Considering the need for that image so many people want to present of themselves, one thing to show the world is a new car. However, with the expense of a new car, there are few people who can pay for one completely in cash, leaving a great reliance on banks and credit unions for auto financing.
The Need for Auto Financing
With the expensive and luxurious new cars on the market, there is already a great need for financing rather than outright payment. Additionally, if you find the need for an automobile that makes your commute and transportation needs at least acceptable then there are used cars available as well. However, we often notice today that the used cars on sale from different dealerships are overpriced. This also brings about the need for financing rather than a simple cash payment, leaving you without car debt. For this reason, most borrowers have over $17,000 is auto debt. With combined principal and interest you end up paying much more in the long run than your car was originally worth.
Other Financing and Credit Accounts
Another method of financing for general expenses, including daily needs, are the credit cards that so many people own. Roughly 70% of all Americans have at least one credit card. Considering the fact that so many online payment services provide the option to pay with a credit card or the debit card linked to a checking account, there is always the potential for additional interest or fees acquired.
Home Loans are Another of the Most Common Financing
Considering the cost of a home, there would be very few people able to pay the incredible amount solid at once. Then the importance of credit scores when applying for these large amounts also lead to how much will be paid in the end. Additionally, with the option for a home loan including possible federal assistance, there is much to gain with applying for a mortgage rather than paying large amounts of rent for a property you may not own. Same thing for auto financing, with the need to search for the proper loan terms and payments to meet your budget and the long-term amount paid off.