Keeping all of your money in one place, like a checking account, may seem like the easiest option for managing your cash. But putting some of that money into a savings account can help you set some cash aside — and put your money to work for you by earning interest.

A savings account can be an easy way to put money aside for an emergency that might arise or for a future goal, like a vacation or big-ticket purchase — and it’s a more secure way to save than keeping cash at home.

Let’s take a look at some of the benefits of a savings account.

1. You may not need a lot of money to open a savings account
2. A savings account can make saving automatic
3. Your money is accessible
4. You can earn interest on your savings
5. Your savings are protected

1. You may not need a lot of money to open a savings account

The process for opening a savings account can be pretty easy. It depends on the bank, but you can usually open a savings account with as little as $25 to $100. But in some cases, you may not need any money at all.

Depending on the bank, you may be able set up a savings account either in person or online.

Set up an account in person

Once you choose a bank or credit union to work with, head to the local branch.

You’ll be asked to fill out an application for a savings account. You may need to provide two forms of identification (including a government-issued ID), your current address, birthdate and contact information, along with the cash for your minimum opening balance, if the bank requires one. Once your information is reviewed and verified, the bank will let you know if you’re approved to open an account.

Set up an account online

If you prefer to open a savings account from the comfort of your couch, there’s good news: Some banks and credit unions offer online applications for their savings accounts.

Go to the financial institution’s website and visit its savings account section to find an application link. To complete the online savings account application, you’ll likely need to have the same information handy for your application as you would if you went to a branch to open your account. Once you submit your application, the bank will confirm your info and let you know whether your application is approved.

Does opening a savings account affect my credit score?

The short answer? No. There are several factors that affect your credit scores. These include payment history, credit utilization ratio, length of credit history, credit mix and types, and recent credit.

Although opening a savings account won’t impact your credit score, sometimes lenders will ask for information on your income and assets, which can include money in savings accounts, in order to make lending decisions. So, it can help to have money saved up if you want to take out a loan in the future.

2. A savings account can make saving automatic

Let’s face it — finding extra funds to set aside isn’t always easy. Setting up automatic deposits into your savings account can help you build up your savings without thinking about it.

You can choose to automatically direct deposit a portion of each paycheck or set up regular automatic transfers from your checking account to your savings account.

If you’re married or in a domestic partnership, a joint savings account can help you and your spouse easily save for mutual financial goals by allowing each of you to deposit money automatically into the account.

3. Your money is accessible

Some savings vehicles, like certificates of deposit (sometimes referred to as CDs), don’t allow access to your money without a penalty before the account’s maturity date. But with a savings account, you’ll typically have easier access to the funds in your account. And you may be able to transfer the funds to your checking account to write a check or use your debit card.

The accessibility of a savings account can make it an ideal emergency fund — you can put money away but access your cash when you really need it.

Just keep in mind that federal regulations may limit the number of transfers or withdrawals you can make from your savings account within a given period, depending on how you make the withdrawal and its purpose.

4. You can earn interest on your savings

Have you heard the saying, “A penny saved is a penny earned”? With savings accounts, it’s true that your money can help you earn more money.

As of October 2024, some savings accounts, called high-yield savings accounts, offer an annual percentage yield, or APY, of between 3.0% and 4.5%. For example, as of October 2024, a Credit Karma Money™ Save account offers an APY of 3.6%.

Money in a savings account typically grows as a result of compound interest. With compound interest, you earn interest on the money you put into the account and on the interest you’ve already earned. Depending on your bank, your interest may compound daily, monthly, quarterly or annually. A higher APY will result in higher returns.

It may not seem like a lot of money at first, but over time you might notice a boost to your savings.

5. Your savings are protected

If you’re someone who prefers to put your savings in a piggy bank, consider this: If your money is stolen or destroyed in a flood or fire, you won’t be able to recoup your cash.

But if your money is in any deposit account, including savings, with an institution that’s insured by the Federal Deposit Insurance Corporation, or FDIC, it’s protected by the U.S. government. FDIC insurance will cover the money you deposited into the account, plus any interest earned, up to $250,000. And since that coverage applies per account, per bank, it can help you extend your coverage.

That means that if an FDIC-insured institution goes out of business, your savings are protected up to the $250,000 limit.

What’s next?

If you aren’t sure whether a savings account is the right savings tool for your goals, take some time to understand how savings accounts compare to other savings vehicles, such as certificates of deposit and money market accounts.

But if you’ve decided that opening a savings account is the right financial move for you, be sure to shop around and compare account terms and APY to help find the best account for your needs. And always read the fine print to understand any monthly fees, minimum balance requirements or other terms associated with the account.

After active duty, readjusting to civilian life can be a challenge. Not only do you need to adapt to a new lifestyle, but you may also have to shoulder new financial pressures. You may be able to get some help with at least one big purchase — a car.

Here are some things to know about financing your car as a veteran.

• Can I get a VA loan for a car?
• Auto loans with discounts or special rates for veterans
• How veterans can save money when buying a car
• Other costs of car ownership

Can I get a VA loan for a car?

While the Department of Veterans Affairs offers home loan assistance, it doesn’t offer car loans for veterans.

Under some circumstances, however, VA can help with a vehicle purchase. If you suffered a disability while on active duty that interferes with your ability to drive, you may be eligible for an auto benefit.

Known as the automobile allowance and adaptive equipment benefit, this is a one-time payment of up to $21,488 paid out to veterans with qualifying injuries.

If you qualify, you can use this money to buy a vehicle that is adapted to your needs. For example, if your active-duty injury means you must drive a vehicle equipped with power steering or specialized brakes, you may want to apply for the benefit.

To check your eligibility, you need to file a claim for disability compensation and get VA approval before you purchase either a vehicle or adaptive equipment.

It’s a good idea to contact VA directly to get the program’s most up-to-date rules and guidelines. Check its benefits and services here.

Auto loans with discounts or special rates for veterans

If a VA benefit isn’t an option, you may have access to auto loan offers from credit unions. Credit unions are nonprofit businesses, meaning that rather than being profit-driven, they aim to focus on member services. Opting for a credit union — which you may be able to join if you meet certain requirements — could help you save some money. Some credit unions cater specifically to military personnel and may offer better loan options than some traditional lenders.

Credit union offers may vary widely, though, so it’s good to do some research.

Here are some options.

PenFed Credit Union

PenFed, or Pentagon Federal, caters to military personnel as well as civilians who are members of certain associations.

Although you will need to make a $5 initial deposit in a savings account to join, PenFed could give you access to attractive loan terms through its car-buying service.

Navy Federal Credit Union

If you’re an Army, Marine Corps, Navy, Air Force, Coast Guard or Air National Guard member — or if you’re a retired service member or veteran — you may want to consider a Navy Federal Credit Union auto loan. NFCU membership is also available to certain civilians, including some government employees.

As an NFCU member, you may qualify for competitive auto loans if you’re looking for a new or used vehicle. And if you opt for direct deposit, you may qualify for an additional 0.25% interest rate discount. Check with NFCU directly to learn whether you qualify.

Although NFCU offers financing for new or used cars as well as motorcycles and other vehicles, it doesn’t offer loans for used cars from private sellers or for lease buyouts.

USAA

As a former military service member, you could be eligible for USAA membership.

The nearly century-old military bank offers its members competitive interest rates for new and used cars.

If you apply for a loan and are approved, USAA offers a “rate lock” option for your auto loan. This allows you to take up to 45 days to decide whether you want to go through with the loan.

How veterans can save money when buying a car

In addition to auto loan options from military credit unions, you may also have access to manufacturer-based discounts as a veteran.

Check out military offers

Some car dealerships and manufacturers may offer military discounts and rebates for veterans. As you shop for your vehicle, here are a few to start your search.

• Ford offers veterans a $500 cash bonus on eligible purchases or leases of new Ford vehicles. But it honors this deal for only 24 months after you complete your service.
• General Motors offers a special discount below the manufacturer’s suggested retail price on the purchase or lease of eligible vehicles, which could save you thousands. You’ll need to create an account to confirm your eligibility and receive an authorization number.
• Acura offers veterans a $750 credit to use on select vehicles within two years of your completion of active service.
• Jeep offers veterans $500 of bonus cash on select vehicles. You’ll need to purchase the vehicle within 12 months of your discharge date.

Keep in mind that this is just a select representation of car manufacturers that offer a veteran discount. Check with your preferred brand for similar offers.

Ask for a discount

If your dealership doesn’t advertise a veteran discount, that doesn’t mean there isn’t one.

Come prepared with your military ID and ask what your options are. A car dealer might be willing to consider a discount for you.

Even a small APR allowance could save you a significant amount of money. For example, if you borrow $20,000 for a term of five years with an APR of 5%, you will pay $22,620 over the course of the loan. However, if you borrow $20,000 at 3% for the same term, you will pay only $21,540 over the course of the loan. As you can see, a small drop in APR can make a big difference in your wallet.

Other costs of car ownership

Beside getting a car, you’ll want to consider other costs associated with car ownership. Purchasing auto insurance, for example, can significantly affect your monthly payment.

Call your insurance provider to verify whether it offers veteran pricing, and check with providers like USAA, which serves military members and their families, for competitive rates.

Find out more about lowering your auto insurance rates here.

What’s next?

If you’re a veteran and ready to buy a car or need special equipment to help you drive, you have options. These may include enlisting VA help, comparing military-specific pricing from car manufacturers and getting financing from credit unions that cater to military members.

Keep in mind that your credit is one of the factors that lenders consider when determining whether you qualify for financing. If you’re struggling to find a loan option, you may need to focus on improving your credit health.

You can get started by paying down debt and diversifying your credit mix.

Serving your country may mean some extra perks when it comes to buying a car.

From special military-only lending options to dealerships offering a discount on the car itself, you may be able to find favorable terms and reduced rates that suit both your needs and your budget.

Let’s explore some of those options below.

• 3 best military car loans
• Auto discounts for military members
• Special auto perks for military members

3 best military car loans

Credit union auto loans for military personnel can offer benefits that loans from many traditional lenders may not. If you are looking for vehicle financing, auto loans offered by military credit unions could be a great place to start.

To get a military car loan, you must be an active or retired military personnel or related to one. After qualifying as a military member, you will still have to get approved just like any other loan. But the credit and other loan requirements may differ per lender.

Since military credit unions were created specifically to meet the needs of service members, they might be more familiar with the details and nuances of military life and can help you navigate the borrowing process accordingly.

If you’re considering getting your auto loan from a military credit union, here are two credit union options and one military bank option.

Navy Federal Credit Union

Navy Federal Credit Union is a military credit union insured by the National Credit Union Administration. With membership limited to military personnel and their families and household members, Navy Federal offers loans for new cars and used cars. This credit union may also be able to help you refinance your current auto loan.

However, if you’re looking for help with a lease buyout loan, you’ll have to look elsewhere.

For those who qualify, the credit union offers a low starting annual percentage rate, or APR. Not only does the credit union offer lower rates than some traditional banks, but if you qualify it may also offer longer terms or a loan with a low car down payment or no down payment.

PenFed Credit Union

If you’d prefer a credit union that has a membership pool that includes civilians from certain organizations, you may want to consider Pentagon Federal Credit Union, or PenFed.

PenFed’s starting auto loan rates are low, but you’ll likely need excellent credit to qualify. And if you purchase a vehicle through the PenFed car buying service, your rate could be even lower. With these competitive annual percentage rates, you could save thousands when compared with a traditional lender.

USAA

USAA only serves military members, veterans and their families. This focus has allowed them to become well versed in how to best serve military members, and it’s reflected in their above-average customer satisfaction rating.

USAA offers longer terms of up to 84 months, flexible payment options and they allow you to take your car with you if you’re deployed overseas. They also offer lease buyouts and refinancing of both USAA loans and non-USAA loans. You can easily start the application process online. Plus, they don’t charge you an application fee or a prepayment penalty.

Auto discounts for military members

Certain manufacturers may offer discounts on new cars to military members. As you start shopping for a car, you may want to take these into consideration.

• Honda — Honda offers savings of $500 on the purchase or lease of certain new vehicles.
• Volvo — If you’re serving overseas, Volvo has an amazing offer. Not only can you save thousands of dollars, you can also enjoy nice rewards. Through its program, you can drive your Volvo for up to five years in Europe and have it shipped to a Volvo dealership in the U.S. There’s also a worldwide warranty of four years or 50,000 miles, whichever comes first. If you anticipate moving your car to the U.S. at the end of your tour, then this could be a worthwhile option.
• Dodge ­— Dodge offers a military and veterans discount of up to $500 in bonus cash on select models. You can apply this to a lease or a purchase.

Keep in mind that offers may change without notice. Take the time to find a car that suits you and then check into the discounts offered. Your military status could help you land a deal.

Special auto perks for military members

Military car loans may offer you better terms and rates compared to other car loans. But even though a military car loan may come with deals or additional benefits, it’s still a loan and the same risks apply. Make sure you can afford your loan payments — defaulting on your loan can hurt your credit score.

You may be able to break your auto lease

When you are deployed or have a permanent change of station, the Servicemembers Civil Relief Act protects you if you need to break your auto lease.

Although you’ll need to fill out some paperwork, it’s better than paying for a car that you are unable to drive.

Car insurance discounts

The car itself is not the only expense you’ll need to consider. Car insurance costs can add up quickly. As a member of the military, you may have access to discounts.

Many insurance companies offer a discount to active-duty military members. Companies that cater to military members and their families include USAA and Geico.

What’s next?

Your service may help you qualify for special auto offers that are designed to help ease the financial burden of owning a car. Start by checking rates at your military credit union and look for specific manufacturer offers that may apply to you.

What you need to know about an InboxLoan personal loan

InboxLoan is operated by the Kashia Band of Pomo Indians of the Stewarts Point Rancheria in Sonoma County, California. The tribal lender offers online installment loans, considering people with a wide range of credit. Even if you have some credit hiccups, InboxLoan may consider your application provided you are at least 21 years old, have a regular source of income, a bank account in good standing, and a valid email address and phone number.

First-time borrowers may be approved for a loan ranging from $200 to $1,500. Returning customers may be able to borrow up to $5,000.

If you’re approved for a loan from InboxLoan, you can use it for just about anything — a medical emergency, car repair or anything in between.

Here are some key features of an InboxLoan personal loan.

Tribal lender

InboxLoan is a tribal lender that operates from a Native American nation. Tribal loans offered by InboxLoan may seem similar to payday loans, but the loans offered are actually installment loans.

Unsecured loans offered

Loans from InboxLoans are unsecured. That means you don’t need to put any collateral on the line, like your car or other assets, to get the funds you need.

Easy to apply

Applying with InboxLoan is simple. You can apply online and get a lending decision within minutes. If you’re approved for a loan, the funds may be deposited in your bank account as soon as the next business day.

It’s important to note that InboxLoan will consider the bank account information you provide as a means of processing payments on the loan. So when it’s time to repay, if you don’t have enough money in your account to cover the payment, you may face a late fee from InboxLoan as well as an overdraft charge from your bank.

High interest rates

High interest rates are often associated with payday and installment loans. But it’s worth noting that the interest rates offered by InboxLoan can be even higher. Payday loan fees can equate to an annual percentage rate, or APR, of almost 400%. But with InboxLoan, you could be looking at rates and fees that equate to an APR of as much as 780%.

For example, if you borrow $500 from InboxLoan at a 780% APR and pay it off over 24 payments, you could end up paying around $3,405 in finance fees. This means that by the time you pay off your loan, you’ll have paid just over $3,900 to repay the $500 you borrowed.

Keep in mind that InboxLoan doesn’t charge a prepayment penalty. So if you can pay off the loan early, you won’t be charged a fee and could potentially save on interest.

But it’s important to look at other funding options when facing an APR this high. So make sure to look at your alternatives before pursuing this option.

A closer look at an InboxLoan personal loan

Here are some more standout features of an InboxLoan personal loan.

Short-term solution for emergency expenses

InboxLoan offers short-term loans to help pay for life emergencies. You might need help with medical bills, car repairs, home repairs or making this month’s rent. But due to the expense, this shouldn’t be a long-term solution to your financial situation.

Not available in every state

You won’t be able to apply for a loan through InboxLoan if you live in the following states: Arkansas, Colorado, Connecticut, Georgia, Minnesota, New York, New Mexico, North Carolina, Pennsylvania, South Dakota, Utah, Vermont, Virginia or West Virginia.

Who an InboxLoan personal loan is good for

If you’re in desperate need of a cash infusion, InboxLoan may be worth considering. But before taking on a loan, you may want to consider other lenders or explore a side hustle instead.

How to apply with InboxLoan

To apply with InboxLoan, you need a job or other regular source of income, a bank account in good standing, a valid email address and phone number, and be at least 21 years old. You can apply online, but your information will need to be verified by an InboxLoan representative.

Start by going to InboxLoan.com and clicking “Apply Now.” You’ll be asked to choose a loan amount and enter your basic information.

You’ll need to have the following information ready to complete your loan application:

• Full name
• Email address
• Phone number
• Address
• Whether you rent or own your residence
• The amount of time you’ve spent at this address
• Driver’s license information
• Social Security number
• Date of birth
• Income details
• Bank information

Once you apply, a representative should reach out to confirm your information. If you’re approved for a loan, you could receive the funds as soon as the next business day.

Not sure if InboxLoan is right for you? Consider these alternatives.

• Earnin: Earnin is an alternative option for emergency cash. It’s an app that allows you to borrow against your paycheck without fees or interest.
• Upstart: Upstart might be ideal if you want a lender with a prequalification option that considers more than just your credit scores.
• Payday alternative loans: Federal credit union members can consider these emergency cash options, which have limits on fees.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

Household debt in America rose to a record $13.86 trillion in the second quarter of 2019, according to the Federal Reserve. The average American family may be trying to juggle credit card, student loan, mortgage, auto and personal loan debt. Debt consolidation offers a way to bundle a number of outstanding debts into one monthly payment, which may help you manage your finances more efficiently.

Let’s dive into the specifics of debt consolidation and find out if it could be a good move for you.

What is debt consolidation?

Debt consolidation is a way to combine a number of outstanding debts into a single loan with one monthly payment.

If you’re able to consolidate your debt into one loan with a lower overall interest rate, it may help you save on interest charges and pay off your debt faster. But consolidation doesn’t eliminate or forgive your debt. And keep in mind that even with a potentially lower interest rate, you may end up paying more over time because some debt-consolidation loans have longer terms than those for the multiple debts you’re repaying.

If you’re struggling to stay on top of your bills, here are a few things to do before taking out a debt-consolidation loan.

• Reach out to your creditors to explain your situation and see if they can accept lower payments, cut any fees or reduce your interest rate. You may also be able to arrange the same due date for monthly payments across all of your debts, simplifying your finances.
• Speak with a certified credit counselor.
• Beware of debt-settlement companies that charge fees to negotiate your debt.

Common ways to consolidate debt

There are several options to choose from if you decide to move forward with debt consolidation. The type and amount of your debts should figure into your choice.

Balance transfer

Many credit cards offer promotional periods with 0% interest on balance transfers. If you’re approved for a balance transfer card, you may have the opportunity to transfer several debts onto  one card to repay your debt at 0% interest for a limited time.

But before you make a balance transfer, make sure you understand exactly when and how your new card will start charging you interest. Look out for balance transfer fees and note that depending on the card, any new purchases you make on your card may not be subject to the promotional interest rate. And it’s important to make a plan for tackling your debt during the interest-free period and making sure it doesn’t get out of hand again.

Additionally, before you start transferring balances to a new card, make sure to check the card’s credit limit. You’ll want to think through which debts you’re transferring to the card because the credit limit may be lower than your combined debts or eat into too much of your available credit.

Personal loan

Personal loans for debt consolidation are offered by many lenders including banks, credit unions, and online lenders. You can use personal loans to finance weddings, vacations and medical bills — and to consolidate debt.

Debt-consolidation loans are installment loans that roll your qualifying debt into one monthly payment. A debt-consolidation loan may be a smart way to manage your finances, because you’ll know what you need to pay each month and for how long.

Before you move forward with a personal loan, make sure to understand the terms and fees, which may increase the total amount you pay back.

Home equity line of credit

Another option for debt consolidation is applying for a home equity line of credit, or HELOC. This may be the riskiest option because you’ll have to put your home up as collateral. If you’re unable to keep up with payments, you may lose your home.

Though interest rates on home equity loans may be lower than other debt-consolidation options, make sure to take the risk of losing your home into account before opting for a HELOC.

Is debt consolidation right for you?

If you’re struggling to manage multiple debt payments and are ready to buckle down on your spending habits, debt consolidation may be worth considering. Before you commit to a plan, take a closer look at your finances.

Debt consolidation might be a good idea if …

• You understand why you’re in debt and are focused on controlling your spending.
• You want to reduce the number of monthly payments you manage.
• You have a credit history that will help you qualify for a lower-interest personal loan or a credit card with an introductory 0% APR on balance transfers.
• Your current income can cover the debt payment and any other bills you may have. If it doesn’t, you risk running into more financial difficulties down the road.

Debt consolidation might not be for you if …

• You can’t change your spending habits right now.
• You have a small amount of debt that could be repaid quickly.
• Your credit history might stop you from getting a low-interest personal loan or promotional balance transfer APR.

What’s next?

Debt consolidation may not solve all of your financial woes, but it could be a good step if you’re able to stick to a debt-management plan. Consider consulting with a certified credit counselor or a certified financial planner who may be able to help you tackle your debt and make financial progress.

If a loved one has asked you to co-sign a car loan, you might be in a tough spot. On one hand, you want to help your close friend or family member. But on the other hand, you’d be putting your own financial future on the line.

If a loved one has less-than-perfect credit, they may have trouble getting approved for a car loan. Or if they can get approved, the interest rate might be in the double digits. Getting a co-signer with solid credit can help increase their odds of approval and possibly secure a lower rate.

Before you jump in to help your friend, it’s important to understand exactly what co-signing a car loan means, including what you’ll be responsible for and what potential effect it could have on your finances.

• What is co-signing for a car?
• How does co-signing for a car affect your credit?
• Before you co-sign for a car …

What is co-signing for a car?

A lender or leasing company may require an applicant to have a co-signer if the applicant’s credit and income don’t meet the lender’s requirements to be approved on their own. Typically, the co-signer will need strong credit. If you choose to co-sign for a car loan, your name — along with the applicant — goes on the loan documents, and you become legally responsible to pay back the loan, even though you have no right to the car itself.

If your loved one misses a car payment or defaults on the loan, those delinquencies can show up on your own credit history. And if your family member or friend defaults, you’ll be liable for repaying what’s owed, along with any late fees or collection costs. In a worst-case scenario, the lender could sue you or garnish your wages to collect the money.

In some cases, you might be able to negotiate exactly what you’re responsible for as the co-signer before you sign the loan, according to the Federal Trade Commission. For example, if you only want to be on the hook for repaying the loan principal, and the lender agrees, you could ask the lender to include those terms in the loan contract. Again, this negotiation would have to happen before you sign on the dotted line.

How does co-signing for a car affect your credit?

When you co-sign a loan, the loan can show up on your credit reports. If your friend or family member doesn’t make a payment on time or at all, that can also show up on your credit reports, and could negatively affect your credit scores.

This could also affect your ability to get approved for a loan of your own down the road. With the responsibility of the applicant’s loan on your shoulders, your debt-to-income ratio, or DTI, can increase. Your DTI is a key factor that many lenders consider when reviewing a loan application. Even if you’re able to secure a loan with a co-signed loan on your credit history, you might face less favorable terms.

Before you co-sign for a car …

The risks of co-signing for a car can be big. Here are some things to consider before you take the plunge.

Can you afford the payments?

In the worst-case scenario — if the person you co-signed a loan for can no longer afford the loan and ends up defaulting — could you afford to take over the monthly payments? Depending on the size of the loan and the loan term, you could end up responsible for a hefty amount of money. If your budget can’t cover these costs, saying yes to co-signing could put your finances at serious risk.

Do you want to take on a long-term financial commitment?

You’ll be responsible for repaying the loan throughout its entire term if your loved one defaults — unless the person you co-signed the loan for refinances the car loan. This might give the original applicant the option to remove the co-signer from the loan. If they improve their credit by making on-time payments and paying down their debt, they might be able to refinance their car loan in the future. At that point, they might be able to remove you as the co-signer by refinancing the new loan in their name only.

Are you willing to check in on the loan each month?

Since any missed or late payments can affect your credit, checking in each month to make sure your friend or family member will be making their loan payment is a good idea. Lenders are under no obligation to notify you if a payment was missed — though you could ask the lender to let you know when your friend misses a payment.

How strong is your relationship with the person asking you to co-sign?

Checking in regularly on your friend or family member to make sure they’re making payments — or having to cover a missed payment — could put some strain on your relationship. Consider whether you think your relationship could remain intact with this added financial pressure.

What’s next?

In the end, you’re 100% responsible for the entire loan amount in the case of default when you co-sign for a car. And you’re risking not only your finances but also your relationship with your friend or family member.

If you decide not to co-sign, explain why. You might also offer to help your friend in other ways. For example, you could help them search for a less-expensive car that would require a smaller loan. Or you might loan them some money for a down payment on the car loan to help improve their likelihood of being approved. Both options could help your friend get a set of wheels without you taking on credit risk.

A VIN is the key to unlocking a vehicle’s history.

The 17-character VIN that’s stamped on your car may seem like a confusing jumble of numbers and letters, but they hold a lot of info about a car’s past and present.

Let’s take a closer look at what the characters in a VIN mean, where you can find a car’s VIN and when a VIN can come in handy.

• What does a VIN mean?
• Where can I find a car’s VIN?
• Why is a VIN important?

What does a VIN mean?

Each VIN is unique — think of it as a car’s fingerprint. Every car in the United States that has a model year of 1981 or later is required to have a VIN in the same standardized format. Vehicles made before 1981 had VINs, but their length and format varied by automaker.

Although the string of numbers and letters may seem random, there’s actually a code — with different characters translating into different information about the vehicle.

• Characters 1-3 identify the car manufacturer.
• Characters 4-8 outline the vehicle model, body style, engine type and more.
• Character 9 is a code completed by the manufacturer to confirm the accuracy of the VIN number.
• Character 10 indicates the model year of the vehicle.
• Character 11 reveals which plant assembled the car.
• Characters 12-17 is the car’s serial number (for high-volume manufacturers).

Image: aawhatisvin-1

If you want to understand what a car’s VIN means, the National Highway Traffic Safety Administration VIN decoder can help. Just enter the car’s VIN and model year, and the VIN Decoder tool will interpret the VIN for you.

Where can I find a car’s VIN?

The VIN may appear in one or more places on a car as well as in some documents.

On the car

The most common location is where the windshield meets the dashboard on the driver’s side of the vehicle. To see it easily, stand outside the car. The driver’s side door jamb — near where the door latch is — is another place to look.

Under the Federal Motor Vehicle Theft Prevention Standard, vehicles with a model year of 1987 or later that are designated “high-theft” also feature the VIN on certain major parts such as the engine, transmission, doors and fenders. This can help police trace and recover parts from stolen cars.

Pay attention to the VINs on a vehicle you’re considering buying. If the VIN appears in multiple places, but the combination of numbers and letters isn’t the same in each location, the car may have been rebuilt with stolen parts.

On some documents

If you aren’t near the car, you’ll likely also be able to find the VIN on the car’s title or registration card, auto insurance policy or service records.

Why is a VIN important?

A VIN comes into play in a number of scenarios.

If you want to buy a used car

When buying a used car, getting the details on a car’s history can help you make sure you don’t end up with a lemon. Dealerships and car-buying websites may provide vehicle history reports, but if you’re buying from an individual, you’ll likely need to get a report yourself.

To do this, you’ll typically need the car’s VIN. You can access vehicle history reports easily on several websites, such as Carfax and AutoCheck, using the VIN.

You can also use the National Insurance Crime Bureau’s VINCheck tool to find out if a car has been reported as stolen or has a salvage title.

If you want to know if a car has any recalls

Curious if your car’s manufacturer has issued any safety recalls — or if a car you’re considering buying has any major recalls? Enter the VIN into the National Highway Traffic Safety Administration’s recall tool to stay current on recalls specific to the car within the past 15 calendar years. You can also use Credit Karma Auto to check for recalls on vehicles you’ve matched to your Credit Karma profile.

If your car is stolen

It’s a good idea to have your VIN on hand in case your car — or parts of your car — are stolen. Law enforcement can enter the VIN into local and national databases and can use it to help identify and recover a stolen vehicle or parts.

Next steps

A VIN can reveal a lot of essential information about a vehicle. If you plan to buy a used car, use its VIN to gather information on the car’s past.

But don’t stop at a vehicle history report. Be sure to take a test drive and get the vehicle inspected by an independent mechanic who can advise you on its reliability before you buy.

A debt consolidation loan may seem like the perfect solution to getting your monthly payments under control. But finding a debt consolidation loan with bad credit can be difficult. In fact, even if you’re approved for a debt consolidation loan with bad credit, you might not receive a better interest rate on the debt you’re consolidating. And you may wind up paying more in fees and interest.

It’s possible to get a debt consolidation loan with bad credit. But it’s important to be aware of the drawbacks, including high interest rates and other costs, that are typically associated with bad credit loans.

• What is a debt consolidation loan?
• How to start looking for a debt consolidation loan
• Benefits of debt consolidation loans for bad credit
• Disadvantages of getting a debt consolidation loan with bad credit
• What credit scores do I need to get a debt consolidation loan?
• Alternatives to a debt consolidation loan

What is a debt consolidation loan?

A debt consolidation loan is a loan that you apply for to pay off current debts, like credit card balances. The balances from your existing debt are transferred to the new loan, and you make payments on your new debt-consolidation loan. It may be easier to manage paying off your debt when you only have one payment to keep track of.

When you’re looking for a debt consolidation loan, it is important to look for more favorable terms, such as a lower interest rate, compared to the terms associated with your current debt. The goal is to find loan terms and an interest rate that are more manageable for you. If you have bad credit, it may be harder to qualify for loans. Keep reading to find out our best tips to get a debt consolidation loan with bad credit.

Benefits of debt consolidation loans for bad credit

If you’re still wondering how a debt consolidation loan could help you, here are a few reasons a debt consolidation loan may be right for you.

Go from multiple monthly payments to just one

Making several types of debt payments each month, whether you’re paying on multiple credit card balances or personal loans, can be difficult to manage.

Rather than risk losing track of all those monthly payments, a debt consolidation loan could let you make just one monthly payment instead of many, which may be easier for you to remember.

Possibly get a lower interest rate

A debt consolidation loan may have a lower interest rate than you’re currently paying on other debts. The average credit card interest rate in March 2024 was about 21.51%, according to Federal Reserve data. But the average interest rate for a 24-month personal loan, which can be used to pay off other debts, was just 11.92%.

Help your credit

If consolidating your debt allows you to pay credit card debt down more quickly, you may be able to improve your credit utilization rate — which may help boost your credit scores.

Another important factor in credit scoring is payment history — and with a debt consolidation loan, you could potentially improve your record. Rather than keeping track of multiple payments, a debt consolidation loan leaves you with just one payment to stay on top of every month.

Disadvantages of getting a debt consolidation loan with bad credit

You may face some significant obstacles when you’re looking for a debt consolidation loan with bad credit.

Can be hard to get approved

The first challenge is simply getting approved. If your credit scores are below a certain threshold, some lenders may not work with you. But because lenders typically consider a variety of factors (and not just your scores), including your credit history and debt-to-income ratio, you’re not necessarily ruled out if you have bad credit.

Higher interest rates

If you are approved for a debt-consolidation loan and you’ve struggled with credit, you may face higher interest rates than you would if you had strong credit. Typically, the better your credit, the better your interest rates. But keep in mind, even if you’re approved for a less-than-ideal interest rate, it may still be beneficial if the rate is lower than your debt’s current interest rates.

What credit scores do I need to get a debt consolidation loan?

Different credit-scoring models have different ranges of what scores are generally considered poor, but scores 579 and below are typically considered poor in the FICO® Score 8 and FICO® Score 9 models. With scores in this range, it can be difficult to get a debt consolidation loan at all — let alone get one with favorable terms.

Using the same scoring models, scores between 580 and 739 are generally considered to be in the fair to good range. You’ll likely have a better chance of securing a debt consolidation loan with good terms in this range. Scores of 800 and above are generally considered “excellent” and put you in a better position when applying for a debt consolidation loan than if your scores were lower.

It’s important to keep in mind though, that your credit scores are just one of the factors that a lender considers when deciding on whether to approve you for a debt-consolidation loan.

Alternatives to a debt consolidation loan

It’s important to know that debt consolidation isn’t the only way to deal with debts you’re struggling to repay. Here are some options that may help you pay down your current debt — without creating new debt.

• Reach out to your current creditors. They may be willing to negotiate repayment terms that are more manageable for you, rather than see you default on your debt.
• Consider credit counseling. A credit counselor could help you craft a debt-management plan to help you get out of debt faster — and credit counseling is usually free.
• Consider a 0% intro APR balance transfer credit card. If you’re working to pay off credit card debt, consider balance transfer options with an introductory 0% APR credit card.
• Look into a home equity loan. If you have equity in your home, you may be able to get a home equity loan or line of credit to pay off high-interest debt. Because the loan’s secured by your home, you may qualify for a lower interest rate. But be careful: If you default on your home-equity loan, the lender could take your home.

Bottom line

If you’re struggling to keep track of multiple debt payments each month or have high-interest debt that you’d like to refinance at a lower rate, a debt-consolidation loan might be an option for you — even if you have what creditors consider “bad credit.” But your credit may make it difficult to get favorable rates and terms on a debt-consolidation loan.

Before you commit to any loan, make sure to explore all of your options. Once you find a loan that works for you, be sure to always pay the agreed amount on time every month. This can help you begin to improve your credit over time.