Using a Payday Loan for an Auto Loan


Buying a car is a big step and an investment you will want to spend some time thinking about. If you plan to get a car with some life left in it, you will most likely be looking at newer used cars. But, for most people, that means an auto loan. You might want to think about using a payday loan for your auto loan.

If your credit is sterling, you?ll have no problems getting the best deal on the best auto loan. For most of us, however, our credit rating could use some repair. The lower your credit rating, the higher the interest rate your used car lender will charge you. Seems unfair, but the lender does this because they need to minimize their risk should you be unable to make payments.

There is a solution. If you can put extra money toward your down payment on the car, or add some extra cash to your trade-in if you have another car to trade, you can often get lower interest rates or reduce the principle on the auto loan to a manageable amount.

Most of us with poor credit don?t have extra cash lying around. The trick is this: use a payday loan for your auto loan. Payday loans are short-term loans, usually two weeks in length, that allow you to borrow against your next paycheck. You set up a plan in advance with the lender that allows them to automatically deduct your payments from your checking account when you get paid. Within 24 hours of application, often less, you can have up to $1500 to put toward that new-to-you car.

Payday loans for auto loans require no credit checks and no collateral. All you need is a job making more than $1000 a month or some sort of regular income, like disability, Social Security, a pension, or alimony. You must be 18 years or older and an American citizen. You cannot be active duty military.

There are a few things that might disqualify you. Recent bankruptcy, less than six months at your current job, an income less than $1000 a month, or unpaid payday loans will make it more difficult for you to get the loan. You will also need to have a checking account and lenders will look at how long you have had the account. Your payday lender will be able to tell you if you qualify for a payday loan for your auto loan.

When you apply for an online payday loan, you will need to have your bank routing numbers and account number. Your bank can give you this information if you don?t know where to find it.

It?s easy to apply for a payday loan for your auto loan. Complete the online application and someone will either call you or send you an email. They might want more information, or verification of the information you gave them. In some cases they might ask you to fax a pay stub or a statement of benefits letter or some other proof of income. They will also want the name and contact information for a reference. They will call your references to verify that the reference thinks you are a good risk.

A payday loan for an auto loan has several repayment options. Most people elect to pay the loan in full, plus fees and interest charges, when they get their next paycheck. This is the preferred manner and saves you the most in overall service charges. If you can?t make the full payment on your next payday, you will be offered a chance to extend the loan and pay fees and interest only, rolling the principle into a new loan. Extensions are the most expensive way to go and many states no longer allow them. Again, check with your lender to find out if this is an option in your state.

The final option is to pay your payday loan for your auto loan over time. In this case, you will pay part of the balance plus interest and fees, rolling the remaining balance over into a new loan with another two-week loan period. If you still can?t pay off the loan, you may be able to negotiate another extension. Just make sure you are able to pay your payday loan before your auto loan payments are due so that you aren?t overly stressed financially

Extensions are not automatic, and you must let your lender know you will need one by requesting an extension. Most lenders require a minimum of 48 hours notice and some require more. You will be offered the opportunity to pay the fees and interest and roll the balance into a new loan.

Once you have repaid your loan, you will not be able to apply for another loan for several days. Remember that payday loans are intended to be an extra support in emergencies and for special expenses like getting a payday loan for an auto loan.