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Should you get a loan for a car?

I want to get a new car but I'm a little worried about taking out a loan. I've heard it can hurt your credit, and I don't want to get into a bunch of debt. Is a car loan a bad idea?

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Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Getting a car loan can be a great way to make it more affordable! They aren’t right for everyone, though. So it’s smart you’re taking some time to think about whether or not you should get a loan for a car.
Here are some pros and cons of car loans.
On the plus side, getting a loan will make a new car much more affordable, especially since you’ll be able to pick the terms that work with your budget. You might even be able to buy a more expensive car since you’ll be paying it off over time. You’ll also be able to refinance your car if you need to.
However, when you get a car loan, you won’t own the car until your contract ends—meaning it could be repossessed if you fail to pay. You can also damage your credit score if you’re unable to make payments. Plus, you’ll have to pay interest costs, which could be pretty high.
Another way to get a car is to get a personal loan. It might be cheaper and have a lower interest rate than a car loan, and it will mean that you own the car from the moment of purchase. However, while the loan itself might be cheaper, your monthly payments could end up being much higher. Additionally, you’ll need to have a very good credit score to be eligible.
Before you make a decision, consider your options carefully. Keep in mind that your car payment won’t be your only added monthly bill. You’ll need to purchase car insurance for your new set of wheels, too. To keep your bills low, try using the
Jerry
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