You might decide to get a car loan because you want to start driving a new car to work and other destinations. You understand the risk that comes with financing, but you pursue it anyway. After all, it’s the only way for you to afford a new car finally. Besides, if you compute the monthly costs, you won’t feel like it’s too big of a burden. Even with no deposit car finance, the monthly payments remain affordable.
The problem is that you only think about your current financial situation. Since you have a full-time job that pays well, you believe you can afford to pay back the loan. Since the financing scheme lasts for three to five years, you can’t predict what will happen. It’s possible that you end up with a big financial problem, and you can no longer afford the monthly payments.
As a result, you might decide to obtain another loan. It might seem like a logical choice, so you can pay for your car loan, but it’s not. Getting another loan to pay for an existing loan is a terrible financial mistake that will place you in an even bigger hole.
Check your budget
There might be something wrong with how you budget your income. It’s one of the reasons why you can’t pay all your bills. If you have recurring bills, you already know how much to set aside each month. Stick to your budget, and don’t get tempted to buy things that are not on the list. If there are other items you can remove from that list so you can afford the car loan, you need to do it. Cancel your trips and weekend night out with friends. Instead of going to a spa, you can have pampering sessions with your kids at home. Yes, it entails a lot of sacrifices, but it’s for the payment of your car loan.
Pay the bills first
Before you decide to use your income for various transactions, you have to prioritize the payment of your bills. You can distribute the rest of your income for other monthly expenses once you have already paid the bills. The problem when you don’t prioritize your bills is that you end up with no money left. It’s the reason why you have a hard time paying them.
Don’t delay even for a day
No matter what happens, you have to make sure that you prioritize your car loan. You can’t afford even a day of delay. It could lead to charges and other fees. The amount will keep piling up, and before you know it, you’ll only be paying the charges. Your principal loan remains the same. You can renegotiate the terms with your dealer or creditor if you really can’t afford the monthly payments. Be brave enough to speak with them.