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If your credit score is less than perfect, is there any hope of getting a car loan? Car loans are easier to secure when your credit score is in good shape, but that doesn't mean it’s impossible to get a car loan with bad credit.  Here’s what you need to know about credit auto loans in summer 2023.What is considered bad credit? Credit scores are determined based on five different categories. Your Payment History (35%): Do you make your payments on time and in full?  Accounts Owed (30%): How much debt are you in and much credit do you have available to you?Length of Credit History (15%): How long have you had credit available to you?Credit Mix (10%): Do you have a healthy mix of accounts that you balance?New Credit (10%): Is there new credit available to you that is not yet reflected in your score? All of these categories are assessed and you are given a score between 350 and 850. These scores are broken up into five different categories. 800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor credit The better your score is, the more likely you are to be approved for a car loan. As your score drops lower, you will have an increasingly harder time getting approved for a loan of any type.  When it comes to auto loans, a bad score is typically considered to be in the mid 600s and below. What is a bad credit auto loan?A bad credit auto loan is simply a regular auto loan that comes with a higher car loan APR. Higher APRs are offered to offset the risk that a lender is taking by offering a loan to someone with poor credit. Why is the risk higher when lending to someone with poor credit? Let’s consider the factors that make up credit scores again. The most influential factor is your payment history. If you have an inconsistent payment history and miss bills frequently, lenders may not recoup their money easily. Auto loans are secured loans, which means that your car serves as collateral for missed payments. If you stop paying your loan the lender will simply come and take your car as payment to ensure they don't lose money. But this isn’t an easy or cheap thing for them to do. It is much easier for them if you simply pay your bills.  Bad credit loans, also referred to as subprime or second chance loans, have higher APRs and may have higher fines and penalties. Can you finance a car with no credit? Technically it is possible to finance a car with no credit, but you will most likely need a cosigner to help you. You may find a lender out there who will give you a loan with no credit, but they will charge you a much higher interest rate and may require a higher down payment.What do you need to get a bad credit auto loan? If you have a bad credit score and need to get a car loan, you will need to have standard loan documentation but you may need to provide more information than a person with a good credit score.A photo ID. All lenders will require a photo ID when considering a loan application.Proof of income. This is usually required by a lender for any type of loan. Lenders prefer to see a current pay stub, and some lenders may have an issue with income such as disability or SSI.Proof of residence. This is also usually required by a lender for any type of loan. You must have current proof of residence such as a utility bill. A working phone. Bad credit loan lenders may need a landline or contract cell phone from a national service (not a prepaid phone). They need a way to stay in touch with you in case of delinquency.References. Some lenders may require references to vouch for your character. They may request 6-10 references–they can be family, friends, or coworkers–to help substantiate that you are worthy of a loan. They usually cannot reside with you and cannot live with your other references. How to get the best bad credit auto loan. The best way to get a loan when you have bad credit is to improve your credit score. Taking the time to pay off your debts and getting on a schedule with your payments can help you to secure a lower interest loan with less money down and less fees. This is also the case if you are looking to refinance a car loan with bad credit.  But if you need to finance a car immediately and cannot wait until your credit improves, take the following steps to get the best loan. Secure a higher down payment.A higher down payment may help you negotiate a lower interest rate. You may be required to pay a higher down payment either way. Explore your options and get pre approved.Even with a bad credit score there are a lot of lenders out there that provide bad credit auto loans. Do your research and inquire with several lenders before deciding where to apply. Getting pre-approved beforehand will help to ensure that you have some leverage before heading into a dealership. Dealerships can make a lot of money off of you if you don’t have a bottom line when you walk through the door. Taking the time to get pre approved will save you money and frustration. And remember: pre approval is different (and better) than prequalification. Prequalification merely estimates rates while pre approval locks them in for a set time period. Apply for financing during the same 14 day period.Applying for financing (and preapproval) during the same 14 day period will ensure that your credit only takes one hit from your applications. If you spread out your applications too much it will affect your credit score negatively and put you in an even worse spot.  While it’s possible to get financing when you have bad credit it’s a much better idea to take the time to improve your credit score. Your credit score is the most important factor in the car loan APR you will be offered. Well, the most important factor that’s in your control anyway. If you can manage to stave off financing until your credit score improves you will be in a much better financial position. If you have worked to improve your credit score and are ready to refinance, contact Auto Approve today!GET A QUOTE IN 60 SECONDS

Let’s face it: owning a car is expensive. From buying your car to insuring it and paying for gas, the price tag on owning a car is only getting higher. For the first time ever the average annual cost of owning a car broke $10,000 in 2022 according to the Bureau of Transportation Statistics. This represents nearly a 20% price increase in car ownership over the past decade. But it is more expensive to own a car in some places than others, and there are a lot of reasons for this variance.These are the most expensive states to own a car.What costs are associated with having a car?When we talk about the costs of car ownership we are talking about a lot of different factors. The car’s priceWhen we think of car ownership, the main cost we think about is the car itself. Car payments make up a large part of our monthly transportation expenses. These payments are based on the total price of the car and the interest rate that you are offered. InsuranceAuto insurance is required in almost every state. The specific requirements and the cost of insurance vary greatly depending on where you live. A big part of this difference has to do with the likelihood of accidents. Areas with high populations will have higher rates as the density makes the likelihood of accidents increase. Other factors include:Crime rateOccurrence of natural disasters, such as tornadoes and hurricanesCost of livingThe other major factor that varies by state is what coverage is required. Almost all states require liability coverage, but other coverage requirements such as uninsured/underinsured motorist (UM/UIM) coverage and personal injury protection are only required by some states. This can greatly affect the insurance premium you have to pay.Maine offers the lowest rates in the country with an average premium of $696 according to the Insurance Information Institute. Compared to Michigan, which has the highest premiums in the country at $3,785 per year, this is a huge difference.GasThe price of gas is another major variable from state to state. Gas price varies for two main reasons: different state tax rates and the proximity to oil refineries and pipelines. Gas prices change often and are one of the most variable expenses for a driver. According to AAA the average driver paid $.18 a mile for gas in 2022, totalling about $2700 per year. The cost of gas however is very dependent on the type of car you drive and how often you drive.Mississippi, Louisiana, and Tennessee have the lowest gas prices in the country in 2023 while Washington, California, and Hawaii have the highest gas prices.Maintenance and repairsMaintenance and repairs are inevitable costs of car ownership. Maintenance such as oil changes, tune ups, and new tires can add up to a lot of money every year. For a new car AAA estimates that owners spend about $121 per month on maintenance and repairs. Registration, fees, and taxesRegistration, fees, and taxes vary significantly from state to state. The average car owner spent $675 in 2022 to legally drive their car according to AAA. Registration fees are lowest in Arizona, Mississippi, and Nebraska, all of which charge less than $15 to register a car. The highest registration fees belong to North Dakota ($274), Montana ($225), and Florida ($225).Fees associated with buying a new car vary from state to state and even from dealership to dealership. These fees may include origination fees, destination charges, advertising fees, and more. On average Oregon has the lowest fees when buying a new car, with the average buyer spending about $130 in extra fees.State tax rates vary widely, with Alaska, Delaware, Montana, New Hampshire, and Oregon all boasting 0% sales tax, while California has the highest state sales tax rate at 7.25%.Are car prices different in each state?New cars have similar prices from state to state but the registration and taxes will vary significantly. The price of used cars however can vary significantly from state to state based on a number of factors such as supply and demand and registration requirements. What states is it most expensive to own a car in?So which states have the highest cost of car ownership? According to a March 2023 study from Forbes, the following states have the highest and lowest cost of car ownership. Forbes looked at gas prices, car repair costs, insurance rates and monthly auto loan payments to determine their rankings.California and Nevada have the highest cost of car ownership. California has the second highest price of gasoline ($4.76 per gallon), the third highest cost for repairs and maintenance ($415.66), and has the eleventh highest cost for full coverage insurance. Nevada has the third price of gasoline ($4.24 per gallon) and has the sixth highest cost for full coverage insurance ($3,342 annually). Colorado, Florida, and Alaska are next in line as the most expensive states for car ownership. Ohio has the lowest cost of car ownership.Ohio has the lowest cost of car ownership in the United States. With an average annual insurance premium of  $1,112, average car payments of $500, and an average gas price of $3.17 per gallon, it’s the most affordable state to own a car.  Iowa, Wisconsin, New Hampshire, and Maine round out the list of the least expensive states for car ownership. How can I reduce the cost of car ownership?If you live in a state where it is expensive to own a car, you may be wondering how you can reduce the cost of owning a car. While you could move to Ohio or Iowa, that’s probably not a realistic option for most. But the good news is there are a number of steps you can take to reduce the cost of owning a car.  Cut down on gas usage.One of the biggest things that you have control over at any given time is the amount that you drive. While you may have a commute that you cannot control, you can cut down on unnecessary trips by combining errands, carpooling when possible, and walking or riding your bike if that is an option.  Shop around for insurance.You can change your car insurance whenever you want, not just when your policy is up for renewal. It’s worth the effort to look around and see what other companies may offer competitive coverage in your area. Contacting your existing company and inquiring about discounts and promotions may also help you save some money on insurance.   Do your research when buying a new car.When you buy a new car, consider all of the costs that you will have to pay. Selecting a car that is reliable and does not need as much maintenance can save you a lot of money and hassle. A car with good gas mileage will also help you to save thousands every year if you are a high mileage driver.Negotiate fees and APR when buying a new car.When you are buying a new car you should also shop around for the best car loan possible. Comparing APRs and fees across lenders and dealerships will be more work for you but it will result in big savings. When you close, be sure to negotiate the dealer fees. Some fees can be reduced by the dealer while others are mandatory, but negotiating will help you to keep your overall car cost as low as possible.Refinance your car loan.If you already bought your car, you may be wondering how you can reduce the cost of car ownership. The good news is that you are not tied to your lender until your car is paid off. Refinancing your loan will help you to reduce the APR that you are paying, and this can result in thousands of dollars in savings every year. Refinancing is simple when you use a company that specializes in auto loan refinance. Auto Approve can help you determine which lender is right for you and help you to negotiate the best APR possible .Refinancing your car loan will be most effective when your finances are in good shape. Taking the time to work on your credit score and pay down debts will help you to secure the best car loan terms.Those are the most expensive states to own a car.Unless moving states is in the cards for you, you will have to resort to other ways to reduce the cost of car ownership. Buying a reputable and gas-conscious car, cutting back on gas use, and refinancing your car loan are a few of the most effective ways to reduce the cost of owning a car, no matter where you live.If you are paying too much on your car loan, consider refinancing your car loan with Auto Approve. It’s free to get started and couldn’t be easier. So what are you waiting for? GET A QUOTE IN 60 SECONDS

For the first time in almost a year and a half the Fed decided to not raise interest rates. In June 2023 they instead kept the prime interest rates between 5% and 5.25%. But what does that mean for our personal finances, and what moves should we be making in the summer of 2023?Here are the 8 money moves you should be making in summer 2023.What is going on with the economy in 2023?The economy has been through a tumultuous time in the past few years. Shutdowns from 2020 have had lasting implications for the global economy, and inflation has been a major side effect. In order to combat the inflation that has run rampant the past few years the Fed has been raising interest rates over the past year and a half to ease inflationary pressures and get the economy to a more stable point. But increasing interest rates have had other effects on our economy besides combating inflation. Increased rates means that borrowing money is more expensive so less people will borrow. This reduces the stress on banks. It also means that the stock market is more volatile as the economy becomes more and more uncertain. There is also a higher chance of recession when the rates increase. For the first time in a year and a half the Fed decided to not raise interest rates. This means that the prime rate is hovering between 5% and 5.25%. While it is good news for many that the prime rate didn’t increase more, the rate is still at its highest point in 16 years. Some of the effects include:Highest rates for home equity lines of credit in two decades.Credit card rates hit record highs for 12 weeks in a row.Loan delinquency rates have increased 54% since last year.We are clearly feeling this in our wallets, and a number of bank failures this year have proven that rising rates can have severe consequences.But increasing rates have a flipside too. As the cost of borrowing increases the yield on savings interest increases as well. It is now easy to find a low risk savings account with an interest rate that outpaces inflation.Is money safe in banks 2023?With the failures of three banks this year–Silicon Valley Bank, Signature Bank, and First Republic Bank–there is a lot of anxiety over whether or not our money is safe in banks. And the answer is yes, for the most part. Banks are insured by the FDIC while credit unions are insured by NCUA. This means that any funds you have invested up to $250,000 ($500,000 for joint accounts) will be safe in a bank. The FDIC insures the following assets:Checking accountsNegotiable Order of Withdrawal (NOW) accountsSavings accountsMoney Market Deposit Accounts (MMDAs)Certificates of Deposit (CDs)Cashier's checksMoney ordersOther official items issued by an insured bank It does not insure stocks, bonds, mutual funds, safety deposit boxes, US Treasury bills, or crypto currency.  If there is a bank failure the FDIC usually has money refunded to individuals within a few days of the bank failure.What should I do with my money in 2023?The finance world seems a little shaky (to say the least), so what should we do with our money to protect ourselves and our futures?Move #1: Pay off high interest debt.As interest rates keep rising it’s more important than ever to try to pay down your balances. High interest debt is usually from credit card debt, and this type of debt has a way of snowballing if you are not proactive about getting it paid down. You want to get to a point where you can pay off your credit card in full every month. Failing to do so will cost you a lot of extra money every month. Move #2: Talk to your credit card company.It’s a good idea to talk to your credit company even if your account is in good standing. If your credit score has increased since you initially opened your credit card, your credit card company might be inclined to give you a better APR. Most people don’t think to talk to their credit card companies, but open communication can help you out a great deal. If the rates are going to increase, you may be able to have your rate stay the same. If your rate is going to increase, companies are required to give you 45 days notice.Move #3: Shop around for loans.It’s not impossible to get a loan right now, it just means that you may be paying more. If you are looking for a mortgage or car loan, you can find rates that may still work for you but you need to shop around and compare to get competitive loans. Increasing your credit score will help you to get the best financing rates possible.  Move #4: Look at your existing loans.While you may think that refinancing a loan in 2023 is out of the question, you may be able to find a car loan or mortgage that has better terms than your original loan. Rates depend on a lot of factors such as your payment history, your credit utilization ratio, and your income–rates do not depend solely on the market rates set by the Fed. Summer 2023 is a great time to look at all of your existing loans and determine how each loan is working out for you. It doesn’t cost you a thing to get a free car loan refinancing quote and it could actually end up saving you a lot of money in the long run.Move #5: Keep saving.Saving accounts yields are the highest they have been in a long time and are outpacing inflation, which makes it a perfect time to look around and find a savings account that will make you money. These are incredibly low risk accounts which makes them perfect places to set up emergency funds. Experts urge people to save now as rates are high while inflation is lowering, so it is the perfect time to grow your savings. If you have some money that you do not need access to for a while, opening a long term CD might be a good option for you. This will allow you to take advantage of these high yields for a while. A 2-5 year CD means that you can profit from these yields even when the rates eventually decrease.Move #6: Invest smartly.When people get scared to spend and invest, the economy gets worse and worse. It becomes a self fulfilling prophecy that the economy will tailspin. Investments are risky by design, but if you are a long term investor with a diverse portfolio, a bump like this shouldn’t throw your finances into total disarray. This can actually be a great time to start long term investing if you have some extra money (don’t invest if you don’t already have a savings nest egg) and can wait it out for some returns. Move #7: Map out for the rest of the year.The summer is a great time to reset before school starts up again and we slide into the holiday season. Use this time to start setting aside money for school and holiday shopping before time gets away from you and you have to scramble to make ends meet.Move #8: Prepare mentally and financially for a recession.A recession is still very much possible as we enter into the second half of 2023. Many experts think there is a 60-65% chance that we will hit a recession by the end of the year. A recession occurs when there is a contraction of the economy, where there is less production and less consumption. There is typically a higher unemployment level during this period. So what can you do to prepare for a recession? There are a few steps you can take to put yourself in a better position:Make sure you have an emergency fund.Have a plan in the case that you lose your job.Pay down high interest debts that are increasing your monthly payments.If you are struggling for extra cash to set aside consider working a second job or getting a side hustle.  Getting yourself in a good financial situation in general is your best bet to prepare for a recession. Recessions cause uncertainty, so preparing for the unexpected is really all you can do.Those are the finance moves you should make in summer 2023. High rates mean two things: you need to pay down your high interest debts and you need to keep saving. Taking a good look at your budget and cutting costs where possible is the best way to do both of these things. If your credit score has improved since your initial financing you still may be able to find a better car loan interest rate in this economic climate. Contact Auto Approve today to find out how much you could be saving! GET A QUOTE IN 60 SECONDS

You’ve always dreamed of owning a motorcycle, but maybe you’ve never exactly dreamed of having a motorcycle financing plan. Making the jump and finally buying your first motorcycle (or second, or sixth) is exciting, and if you have the extra cash every month to do it, then why not? The good news is that getting a motorcycle loan isn’t difficult as long as you have the right qualifications. Here’s how you can get a motorcycle loan and finally get the bike of your dreams.Is it harder to get a motorcycle loan?A common misconception is that it is harder to get a motorcycle loan than it is to get a regular auto loan. But it is actually not any harder to qualify for a motorcycle loan than it is for an auto loan. In fact, motorcycle loans are typically for less money since motorcycles tend to be cheaper than cars, which means it may be easier for you to meet the financing requirements. Qualifying for a motorcycle loan is similar to qualifying for a regular automobile loan. You will need to have the following to be able to motorcycle financing:A good credit scoreA good debt to income ratioA down paymentProof of employmentProof of residence As long as you can make a down payment and are in a relatively stable financial position, secring motorcycle financing should be possible.Where can I finance a motorcycle?You can get a motorcycle loan at a number of different lending institutions. Traditional banks, online lenders, credit unions, and dealerships all tend to offer motorcycle financing. Traditional banks offer names that you can trust, so many people feel comfortable going with a recognizable bank. Online lenders can often beat the rates of traditional banks because they lack a lot of the overhead of traditional banks, but they may not offer the same sense of security. You can usually find the best rates at credit unions, but these institutions tend to have membership requirements that you may not meet. Dealerships will often offer financing even if you aren’t in the best financial position, but their rates tend to be higher. If you do not want to try traditional financing you can look into another type of financing, such as peer to peer financing or taking out a home equity line of credit. But these can be riskier options. You can also consider leasing a motorcycle instead of buying one. It is usually easier to get approved for a lease and your monthly payments will be significantly lower than financing payments.How much should I put down on a motorcycle loan?Motorcycle financing is similar to regular automobile financing, and you should treat the down payment as such. We recommend putting at least 10% down, but putting 20% down if you can will help you in a few ways. A larger down payment will mean that your principal is lower and therefore your monthly payments will be lower. A large down payment can also help your loan from becoming underwater, which means that you owe more money on your bike than it is worth. Underwater loans occur when depreciation outpaces how quickly you are able to pay off your loan, so it’s important to try to stay on top of (or ahead of) your financing payments.How many months is the average motorcycle loan?Motorcycle loans are typically anywhere from 12 to 60 months in length. A longer repayment period means smaller monthly payments, but it also means that you will be paying off your loan for a longer period of time. That means you will pay more in interest over the life of your loan. It’s generally recommended to keep your repayment period shorter so that you can save money in interest. If you need an extremely long repayment period to afford your monthly payments, chances are you probably don’t have enough money to get a bike in the first place. A 24-36 month loan is usually a good length for a motorcycle loan repayment plan that will allow you to have manageable monthly payments while staying well ahead of depreciation.How can I get a motorcycle loan?Getting a motorcycle loan is pretty straightforward. Follow the steps below to get the best motorcycle loan possible. Step 1. Prepare your finances.The first step to getting any loan is to prepare your finances. You want to ensure that your credit score is in good shape and your debt to income ratio is good. This will help you to get the best motorcycle loan APR possible. Paying down balances that have a high credit utilization ratio will help your credit immensely, as will requesting higher credit limits.  The APR you are offered is based on a number of factors including the prevailing market rates and repayment plan you select. But the biggest factor that you can control is your credit score. Request a copy of your credit report so that you can review it thoroughly. Are there any mistakes in your payment history? Are all of your debts accurate? Are there any negative events that shouldn’t be listed on your report anymore? Taking the time to review all of this can save you a lot of money in the long run. Step 2. Decide on a budget.The next step is to take a close look at your overall budget to determine how much you can afford to spend on a motorcycle. What type of monthly payments can you afford? An online calculator can help you figure out what type of loan you can afford, which will help you determine what type of bike you can afford.  If you have a car loan you may want to consider refinancing your loan. Chances are you are overpaying and if you refinance your loan with Auto Approve you can save a lot of money.  Step 3. Find a motorcycle.Once you have determined how much you can spend you can determine which bike is right for you. There are a lot of different types of bike on the market, so the right bike will depend on your skill level, how you intend to use your bike, and your budget. Check out our guide to buying a beginners bike to help narrow down your options. Step 4. Research lenders and apply.Once you have selected your bike and know your budget you can begin applying for a motorcycle loan. We recommend applying with 3-5 different lenders to give you the best chance of finding a low motorcycle loan APR. Be sure to consider customer reviews when selecting which lenders. Consulting the Better Business Bureau and TrustPilot can help you find out if any lenders have major complaints or downfalls. You want to apply to all of your loans at the same time (during the same 14 day window) so that they will all count as one hit on your credit score. If you space out your applications it will have a negative effect on your credit. When you get all of your loan offers in be sure to consider the following:The APR offeredThe loan terms and conditions, including prepayment penalties.Customer satisfaction. Step 5. Sign and drive.Once you select the loan that is right for you the lender will send payment to the dealership and you can take your new bike home once the payment is complete. You will need to ensure that the motorcycle is registered and insured per your states requirements. Can I refinance a motorcycle loan? Sometimes people end up in bad loan situations. There are a number of reasons why a loan might not be working for you anymore:Your interest rate is too high.Your repayment period is too long and you are paying too much in interest.Your repayment period is too short and you are having trouble making your monthly payments.You are unhappy with your lender.You want to add or remove a cosigner. Whatever your reason is for wanting to refinance, Auto Approve can help. Auto Approve refinances motorcycle loans all the time and can even help you add a motorcycle protection plan onto your loan so that you can get some more peace of mind. Protection plans from Auto Approve come with the following:Your choice of certified mechanic for repairs.24/7 roadside assistanceRental car reimbursementCourtesy towingAnd more Just because you end up in a bad financing relationship doesn’t mean you have to stay in a bad financing relationship. Let Auto Approve help you break up with your current lender and save thousands.That’s how you can get a motorcycle loan (and refinance your existing motorcycle loan). Getting a motorcycle loan isn’t complicated, but it does involve research, preparation, and lots of thought. If you have a motorcycle loan that you are unhappy with, contact Auto Approve today! Our agents can help you to get a new loan that works for you and your budget. So don’t wait, get in touch today!GET A QUOTE IN 60 SECONDS

We all like to think that we are good drivers. Of course we all have the occasional lapse in judgment or close call, but we at least try to be good drivers, right? But there are some drivers out there that are breaking the rules of driving every day. So what are the most common–and most dangerous–rules that bad drivers break?Here are the ten most common driving rules that bad drivers break.#1. Not wearing a seatbelt. In today’s day and age there is no excuse to not wear a seatbelt. Seat belts have been proven time and time again to save lives and minimize bodily damage in the case of an accident. According to a study by the CDC seatbelts reduce the risk of death by 45% and reduce the risk of serious injury by 50%. In SUVs and minivans their effectiveness only increases, with seatbelts reducing the risk of a fatal injury by 60 percent and reducing critical injury by 65 percent. Experts estimate that seatbelts save nearly 15,000 lives every year.Despite all of this data, one in ten people do not wear a seatbelt when they are in the front seat of a car. While seatbelts are not failproof, they are our best chance for survival in case of an accident. By breaking this driving rule you are not only putting yourself at risk for a ticket, but you are putting yourself in actual danger.#2. Distracted driving. Distracted driving comes in all forms. Distracted driving is defined by the National Highway Traffic Safety Administration as “any activity that diverts attention from driving, including talking or texting on your phone, eating and drinking, talking to people in your vehicle, fiddling with the stereo, entertainment or navigation system — anything that takes your attention away from the task of safe driving.” While it is only second nature to do some of these things, distracted driving is incredibly dangerous and puts everyone on the road at risk, including you and your passengers. Roughly 3,000 people die every year in accidents caused by distracted driving, accounting for almost 10% of fatal motor vehicle accidents in the United States.  Talking and texting is the most common reason for distracted driving. The NHTSA estimates that cell phones are involved in 26% of all car crashes. Stowing your phone away to avoid the temptation will help ensure that you are focused while driving.#3. Not obeying the right of way laws. Right of way laws are in place to ensure that people will safely and efficiently get through an intersection. For the most part these laws are uncomplicated and rely on common sense. Yet we have all ended up at an intersection where the laws were not followed. This results in confusion, slowed traffic, and possibly even an accident. But it’s important to note that even if you have the right of way, you should still drive defensively and cautiously. A right of way does not make you immune to accidents and we should all work together on the road to stay safe.#4. Driving under the influence. Most of us know to not drive when we feel tipsy, but some ignore this rule blatantly. The legal limit for driving in most states is a blood alcohol content of .08 grams of alcohol per deciliter (g/dL). Driving with a BAC above this can carry serious penalties and is dangerous for everyone on the road. In fact 32 people are killed every day in motor vehicle accidents involving alcohol in the United States. If you ask “is it safe to have one drink and drive”, the answer is actually no. You can get a ticket even if you are under the legal limit if the police think that your judgment is impaired.  Driving under the influence doesn’t just apply to alcohol either. “Influence” can mean marijuana, illicit substances, and even prescription medication. The bottom line is that if something can alter your state of mind–intentionally or unintentionally–you need to avoid it if you are getting behind the wheel. #5. Running through yellow lights. A yellow light does not mean “speed up and get through the intersection before it turns red”. A yellow light indicates that a red light is coming and you should prepare to stop. The only time that you should not stop for yellow light is if there is not enough time to stop safely. Busy intersections that have a lot of traffic, pedestrians, and bikes can be a dangerous place when everyone is trying to make it through the intersection at the last minute. So unless you cannot stop in time, you should not race through a yellow light. #6. Not using a blinker.Blinkers are designed to alert other people on the road of your intentions while driving. More and more people are failing to use their blinkers to communicate, causing confusion and accidents. You should use a blinker in any of the following situations:Turning at an intersection.Turning into a driveway or parking lot.Changing lanes.Pulling over on the side of the road.Parking on the side of the street.Changing lanes.Passing another vehicle.Merging with traffic.Leaving a roundabout. The more people use blinkers, the safer we will all be. You should use blinkers even if no other cars are around as you should make is a habit to use them whenever you are turning.#7. Not obeying the speed limits. Speed limits are put in place for a reason. State and local authorities look at roads and use the Manual on Uniform Traffic Control Devices (MUTCD) to determine what a safe speed is for a given section of road. In general the following things are considered when determining a speed limit:Prevailing speeds as determined by traffic engineering measurements.History of accidents.Highway, traffic, and road conditions that may not be obvious to drivers.Residential density.Pedestrian and bicyclist safety. Speed limits are pretty cut and dry: if the speed limit is 50 and you are driving at 51, you are breaking the law. While most cops won’t bust you for speeding one mile an hour over the limit, they have the right to. But while you may be able to go slightly over the limit without getting into trouble, it’s important to remember that speed limits are put in place for a reason. Maybe there’s a lot of foot traffic that makes driving fast dangerous, or maybe there are twists and turns on a road that come up abruptly. No matter what the reason is, speed limits will keep you–and everyone else on the road–safe.#8. Tailgating. Of all of the irritating driving habits that bad drivers put on display, tailgating is perhaps the most annoying of them all. It is an aggressive tactic that some bad drivers use to pressure drivers in front of them to either go faster or move over. But in reality it creates a very dangerous situation where the driver in front gets distracted or feels frightened. The car that is tailgating will not have sufficient time or space to stop in the case of an accident. Accidents caused by tailgating are incredibly dangerous and can result in neck and back injuries, traumatic brain injury, and even death. #9. Rubbernecking. Rubbernecking is when a driver takes their eyes off of the road to look at something such as an accident or arrest. Rubbernecking can severely disrupt traffic patterns and cause accidents. While curiosity is human nature, rubbernecking is just another form of distracted driving and can cause serious accidents and even death. #10. Merging incorrectly. Merging is an essential part of driving. While some merges are easier than others, it is imperative that everyone safely merges with traffic to avoid accidents and traffic disruptions. Here’s how to properly merge to keep traffic moving safely:Adjust your speed to match the flow of traffic.Yield to drivers on the highway but avoid stopping if possible.Find a gap in traffic to merge. Use your turn signals early.Wait for the solid line to end before merging.  Coming to a full stop while trying to merge, hanging out in another car’s blind spot, not using turn signals, and not keeping an appropriate speed will all cause issues when you merge. Those are 10 rules that bad drivers break all the time.While everyone has lapses in judgment from time to time, we all need to do our best to keep these lapses to a minimum. In general we need to simply pay attention: pay attention to the road, to the speed limit, to the laws, and to other drivers on the road. Taking these measures can help ensure that we all get from point A to point B without a problem and without an accident. Let’s agree to not break driving rules–and to not break the bank with our car payments. If you are overpaying on your car payment every month, contact Auto Approve to see how we can help! Drivers can save hundreds of dollars a year (if not thousands) by refinancing their loan with Auto Approve. So don’t wait!GET A QUOTE IN 60 SECONDS

If you are a contract worker, you may not have the same proof of income and employment most people have. This can make financing a car as a self employed person seem more difficult. But if you are prepared and have the right information you can still get a car loan as long as you meet the lender’s requirements.Here’s how to get a car loan as a contract worker.What is a 1099 worker? A 1099 worker, or independent contractor, is a worker who is not employed as a full time employee by a company but instead works for them on a contract basis. Employers will pay them directly and will not through the company payroll system. This means that taxes are not deducted from the contractor’s pay. There are pros and cons to being a contractor and you typically have much more flexibility than you would as a full time worker. But one significant disadvantage of contract work is that it is not considered to be as stable as full time employment. Contract income can fluctuate greatly from month to month as well, which can make lending a little riskier for a financial institution.Can I buy a car if I’m self-employed?While you may be considered a slightly riskier loan candidate, it is absolutely possible to finance a car as a 1099 worker. While lending requirements vary from lender to lender, in general you should be able to finance a car if you meet the following criteria:Have a monthly income of at least $1,500 before taxes.Can make a down payment of at least $1,000 or 10% of the vehicle’s selling price. Additionally, a good credit score and good debt-to income ratio will help you to secure a loan that has a good car loan interest rate..What do I need to prove income as a 1099 worker? As a 1099 worker you do not have paycheck stubs that are typically required by lenders. These stubs prove that you not only have a steady job, but that you make enough money to afford the car you are buying. So what can you show a potential lender to prove your income? Your Tax ReturnYour annual tax return (form 1040) is the most straightforward and legitimate way to prove that you have steady income. Employers are only required to file a 1099 for your work if they have paid you more than $600, which may be an issue if you do a lot of small jobs for different companies. But in general for most contractors a form 1040 is your best bet to prove income and employment. Your 1099 FormsIf you do not have your tax form on hand you can show lenders your 1099 forms. These forms are sent to you yearly by any company that has paid you over $600. Bank StatementsIf you do not have a 1099 from a company then a bank statement is the best way to prove your income to a lender. If you have separate accounts for your business and personal life this will be easy to provide, but if they are tangled up you will need to go through and sort out which expenses are personal and which are business.  A Pay StubYou can actually create a pay stub for yourself that will count as proof of income, so long as you include the following information:Name and address of the company you provided services for.Your job title.Number of hours worked during the pay period.Your gross pay. This is the total amount received for your work.Deductions. You will need to calculate and deduct the following from your pay stub: state federal taxes, state and local taxes, social security, and Medicare.Your net pay. This is the final amount you earned after deductions.Employment Verification LettersIf you have worked with a particular employer for a while it might be a good idea to ask them to write you an employer verification letter. This letter will show that you make money and have a good relationship and history with your employer.How to get a car loan as a 1099 worker. Getting a car loan as a 1099 worker is almost identical to the process for a W2 worker. As long as you are organized and have your proof of income ready you should not have a problem applying for a car loan. The basic steps are the same:  Gather your documents.Compare lenders.Apply.Sign and Drive. But as we mentioned before, 1099 workers are considered riskier lenders than regularly employed people. Here are a few tips on how to get the best car loan rate when buying a new car. Tip #1. Make a larger down payment if possible.We always recommend a down payment when buying a car. A down payment of at least 10% (but preferably 20%) will help keep your monthly loan payments to a more manageable amount, get you a better car loan interest rate, and will help to make sure your loan doesn’t end up underwater. But making an even larger down payment will help you even more. Your interest rate will decrease as your down payment increases as the lender becomes more and more confident in your repayment. Tip #2. Shop around for a car loan.Again, we always recommend this, but lender requirements for 1099 workers will vary greatly from bank to bank so it’s even more important to shop around when you are a contractor. While you won’t find loans that are specifically designed for 1099 workers, you will find that certain lenders will work with you more than others. Tip #3. Get your credit in top shape before applying. A good credit score will prove to the lender that you are responsible with your money and have a history of paying your bills on time. Taking the time to pay down high interest debts, enrolling in autopay to make sure you never miss a payment, and requesting higher limits on your accounts will all help to boost your credit score and earn you a better car loan interest rate. That’s how to get a car loan as a 1099 worker.Contract work offers a lot of control and flexibility, but there are certain disadvantages that come with it. Proving employment can take a little more work, but if you are organized and keep track of your income and expenses you should have no problem securing a car loan. If you are overpaying on your car loan consider refinancing with Auto Approve. Get in touch today to find out home much money you could be saving! GET A QUOTE IN 60 SECONDS

There are a number of reasons why a person may want to change their insurance carrier. Maybe they are unhappy with the coverage or the customer service, or maybe they just found a better premium elsewhere.  Here’s how you can change your car insurance. How often should you change car insurance? You should get in the routine of comparing car insurance premiums about once a year. This will help ensure that you are always getting a good premium. You do not need to wait until your policy ends to switch. You should actually make sure that there is some overlap so that you do not risk being without insurance, even for a day. A lapse in insurance can open you up to a lot of risk. While you shouldn’t necessarily change policies every year, a yearly check in will help to make sure the premiums are staying competitive.When should I change my car insurance?There are a number of things that may happen in your life that will tell you that it is time to change insurance.  You moved.If you move to a different zip code, chances are your premium will be affected. You need to notify your insurance company when you move, even if it is just a temporary move. Your location is a key factor when determining premiums. So when you move it is a good idea to look around the area and see if you can find a better premium elsewhere. Your premium has increased.When it’s time for your yearly renewal, you may see an increase in premium. This is why we recommend comparing prices every year. If you notice an increase there is a good chance you may be able to find a better premium elsewhere. You have a major change in your life.Because insurance premiums are calculated based on a number of factors, many life changes can affect how much you pay. Getting married, starting a new job, and buying a new home may all affect your insurance premium. Looking around and comparing coverage can help ensure you don’t pay too much. Your child begins driving.When your child finally gets on the road, it is scary for a lot of reasons. And one of those reasons is the increase in insurance premiums. Inexperienced drivers tend to have higher premiums because they are more of a risk on the road than other more experienced drivers. So when it’s time to get them insured be sure to look around and compare your options. Some insurance companies cater more to younger drivers and have better good student discounts than others.  You buy a new car or get an additional car.Insurance premiums depend largely on the vehicle you drive as well. A new car can change your premium significantly so it’s best to check in and compare whenever you get a new vehicle.What are some car insurance terms I should know? Before we get into changing policies, let’s go over some of the terms you should know when it comes to car insurance. Automobile Insurance: Insurance that protects against losses involving automobiles. Car insurance policies vary greatly from policy to policy and company to company. The coverage will depend on the state requirements and the wants of the policy holder. Liability for bodily injury and property damage, medical payments, uninsured motorist, comprehensive, and collision are some of the common coverages of car insurance. Comprehensive Coverage: Pays for damage to your car caused by a reason other than collision. Fire, vandalism, flooding, etc all fall under this coverage.  Collision: Pays for damage to your car caused by contact with another vehicle or with another object (tree, sign, structure, person, etc).  Deductible:  The amount that the policyholder is responsible to pay before the insurance begins to pay (applies to comprehensive or collision coverage only). Liability Insurance: Coverage for a policyholder's liability if they cause an accident that results in injuries and/or damage to other persons or property.  Loan Gap Coverage: This covers the difference between the value of the car and the amount a person owes to a lender if the car is financed.  Medical Payments Coverage: Covers medical costs resulting from an auto accident for anyone in your car (you and your passengers) regardless of fault.   Personal Injury Protection: Covers medical treatment, lost wages, or other accident–related expenses.  Policy: An insurance contract between the insurer and the insured. Premium: The price of insurance policy, typically paid every year. Surcharge:  An extra charge added onto the premium by an insurance company. This usually happens when there is a moving violation or at-fault accident.  Uninsured Motorist Coverage: Provides coverage for a policyholder when there is a collision with a driver who does not have insurance (or sufficient liability limits) to pay for damages.How to change your car insurance.When it’s time to change your insurance policy you can follow these simple steps.  Compare policies.When you look at insurance policies there are a number of things that you need to compare. First things first, be sure that you enter accurate vehicle information when comparing policies. A VIN number will help ensure that the policies are accurate. Be sure to look at the following:Coverages. Look at what is specifically covered under each policy. Do they have the same coverages (collision, medical, uninsured, etc)?Deductibles. You will have a choice of deductibles which will affect the premiums you are offered. Making sure that you have the same (or very similar deductibles) will help you compare the policies more accurately. Liability limits. You will also need to compare the liability limits to ensure that the policies are covering similar things. Compare insurance companies.Additionally, think about the insurance company itself and not just the policy. Are the customer satisfaction ratings high? Do they pay out claims or do people seem unhappy with how payouts work? Select your policy and avoid a gap.When you find the policy that is right for you, be sure to start your new policy before canceling your old one. Avoiding a gap in coverage is very important. Your new company is typically not allowed to cancel on your behalf, so it will be up to you to cancel it.  Cancel your old policy. When you call to cancel your old insurance company may require proof of new insurance. They will then cancel your policy and refund you any money that remains on your premium. (If you are only 6 months into your 12 month policy, they will refund you half of your premium minus any cancellation fees).That’s how you change insurance companies.Changing insurance companies can save you a lot of money, and so can refinancing your car loan. Contact Auto Approve today for your free quote!GET A QUOTE IN 60 SECONDS

We drive all of the time, and we think we know the rules, right? But it turns out there are actually a lot of rules out there that not everyone knows (and that many of us break all of the time!) Here are 15 things that are illegal to do while driving (that a lot of us actually do).1 - Using your fog lights when the weather is clear.A lot of people like to keep their fog lights on at all times, but this is actually illegal to do in many states and can result in a fine if a cop chooses to pull you over. There are 26 states where this is illegal including California, Texas, and Virginia. 2 - Not moving over in an emergency situation.We’ve all seen an accident on the side of the road with emergency vehicles. The safest thing you can do is pass by one lane over to give ample space for emergency workers. If you fail to move over one lane it is illegal in 43 states under “Move Over” laws. Gawking and getting in the way can result in additional accidents.  3 - Using a cellphone.We know that it’s illegal to make calls while holding the phone up to your ear. But it’s illegal to handle your cellphone at all while driving, even if you are just looking at directions. Mounting your phone to your dash will help you avoid handling your phone and becoming distracted.  4 - Driving with your hazards on.When it’s raining many people drive with their hazards on to signal to other drivers that they are going slower. But in many states this is illegal. Think of it this way: when it’s raining you have poor visibility and you may see a car pulled over with their hazards on. You go to approach and pass them, only to find out they are actually driving. This can create a dangerous situation. Hazards are meant to signal that you are pulled over, not that you are merely driving slow. It’s illegal in many states including New York and North Carolina.5 - Driving with a cracked windshield.A cracked windshield might seem like a vanity issue. After all, if it's still intact it’s still protecting you right? But driving with a cracked windshield is incredibly dangerous. The glass is weakened significantly and any number of small incidents could cause a bigger problem. Laws vary by state, but most states agree that once it starts affecting your field of vision it is a legal matter.6- Speeding past a funeral procession.Funeral processions have the right of way in at least 15 states, which means they do not have to stop at red lights once the lead car has passed through safely. While you do not need to pull over (although it is the polite thing to do), you can absolutely not try to get around them or ride on the coattails of the procession. This law will vary state by state but if you are unsure, play it safe and hang back until the procession is over.7 - Blasting your music loud.If you are a fan of blasting your music as loud as you want, you may be considered a nuisance in the eyes of the law. There is no federal law that dictates how loud you can play your music, but in many states if your music is “clearly audible” at 25 feet from your vehicle you can be issued a fine.8 - Driving without your headlights on.If it’s getting dark and you can still see clearly, you may not feel the need to turn on your headlights–or maybe you just don’t remember sometimes. But either way driving without your headlights on can get you a fine in most states. The specific laws will vary, but in general if it is getting dark out you are required to have your headlights on.9 - Driving too slowly.There are speed limits on every road, we all know. But most roads don’t have minimums posted. It doesn’t really matter though; if you are driving slow enough that it is deemed to be disruptive you can be issued a ticket.10 - Driving while tired.Many of us have driven tired, whether it was from driving through the night to get to a vacation destination, or just driving home from work after staying late. If you are feeling sleepy or driving through the night, you may think that your tiredness only affects you. But driving while sleepy is dangerous and can lead to reckless driving. In New Jersey the famous “Maggie’s Law” was passed after a 20 year old woman was killed in a head on collision caused by a man who was up for 30 hours. The law makes it a criminal offense to drive while fatigued, and if an accident results from your actions you can be charged with vehicular homicide.11 - Driving slow in the left lane.The left lane is for driving faster and for passing (although it is NOT for speeding).  If you are cruising along in the left lane driving under the speed limit, you are most definitely creating an unsafe driving environment. If you prefer to take it slow, keep it in the right lane so the faster cars can safely get around you.12 - Wearing earbuds while driving.When you are driving you need to have all of your senses, and this includes your hearing. If you wear earbuds you will severely impact your ability to hear. Whether it's the honking of another motorist or the sound of an emergency vehicle, if you cannot hear while driving you may put yourself and others in danger. If you can’t agree on what music to listen to, make your passenger be the one to compromise and listen with earbuds.13 - Mounting a GPS on your windshield.Many are unaware that it is illegal in 28 states to mount your GPS directly on your windshield. This is because it can hinder visibility. Instead, your GPS should be mounted on the dashboard.14 - Over-tinting your windows.Window tint is not illegal, but tinting your windows too much (which means above your state’s regulation) can result in a fine. If your tint is too dark you will not be able to see properly ahead of you. It also poses a threat to police officers who may wish to approach your car but cannot see what or who is inside. 15 - Driving with a broken horn.Horns serve a very important purpose: they allow you to warn others of dangers on the road. If your horn is not functioning properly you will not be able to communicate with other drivers on the road. Those are 15 things that are illegal to do while driving.Staying safe means learning the rules, and saving money means refinancing your loan with Auto Approve. GET A QUOTE IN 60 SECONDS

You’ve dreamt of owning a motorcycle for as long as you can remember, and you have finally decided to make that dream a reality. Maybe you are looking for a bike to take on leisurely rides, or maybe you are looking for more of an adventure. But whatever your reason is, it can be hard to know where to start.Here’s your ultimate guide to buying a beginner motorcycle.Are you prepared to own a bike? First things first, are you ready to own your own bike? You should ask yourself the following questions before you go too far down the rabbit hole: Do I have a motorcycle license? Do I know how to get one?Is my family ok with me buying a motorcycle?Do I know how to ride a motorcycle? How and where can I practice?Where will I park my motorcycle?Can I afford a motorcycle? Think about all of these questions and be sure that you have good answers for all of them before moving on.What type of bike do you need? There are several different styles of bike on the market, all of which are good for different things. Think about how you intend to use your bike. Do you want to commute? Do you want to take it out on the weekends for fun? Do you want to take it on long trips? In general, beginning motorcyclists will be best suited to get either a cruiser, sports bike, or naked bike. Each of these categories offers lightweight options that are easy for beginners to maneuver comfortably. Here are your different options when it comes to a motorcycle style.CruiserA cruiser is a great option for a beginner rider. They are powerful, stylish, and have a low seat height and relaxed seating position which makes them comfortable for new riders. They are better suited for shorter distances, so if you plan on commuting or taking short weekend trips, this might be a great option for you.  Top cruiser pick for beginners: Honda Rebel 500 SportIf your love for motorcycles was born out of a need for speed, a sport bike might be a better option. Sport bikes have a rapid acceleration which makes them better suited for experienced riders, but if you start on the lower end of the power spectrum there are a number of options available.  Top sport pick for beginners: Kawasaki Z650RS NakedA naked bike is a bike between two worlds, settled between the sport bikes and cruisers. Also referred to as standard bikes, they have an open bike frame that makes them similar to sports bikes but without the extra bulk. They also have a more upright seating arrangement, which makes them an ideal beginner bike. In fact many naked bikes are created especially with beginner riders in mind. Top naked pick for beginners: KTM 390 Duke Touring A touring bike is not designed for beginners. They are the biggest and heaviest bikes on the market, designed for long trips and far distances. A touring bike is more of an aspirational goal for when you have mastered your beginner bike and are ready to level up your motorcycle game.  AdventureAgain, an adventure bike is not designed for beginners. These powerful bikes are designed for off roading adventures and have rugged features to help them perform in different types of environments. Adventure bikes should also be viewed as aspirational bikes, a goal to have when you are very comfortable with your beginner bike.  What size bike should you get?In addition to determining what type of bike you should get, you will also need to decide on an engine size. If you are a beginner, a smaller engine size is definitely a good idea. Experienced riders know that smaller engines give you the room you need to learn the ropes. When it comes to something as powerful as a motorcycle, you want some room to make mistakes. If you make a mistake your engine size might mean the difference between some bumps and bruises or a trip to the emergency room.  Engine sizes range from 125cc to over 2000 cc. The lower the cc is, the easier the bike will be to handle. When you test drive be sure to try out some different engine sizes. Some beginners might find that a 300 cc engine is powerful enough for their needs and can still get them around on the highway. Others may easily handle a 500 cc or 600 cc engine and find that to be a better fit. Starting lower and increasing the engine size will help you find the perfect size for you. Should you buy a new motorcycle or a used motorcycle?When you have settled on what type of motorcycle is best for you, you will need to decide if you want to buy a new bike or a used bike. New bikes are certainly safer as they tend to offer more traction control and better safety features than older bikes. While a used motorcycle will be more affordable, newer bikes are actually cheaper to insure and will require less maintenance than a used bike. Newer bikes also tend to get better gas mileage and will come with a factory warranty.  If you prefer to buy a used motorcycle, it’s important to do your research. Be sure that the bike doesn't have too many miles (fewer than 20,000 miles is ideal). You should also bring along an experienced motorcycle rider who can help determine if there are any serious issues with the bike. If you don’t know any bike enthusiasts and aren’t very knowledgeable yourself, stick with a new bike.How does it ride?You should be sure to test drive any bike that you are considering. Your driving experience–as well as your safety–will depend on it. Here are some notes to keep in mind:When you sit on your bike you should be able to place your feet flat on the ground.Your feet should rest comfortably on the pegs.Your arms should reach the handlebars and you should be able to turn them from side to side without shifting your body. You should be able to pick the bike up by yourself and push it around without help.  While bigger bikes may look cool and have the style you want, they are not suitable for everyone. Make sure you find a bike that is that right size and fit for your body type. There are a lot of bikes on the market and there is something for everyone.What brand of bike should you get?Iconic brands come with higher price tags. But these brands also tend to come with higher resale value, more reliability, and oftentimes easier repairs. The more popular a brand or model is, the easier of a time you will have if something goes wrong. What bike can you afford? Another huge factor to consider when buying a bike is your budget. Chances are your bike will not be your main mode of transportation if you are a beginner. This means that your motorcycle budget will be outside of your normal budget, separate from your car payment and other costs. A motorcycle is a luxury, and you will not only need to think about how you will pay for the actual bike, but you will need to pay for insurance and maintenance as well. If you can buy your bike upfront and avoid financing, that is always a great option. But if you are looking to finance be sure to consider the following:How can I pay for a new bike? If you can save and pay for your bike upfront that is a great option. You can save a lot of money in interest and avoid the hassle of financing. But if you are looking to finance you should ensure that your credit is in good shape and that you are in a good position to make payments every month. Avoid buying a bike on your credit card, even if it seems like an easy option. You will pay a lot more in interest and getting behind on credit card payments can put you in a ton of debt fast. It’s a much better idea to get a loan instead.How much of a down payment can I afford to make? Making a down payment of 20% is a good idea to keep your loan from going underwater and to help keep your payments affordable. A higher down payment will also make you a more desirable candidate for lenders.Can I afford the extras as well? Remember that you will need to pay for insurance, registration, maintenance, and safety gear as well as the bike itself. And that’s everything you need to know about buying a beginner motorcycle.If you have your heart set on buying a motorcycle, make sure that you buy a bike that is right for you and your needs. Consider safety, practicality, and affordability when making your decision. If you already have a motorcycle and are looking to refinance, contact Auto Approve today!GET A QUOTE IN 60 SECONDS

If you are struggling financially, debt consolidation is one way that you can get a grip on your finances. But debt consolidation isn’t a magic process that erases your debt, and in some instances it might actually put you in more debt. So how does debt consolidation work and how do you know if it’s a good move for you?Here’s everything you need to know about debt consolidation.What is debt consolidation?Debt consolidation is when you have multiple debts across different accounts that you combine into one single account. There are three types of debt that you can consolidate: credit card debt, student loan debt and high-interest personal loan debt. These three types of debt can very easily get out of hand and when you have debts across many different accounts it is easy to get overwhelmed. But consolidating your debt will simplify your payments and possibly save you money. What are the benefits of debt consolidation?It simplifies your life.Debt consolidation can be beneficial for quite a few reasons. First and foremost it will simplify your life. If you have several credit card debts, they all have their own payment due date, minimum payments, interest accruals, and late payments. This means that every month you have a lot to juggle and a lot of minimum payments to make. You are always one missed payment away from an increased interest rate or a late fee. But if you can move all of these debts to one account you will only have to worry about one due date and one minimum payment. This can make your life much easier and make your finances much easier to manage.It can save you money.When you have several accounts, chances are that a few of them have high interest rates. But when you consolidate your debt you will consolidate them into one account with one interest rate, and there's a good chance that it can save you money on those high interest accounts. You can help your credit score.Your credit score takes a lot of factors into consideration and there are many things that can cause your credit score to dip when you have debts across a lot of accounts. When you have a lot of accounts you are much more likely to miss a payment, make a late payment, or make an incomplete payment. All of these things can cause your credit score to take a hit. But if you consolidate your debts you will have a much better chance of keeping up with your payments and helping your credit score.What are the drawbacks of debt consolidation?While there are many benefits to debt consolidation, there are a few drawbacks that you may need to consider.  It may cost you some money upfront.Depending on how you consolidate your debt there might be some upfront fees that you are required to pay. Loan origination fees and balance transfer fees can both eat into any savings that you might make by consolidating. Secured loans can put you at risk.If you take out a secured loan, such as a home equity loan, you can put yourself in serious financial risk. If you fall behind on payments you could even lose your home. You might end up paying more overall.If you are having trouble every month keeping up with payments, consolidation can help you to extend your repayment periods. This will help to keep your monthly payments low so that you can keep your head above water, but this also may result in paying more interest over the life of your loan.How can you consolidate debt?When it comes to consolidation, there are several different ways you can consolidate your debt, each with their own pros and cons.You can do it yourself with a low interest credit card balance transfer.One way to consolidate your credit card debt yourself is to transfer all of your debt to a low interest credit card. You can transfer your balances yourself and pay a balance transfer fee. After that your debt will be located under one account (and only have one payment).The pros: You can easily do this yourself and find a credit card that has a low (or no) interest promotional balance transfer rate. The cons: The promotional rates usually have an expiration date and you will then be required to pay the full rate. If you are late on a payment the bank may increase your rate and you will end up in more debt than you were in before.You can get a debt consolidation loan.Many banks, credit unions, and installment lenders offer specific loans that are designed for debt consolidation. When you take out a consolidation loan your lender will pay off your debts on your behalf and you will pay your new lender for the new combined debts.  The pros: You can shop around to get a good consolidation rate that may be less than some of your other accounts. The cons: There is a good chance you will pay more over the life of your loan. Your repayment period will extend so that your monthly payments are affordable, but this means that you will pay interest over a longer period of time.You can use a home equity loan to consolidate your debt.If you own a home you can actually borrow against the equity in your home. You can use this money to pay off your debts, and then you will make payments back to your mortgage company. The pros: Home equity loans usually have lower interest rates than other loans out on the market. The cons: If you fail to make payments on your home equity loan you can actually lose your house. It is a risky way to borrow money if you are in a tight financial situation.You can borrow from a retirement account.If you have a retirement account set up such as a 401(k) you may be able to borrow against your retirement account to consolidate your debts. You are typically allowed to borrow the greater of $10,000 or 50% of your account balance, or $50,000, whichever is less. The pros: There is no credit check involved and any interest that you pay on your loan goes back into your account.The cons: If you leave your job you may be required to pay back the money by the following tax season and face penalties if you cannot. You will also miss out on any gains that you may have been entitled to during that time.You can get on a debt management plan.If you are struggling and it feels like you are in over your head, a debt management plan might be the answer for you. These plans are created by non profit companies that will help you organize your finances and get on a payment plan that works for you. The pros: You can get professional help to navigate your debt repayment. They will help you to negotiate rates and help eliminate fees that you otherwise might be required to pay.The cons: You may be required to close some of your credit card accounts as a stipulation. This can cause your credit score to dip and can affect your finances in the future.Should I consolidate my debt?Debt consolidation is a good option if you have good credit, have a lot of high interest debt, and you have a plan for the future. If you have good credit you will be able to secure a reasonable debt consolidation interest rate and will most likely be able to reduce the high interest rate you are currently paying. But it’s important that you have a plan for the future. You want to ensure that you can pay off your consolidation loan, avoid accumulating new debt, and continue paying your other bills and obligations. A well thought out budget will help you to achieve this. You can look for other opportunities to reduce your monthly payments, such as refinancing your car loan. Debt consolidation might not be a great option if you have a bad credit score and/or do not have a lot of debt. A bad credit score means you may not get a good interest rate, and if you are only in a small amount of debt you will likely not see a lot of benefits in consolidation. That’s everything you need to know about debt consolidation. Debt consolidation is a great option for many people who find themselves struggling to keep up with payments every month. Consolidating can help you to simplify your payments and reduce the amount you owe every month.  Refinancing your car loan is another great way you can help to reduce the amount you are paying every month. If you have a car loan, contact Auto Approve today. Our experts can help you determine if refinancing is right for you (and show you just how much money you could be saving!)GET A QUOTE IN 60 SECONDS