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Just How Much Does A Bad Credit Rating Cost You?

Ever wonder how much more a bad credit rating costs per month? Probably not, if you have good credit. Here are a few examples of what a subprime rating can cost in certain situations, according to Money Magazine.

  • $25,000 auto loan…Excellent credit: 4.2%…sub-prime credit: 11.3%. That is an extra $81 per month.
  • $50,000 15 year home equity loan…Excellent credit: 7.1%…subprime credit: 11.4%. An extra $130 per month.
  • $10,000 balance on a single credit card…Excellent credit: 7.9%…subprime credit: 29%. An additional $176 per month.
  • $200,000 fixed rate, 30 yr mortgage…Excellent credit: 3.8%…subprime credit: 5.4%. That is an extra $190 per month.

Do a little math and you can see that bad credit can cost you $577 more per month just to pay for the basic needs of life (minus the credit card, of course).

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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