Explores the Hidden Impact of Debt When Buying a Car

Share Article ( has recently published a new article that explores how a consumer's debt could serve as a hurdle to financing a car.

This is just another subtle, nearly-hidden way that debt costs you in the long run..., a fast-growing personal finance blog that tackles the difficult subject of paying down one's debt through frugal living and sound money management, has recently published a new guest post on leading personal finance blog Frugal Rules entitled: "The Hidden Impact of Debt on Your Car Loan."

The article, written by chief contributor Jerry Coffey, a frugal-living advocate who paid down over $10,000 of credit card debt in just over two years, delves into the "nitty-gritty" of the auto finance industry, identifying 10 primary factors that lenders review prior to making any decision as far as credit approval and interest rate. These include many overlooked factors, from loan-to-value ratio (LTV) to vehicle condition, to time at job and residence.

The article touches on the fact that many consumers focus solely on their credit score when financing a car, failing to realize that one's debt-to-income ratio (DTI) is an important factor. DTI is explained here, at Keystone Auto Loans, a site referenced in the original article. Consumers with DTI ratios of 40% or higher are sure to confront challenges in terms of auto loan approval. This is only an added reason that consumers should focus on paying down their debt. A higher DTI makes for a higher-risk loan, resulting in higher rates of interest.

"This is just another subtle, nearly-hidden way that debt costs you in the long run," said managing editor Taylor Brown. "We tend to look at installment loan debt and credit card debt as two separate things. Sure, one is secured by collateral and the other isn't, but those higher credit card balances could cost you when you're trying to buy a car. If you have a high DTI, you might be better off focusing on paying off that revolving credit debt before you try and finance a car." Mr. Brown went on to add that financing a car is not the most ideal way to purchase a vehicle for anyone intent on achieving and maintaining a debt-free lifestyle, but he and the team at understand that it is often a necessity, especially when it comes to new vehicle purchases.

About Established in 2012, has quickly garnered a dedicated social following and achieved status as one of Technorati's Top 100 Finance Blogs. Interested parties can go here to read Jerry's personal story of climbing out of what he calls "debt purgatory."

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