you will probably need a cosigner. A cosigner is someone who makes a legal obligation to pay your debt in the event that you cannot maintain the commitment. As long as payments are made on time, this will help build not only your credit but your cosigner’s as well. The ideal cosigner is usually, mom, dad, aunt, grandma or a guardian with a solid credit history.
  3. How much cash do you have for your down payment?
    You may want to save up a good amount of cash before signing up for a loan. Determining what to put down will affect how big or how little your monthly payments will be.
  4. Does your monthly income support the loan and possible interest rates?
    Determine your budget and current monetary commitments. Can you handle a bill this size? Do you already have bills like a cell phone bill, student loans and rent, etc.? When thinking of getting a car loan, consider other monetary expenses like: car insurance (Michigan is a "no fault" car insurance state so the rates are very high), car maintenance and unexpected expenses such as a flat tire.
  5. This will build your credit!
    Having an auto loan is a great way to show that you are capable and responsible to make monthly payments on time and consistently. Your payment history will most likely be reported to the three credit bureaus, Equifax, Experian and TransUnion. The Bureaus will keep track of your credit history and make it available to lenders. Having good credit is important for things like buying a house, renting an apartment, or getting a credit card for emergencies or travel.  

Committing to a car loan is a huge responsibility. It can be a great journey; it can build your credit score and give you the freedom to have your own dependable transportation. Remember to take your time and read carefully. If you want to know more about car loans check out this website below!
https://www.consumer.ftc.gov/articles/0056-understanding-vehicle-financing


Blog Challenge: Toi C.

Questions to ask yourself when deciding if a car loan is right for you

It’s time to start, Clueless reference with wavy hand motion, *rolling with the homies*. C’mon we’re 90s babies… I hope you got that. In this great state of Michigan we need more than just two legs to get around—that’s why most of us purchase our own vehicles. Now while everyone has to have a car right if you’re like me you may or may not have an extra $15,000 to spend. That’s why there are banks like Michigan First and other higher powers in place to get you one step closer to the open road.

Before you purchase, you need some COINS, but not all cash is good cash. Here are some questions to ask yourself so you know if an auto loan is right for you.

1. Does it fit your budget?
Alright Young and Free friends, remember a budget is a number you are financially comfortable and ABLE to meet. There’s no point on setting a ridiculously high number and then working crazy hours to meet the demands. It adds unnecessary stress and increases the chances of you ending up right back where you started with less money (insert repossession boogeyman noise here). Make sure to include the cost of your car and the interest of your payments as well.

2. Is the APR CRAY CRAY?
A cheap car means nothing if your interest rates are sky high. The higher the interest the more you have to pay back. Your annual percentage rate (APR) can produce major long- term savings IF it falls in the lower numbers. All my Young and Freeers, (ages 17-25), be sure you check out Michigan First because we have a 1% auto loan rate discount. That’s right we got your back! 

3. Are the terms reasonable?
The terms generally define how long you pay off your vehicle. Try and stick with a shorter term like 3-5 years. You want the car for a long time, but you don’t want to be paying it off forever.

4. Have I compared prices?
My Great Aunt Annie Mae told me don’t ever buy the first cow you see, which makes sense if you think about it and apply it to vehicles lol. Walk in a dealership with a guaranteed loan, but not before you check out a few places first. Don’t cheat yourself, treat yourself! Take some times and look at a few other offers before you decided which one is the best for you. 

Keep it Young, Fly, & Free

- Toi


Blog Challenge: Erin W.

To Cash? Or to Car Note?

Deciding to buy a car is usually one of the first real adult decisions you make as a Young and Freebie (Woot! Woot!). But after making that decision, adult reality really hits when you ask yourself: How will I buy it?

You have two options: 1) Pay cash, or 2) Pay with a car note.

Option 1: Paying Cash
Now, most people think that paying cash is always the best option. Which, I mean, it’s very legit. If you have it, by all means…

Of course, paying something and wiping your hands clean by not having to worry about a monthly payment seems more hassle free. Paying cash is pretty much like going to the grocery store, picking up a loaf of bread and some turkey meat, and paying the cashier, except, in car form.

But to buy a car outright more than likely means it’ll be used, because, let’s be real… if you had $30,000 to spare on a new car, you probably wouldn’t have to read this blog.

But even if you do “have it like that,” and have saved up a solid chunk of loot for a car, that doesn’t necessarily mean that you’re ready to let it all go at once. **Cue Frozen – Let It Go**

That’s where Option 2 comes in.

Option 2: Car Note
A car note is a little more complex than paying cash. To have a car note means that you took out a loan to purchase the car. Taking out a car loan is a fancy way to say that the bank is loaning you the money to help pay for the car. And I hate to break it to you friend, but they want their money back, plus some.

This means that every month, you’ll receive a bill, or car note, to pay the money back. Included in the bill is interest, which is basically a “thank you,” fee given to the bank for allowing you to borrow the money.

Here are a few questions you should ask yourself if you’re wondering if a car note is the best route for you:

  1. Do you make consistent money to afford a monthly bill?
    If you’ve saved up $5,000 for a car over the years, but don’t have a job yet, this may not be the best option for you. Paying cash for a car will prevent a monthly bill (excluding gas and repairs).
  2. Do you want a brand new car?
    AKA, new car smell is a must!
  3. Is the interest rate low?
    Interest rates vary, but make sure you’re getting the lowest possible.
  4. Do you have good credit?
    Bad credit = no loan… or a very sucky interest rate.

When it comes to taking out a loan, make sure you ask yourself these questions. Basically, you want the best car for your money. If you’ve saved up $10,000 for a car, taking this option means that you may put forth a large down payment, or initial payment, to reduce the monthly car note. Or, you can pay cash and not have to worry about a bill at all.

Follow us on social media for more money tips and tricks!
@YoungFreeMI

Be Easy,
Erin


Blog Challenge: Steffie S.

How Do You Know a Car Loan is Right for You?

One single tear rolls down your cheek as you watch the tow truck haul away your first ride or die chick, good ol’ Bessie, AKA your parent’s 1970 Dodge Charger R/T that just broke down on you in the middle of the road.

Now, the moment you’ve been waiting for…

CAR SHOPPING TIME!

But wait! You’ve never done this before!
How do you even know if this is right for you?
Well don’t you worry your pretty little head because I gotchu fam J

DON’T BUDGE THAT BUDGET

Knowing your budget sets the foundation for what kind of car you can afford. This includes paying for insurance as well. Your driving record, age, and the type of coverage you’re getting are all factors. (Not so) Fun Fact: Teen males are significantly more expensive to insure – yippee for being a girl!

CHECK YO CREDIT SCORE

Your credit score could be a huge reason you are either approved or denied a loan. Definitely check yours beforehand and work towards building a better score! A friend of mine recently confessed that if there’s one thing he learned when he was younger, is that it’s better to have good credit than to be rich with bad credit. 

I CAN GO THE DISTANCE

The length of your loan will be affected by how much you drive. If you’re a Hercules at heart, and you “can go the distance”, then you probably don’t want to commit to the seven year loan. Your car will be dead (like YOLO) before you even pay that off. On the other hand, if you rarely drive, you should take out a longer loan because your car will be worth more at the end.

I’M IN LOVE WITH THE CO CO-SIGNER

It’s common for us young folk, with little to no credit history, to have a family member with a well-established (oh you fancy huh) credit score to be a co-signer.  It helps get your foot in the door to the real world, and hopefully get more favorable terms on the loan you’re applying for.

The car you want should fit in with your lifestyle! Don’t be distracted by the look or fancy gadgets a car has. Just like human beings, it’s not what’s on the outside that counts :) Make sure you can take care of the car and actually make your payments. Remember, this obligation will have serious effects on your credit score.
SO NO PRESSURE ;)

Now what are you waiting for? Buckle up and hit the road Jack!


2016 Spokester Search: Meghan S.

Meghan is a 19-year-old from Detroit

Meghan's Situation

Hi, I’m Meghan!

Right now, I am a first-year undergraduate studying to receive my Bachelor of Bussiness Administration in Finance at Grand Valley State University. When I’m not at the library studying, I enjoy blogging, spending time on Pinterest, and hitting up the gym. 

Growing up can be scary when it comes to money management! All of the sudden you there are bills to be paid, food to be bought, college loans to be paid off etc. I believe Young and Free Michigan creates a great community to bring our generation together and share our tips and tricks to make this whole money management thing a little less frightening. I’m extremely excited to possibly be able to share all the things I have learned!

P.S. I also love frozen yogurt, road trips, and warm weather, and if I could visit anywhere in the world, I would visit Italy. 

Meghan's Blog Post

So I hear you’re planning a Michigan Vacation?! Whether you’re thinking about heading up north to see the Mackinac Bridge or visiting Detroit, the Paris of the West!

Here are some of my tips for traveling on a budget: 

1. Research, Research, Research

Unfortunately the best prices are not on the first page of google. It takes a little bit of research to find the best options for hotels or the best time to visit certain attractions. Everything gets more expensive the longer you wait! So plot your destination early and start searching the deals now (my favorite places to scout for deals are Groupon and LivingSocial). 

2. Avoid Dining Out 

Restaurant bills can add up and become quite pricey. Instead, make a trip to a local grocery store and stock up on the PB&J. You can set up picnics or pack to-go meals that will enable you to see more attractions in the area because you won’t have to stop for lunch. 

3. Carpool

Grab your friends and make it a road trip! Have everyone split the cost of gas

(you can use apps like AAA gas fuel calculator and TripAdvisor to help estimate how much you will spend on gas before you take off). 

4. Travel off-peak 

Taking vacations during off-peak times can seriously cut the cost. Peak times can vary on your Michigan destination, but typically major holidays and spring and summer breaks are good times to avoid. 

5. See what’s free

Every destination has its “must see” attractions but these can easily become the most expensive part of your trip. I suggest picking one or two of the must-see attractions and then filling the rest of the day with free alternatives (check out Michigan.org to find a park or free show near you). 

2016 Spokester Search: Kiesha D.

Kiesha is a 22-year-old from Eastpointe

Kiesha's Situation

I'm looking for the next big opportunity that is going to put my foot in the door to achieve great success while developing my skills in public speaking.

Kiesha's Blog Post

5. Use resources you already have to reduce spending.

If you're really tight on spending money while on vacation and is aiming to save than spend. This alternative is right for you. Your agenda will be a breeze and simple as possible. You may eat before the trip and pack bottles of water that will keep you hydrated. Also,...

4. Check the weather.

Checking the weather will ensure you if you need to reschedule your trip at another time and place if weather conditions aren't suitable to you. You don't want to plan a trip expecting a hot sunny day without checking the weather beforehand because that can lead into...

3. Stick to your budget.

Once you have a budget in place, stay committed to it.  I know it's easier said than done when you see tons of things you want to buy or can't seem to put down that cute trendy crop top or pair of shoes in stores that keeps screaming at you "buy me, buy me".  Trust me...

2. Create a budget plan.

This is crtical thing to do when planning a vacation trip. Come up with a budget plan of all expenses needed during vacation. The expenses may be the total costs of gas, tickets, hotel reservations, food and drinks. Also, other extra expenses you might decide to spend...

1. Plan Ahead.

When you plan to go on a vacation it's very important that you dont wait until the last minute. I cannot stress this enough but planning ahead is a must for anything you plan to do. Prices may vary all the time depending on the time and location you're planning to at...