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May 27, 2019

5 Tips for Managing Your First Auto Loan

If you have treated yourself to a new (or new-to-you) car and have an auto loan for the first time, you probably want to make sure that you handle your loan correctly. For someone who has never had an auto loan, though, staying on top of the loan can be tough. These tips can make it easy to manage your loan.

1. Go Over All of Your Loan Paperwork

In the excitement of having a new car, you might not be too concerned about reading the paperwork that you get from the bank. However, reading over all of your loan paperwork helps you have a better understanding of your loan, so you should take the time to do so.

2. Be Aware of Your Due Dates

The number one thing that you can do to stay on top of your auto loan is to make sure that you’re fully aware of your due dates. You can mark them on your calendar or store them in your phone so that you don’t forget. After all, if you miss a payment because you forget your due date, you could face late fees or even a repossession.

3. Keep Your Lender Informed

You will need to keep your lender informed of certain things throughout your loan term. If you change your car insurance company, for example, your lender will need to know about it. You will also need to talk with your lender if you move so that you can share your new address, and you’ll need to communicate if you’re having trouble making your payment so that the lender can potentially help you set up a payment arrangement.

4. Sign Up for Automatic Payments

If you can, try signing up for automatic payments. Then, your car payment can be taken out of your bank account without you having to do anything each month, which will help you stay on top of your payments.

5. Determine if Refinancing is for You

Many people maintain the same auto loan until their car is paid off. Some people do find that refinancing their auto loan at some point is a good idea. If you had bad credit when you bought your car, for example, you might have been given a high interest rate. Once your credit has improved, you may qualify for a loan with a lower interest rate. Some people also refinance for things like removing a co-signer’s name or lowering their monthly payment by stretching out the loan over a longer term.

Managing an auto loan isn’t difficult. However, it might take some getting used to. These tips can help you manage your auto loan properly so that you don’t fall behind on your payments or face a repossession.

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