I am going to buy a used car, I have $7,000, the car cost $12,000 So I am going to finance about $5,000. I also have a debt of $2,000 on my credit card. I am wondering if it would be better if I only pay $5,000 cash to the dealer and financed $7,000 and pay off my credit card with the remaining $2,000 cash?
you are making things unnecessarily complicated…
you have $7000 in savings
you have $2000 in credit card debt
you want a $12000 car…
pay off the credit card now with your savings = leaving you $5k in the bank…
use the $5k to put down on the car and get a loan for the rest – it shall be easier to get a loan if you aren't already in debt (ie large balance outstanding on your credit card)
Probably. I'm guessing the interest rate on your credit is much higher than the rate on the car loan.
that might depend if you can get the car loan of $7K rather than $5K
you may not qualify for the additional amount of the note
but since the interest rates are higher on the credit card than the car loan, it is probably a good idea if you can do it to pay off the card
Use your savings to pay off the cc right now (unless it is a 0% introductory rate). Dealers usually want 25% down so pay $3,000 (or $4,000 aka 1/3, if necessary) and borrow the rest. If a bank will not help you, go set up a relationship with a credit union.
yes, if you can get a 7000 car loan
Why are you trying to mix everything up. Just pay off the credit card and buy the vehicle.
That depends. What's the interest rate on the card, and what's the interest rate on the car loan ?
You won't get a car loan for such a small amount. Banks and finance companies don't like small loans on old cars. Besides when you get a car loan, it's only for the cost of the car, not extra that you can use to pay off credit cards or anything else. You need to seriously educate yourself about how car loans and financing work. Right now, you're not to smart about it.
It would be better to cut up the credit card, and save up and pay cash for the car.