Introduction
Almost everyone needs a car; the convenience that one gets cannot be compared to taking the bus or the train every day. Despite the fact that most people would wish to own a car; not everyone can get their hands on the necessary funds to purchase a vehicle. Most people therefore choose to take up loans without getting enough information. The fact that most people have a credit policy could end up complicating matters. One therefore needs to understand the possibility that car loans are bad.
History
The first reason as to why car loans are bad is the fact that really borrowing money to buy certain items that one can clearly do without is really just not a good idea to begin with. Taking the train might not be such a bad idea; it is cheap and presents no overhead costs. The moment one alights from any form of public transportation, there will be no other cost incurred apart from the fare.
The fact that a person who takes a loan will be required to pay it plus interest goes to prove that car loans are bad. In order to make money in life; a person needs to realize that debt is the number one obstacle. Not getting into a situation of debt in the first place has been and always will be a wise financial decision. A consumer should also understand that failure to pay all the borrowed funds and interests on time serves to spoil one’s credit score.
Features
The inability to pay back loans could be as a result of a number of unforeseen factors. When the loan was taken the consumer could have been enjoying a period of relative financial stability due to a regular income. When the loan needs to be repaid the consumer could have lost the job hence making the process of acquiring funds for repayment a nightmare. This will eventually lead to a bad credit score; another reason that car loans are bad.
Every time a consumer goes to seek a loan, a record is kept of this attempt. The effect this could have on the credit score and eventually show up on the report could be undesirable. Car loans are bad because they could end up hurting the credit worthiness of an individual if they fail to pay back.
When a consumer goes for a car loan it is usually because they have failed to secure the necessary funds for that purpose. There are those consumers who have borrowed a number of times and have failed to repay on time numerous times. Doing this over and over again could injure the credit and therefore end up showing on the credit report; therefore proving that car loans are bad.
Tips and comments
A consumer should therefore understand that car loans are bad if they are taken without proper consideration and discipline. This is because failing to honor payments on time will end up affecting the credit score which would be reflected on the credit report. This can have dire financial repercussions.
