The second largest investment you will have in a lifetime perhaps is getting your own car. After you have scrutinized every model and zeroed in on the best car to purchase, the next process is to determine how you are going to pay it.
The road to car ownership is paved with car finance options. The package you choose will make the difference between monthly struggles and easy payments. Will you get to keep driving your car or have to default on the loan over a certain period?
When looking at your financing options, here are valuable tips to consider:
Think about interest rates. Your interest rate will depend on a number of factors such as the type of the car, the length of the loan term, your credit rating and the lender. Generally new cars have much lower interest rates. Higher interest rate is required for longer car loans. You will get lower interest rates if you have been pretty good at keeping a good credit rating score. Focus on the interest rates as different companies provide varying options.
Choose from as many lenders as possible. Your
The Birth of No Credit Auto Loan
Traditionally, young car buyers were considered extremely risky because they had no credit history. Lenders had no information to calculate the credit repaying ability of young buyers and so, they rejected their loan applications.
But, things changed with increasing competition. Lenders and online auto financing companies understood that they were losing a large segment of the market by avoiding people with no credit history. So, they introduced a special program called no credit auto loan.
Benefits of No Credit Auto Loan
If you are a young car buyer with no credit history and looking for a loan, you will have to apply for a no credit auto loan. The loan program is specially designed for car buyers without any substantial credit history. Following are the benefits of applying for the loan program:
You can buy a Car easily
Automobiles have become extremely expensive. A brand new automobile costs more than $30,000. Even a used car is available for more than $15,000. The higher price of cars has made loans indispensable.
Sadly, people with no credit history were not able to buy a car before
When one of the world’s richest man talks about money, everyone must pay attention. His advice is useful for everyone including people with car loans. If you have a car loan and are losing money because of high-interest rates, you must take necessary steps for saving your hard-earned money.
You can save money by applying for refinancing because it will help you in obtaining lower interest rates and affordable monthly payments. When you begin the process of refinancing, you apply for a second loan to pay off your first loan.
When should you apply for Refinancing?
Even though it is a good move for saving your money, you should not opt for it without thorough understanding of your situation. If any of the following situations applies to you, only then you must initiate the refinancing process:
Is there a Significant Drop in Interest Rates?
Check out the current interest rates for obtaining a used car loan in your area. If the interest rates have reduced phenomenally since you purchased your car, you could save money by refinancing your car.
Is there an Improvement in your Credit Score?
Your credit score is an important factor for lenders to determine your interest rates. If you had a bad credit
Born abroad but now living in America? One thing is common for all immigrants: you cannot remain unaffected by the car culture of America. The car is the dominant mode of transportation in America. You need it to go places. And, a car loan is the only mode for obtaining an automobile.
Why is a Car Loan compulsory for buying a Car in America?
It is not compulsory for making a car purchase in the country. But, it has become a norm because of the following reasons:
>> High Cost of Automobiles
>> Lower Buying Capacity of Car Buyers
>> Easy Loan Approval by Lenders
>> Easy Way of Building Credit
Buying a car with the help of a car loan is very common in the country. People opt for a car loan even when they have the required amount of money because they do not want to part with their savings. Also, it helps them in building a credit score that is required to make a big purchase such as a home.
How to obtain a Car Loan when you are New to the Country?
If you are a new immigrant and want to obtain a car loan, you will have to provide valid proof of your identity.
Are you in need of cash? Have you exhausted all your options but unable to find a solution to your cash problems? Even financially stable families may get caught in financial crises. Prolonged illness, loss of a job or any other unforeseen event may compel you to look for quick financing options.
If you are trying to obtain a short-term loan to end your financial crises, you may have heard of the following advertisements related to auto title loans:
1. Get Cash for your Car!
2. Get Quick Cash!
3. No Credit Check required!
Auto title loans are prevalent in several American states. It is popular among borrowers because the loan program is easy to obtain. You may have heard about it from your neighbors or friends. If you are interested in obtaining the loan program, you must only join the club after understanding it thoroughly.
What is an Auto Title Loan?
According to Investopedia, it is a short-term loan in which the borrower’s car title is used as collateral.
To obtain the loan program, you will have to allow the lender to place a lien on your car title. Also, you will have to surrender the original title to the lender.
What is the Difference between an Auto
Help when you can help!
It is true that we must help those who are in need. But, you must remember that you can help others only when you are in a position to help. So, before agreeing to co-sign a car loan contract for a friend, a family member or a colleague, you must understand your financial situation and ascertain whether you are eligible to become a co-signer.
Can I Co-Sign a Car Loan Contract?
Even if you are eager to help someone in buying a car, you should consider the following factors before co-signing a car loan contract:
A good credit score is the pre-requisite for becoming a co-signer. If you have a bad credit score because of late payments, missed payments, bankruptcy, etc., lenders will consider you unfit for becoming a co-signer.
Debt-to-income (DTI) ratio manifests the percentage of your gross monthly income that goes towards paying debts. A higher ratio ensures the lender that you have money to make payments if the primary borrower (the person whom you are co-signing for) misses them. So, it is very important to have a good DTI ratio for becoming a co-signer.
Future Purchase Plans
If you are thinking of buying a home or a
Are you drowning in high payments with a high-interest rate car loan that you simply can’t afford? Were you one of those car shoppers that smelled the new interior, gawked at all the gadgets, took a test drive and just wanted to hit the road in your new car no matter what the cost or the finance rate? Like many others in your shoes, after the initial excitement wore off you realized the interest rate was higher than you expected, and now it’s squeezing your budget.
You might want to think about refinancing your vehicle. Refinancing could save you money if you qualify for a better rate. And, at a credit union you may benefit from more flexible repayment terms and certainly more personalized customer service.
How Does Refinancing Work?
The process is similar to refinancing your home – only much simpler. Just like a home refinance, you’re using a loan from another lender to pay off an existing loan, and doing so at a much more affordable interest rate. The point of refinancing is to get a better deal. A lower interest rate could result in hundreds of dollars in savings while a longer term may make paying off the debt easier
Divorce is not only emotionally difficult for you but it is also difficult for your financial condition. How?
When a marriage ends, individuals split assets and go separate ways. But, what happens to liabilities such as an auto loan?
In an ideal world, both the individuals assume the responsibility of the debts they created and part ways. Unfortunately, the reality is different. So, take care of debts after a divorce.
The Legal Liability of an Auto Loan
Do not believe that just because the divorce agreement holds your former spouse responsible for the auto loan, he/she will make regular payments. It is plausible that he/she may not make payments.
You must remember that the divorce agreement is separate from your loan contract. Lenders do not give importance to the divorce agreement. Your former spouse may be responsible for the loan in the eyes of a court. But, if you applied for a joint auto loan, lenders will hold you accountable for the loan as well.
How to manage an Auto Loan after Divorce?
It is important to remember that your marriage may be history, but a loan will continue to affect your present and future. Here’s how you can manage your auto loan and save your credit
Unless you will be paying full for the car you are considering of buying, you will surely need a car loan. However, with plenty of competing auto loan products in the market today, how will you choose the best? Well, experts have indeed provides some tips so you can get the best auto loan.
Things To Consider Before Making Your Final Choice
Interest rates for every car loan product – Basically, there are 2 types of interest rates applied for car loans. First is the fixed interest rate wherein rates are calculated every month depending on the total amount the client borrowed. Second is the reducing balance interest rate wherein rates are computed monthly basing it from the amount the client currently owes the bank. In some other banks, profit rate usually is computed by dividing the markup profit by the purchase cost.
Payment plan in every loan product – It is very crucial for a possible borrower to evaluate such payment plan as this allows the borrower to plan financially during the duration of the loan. In some countries, the maximum period for a loan is fixed at 6 years. There are also other banks offering borrowers the option to pay lesser
If you want to buy a car, you may have realised that:
>> You have some bad credit as a result of some issues in the past that are listed in your credit file; and
>> Your local bank branch has determined that you are not eligible for a car loan.
Do not worry. You are still eligible for a car loan because lenders/credit providers do provide second chance to people with bad credit. However, you will need to:
>> Show the lender/credit provider that you have improved your credit history; and
>> Have a reasonable explanation for any defaults listed in your credit file.
When you have bad credit, you need to put in extra efforts and ensure the lender/credit provider of regular payments. Here are five important tips that you should consider and which may benefit you:
1. Take the Time to Clean Up Your Credit File
This is the most obvious tip, which you can do on your own before applying for a car finance. Following are a few ways of cleaning up your credit file:
If you have any issues on your file that can be paid, you should pay them off as quickly as you can.
>> If you have any bad credit listings that
Are you having a bad credit history because you have not paid any of your previous loans, which you may have taken for buying a house, a car, machinery or anything else of value?
Have you been declared bankrupt?
If the answer to the above-mentioned questions is yes, and if you require a short-term instant cash loan to meet your most pressing needs at hand, then certainly it’s difficult for you to avail a short-term cash loan. Obviously, you won’t get an instant short-term cash loan from a bank or financial institution or any other institution if you’re having a bad credit history or have been declared bankrupt. So, where you should go to get the instant cash money that you so badly require for fulfilling responsibilities at hand. In such circumstances, the services of a car pawnbroker and moneylender come in handy.
How can a car pawnbroker and moneylender help to give you a short-term instant cash loan?
- Typically, a car pawnbroker and moneylender will not carry out any credit checks or background checks for approving the loan amount. They will also not ask for your bank statements or pay slips to approve the cash loan.
- You should possess any asset of value that
Auto loans are tricky. A single error can ruin your financial stability and earn you high interest rates in the future. So, it is important that you understand every aspect of the loan process and make a wise decision.
When it comes to analyzing the multiple aspects of an auto loan, loan term takes a backseat. If you are in the loan market and confused over choosing the perfect auto loan program, do not commit the mistake of ignoring the loan term.
What are the Different Auto Loan Terms offered by Lenders?
A couple of years ago, the recommended term offered by lenders was 5 years or 60 months. However, the time has changed. Today, you can easily obtain 8 years or 96 months loan. Also, there have been instances where you can keep making payments on an auto loan for 9 years or 108 months.
Is a Longer Auto Loan Term considered as a Boon for Bad Credit Car Buyers?
If you are a bad credit car buyer, you will obtain higher interest rates than a good credit car buyer. Lenders understand that higher interest rates will make monthly payments difficult for you. So, they provide longer loan terms to make monthly payments bearable.
So, you have a new automobile in mind, but you don’t have quite enough money on hand to pay for it in cash. It is time to take out an auto loan. Auto loans are a great way to help you get in the vehicle you want. The process of taking one out might be a little daunting, so here are some tips to help you with the procedure, from checking your credit score to finally driving home.
Before you begin visiting local car dealers to pick up the perfect vehicle, you should take a look at your credit score. This number will play a big role in whether or not you will be approved for an auto loan and at what rate. There are several websites that provide free credit reports to help keep you informed of your credit score. Find a site that is easy for you to navigate and use it to check your score often. Your credit score changes month to month, so your soft credit score might go up while you are looking at automobiles.
Determine Your Payment
After a home, an automobile is usually one of the biggest undertakings a person will assume. In order to
Americans love cars. It is one of the reasons why America is amongst the world’s top car-owning countries. Every year, Americans spend several thousand dollars on auto loan payments. If you are looking forward to buying a car, make sure that you follow S.M.A.R.T. tips. The tips will help you save money and ensure that you do not opt for exorbitant auto loans.
Follow the S.M.A.R.T. Tips and Save Money
When car buyers have to make a decision about auto loans, logic takes a backseat and emotions become a controlling factor. It is the reason why car buyers say yes to financially harmful auto loans. To save yourself from the possibility of a financial damage, you must follow the tips.
S – Specific
The car is a huge asset. So, it is essential that you understand your requirements before buying a car. It is important that you have a specific image of the type of the car that you want. It will help you stay away from an impulse purchase. Consider the list of following factors because it will help you in choosing your perfect car:
1. Total number of passengers
2. Gearbox – Automatic or manual gearbox?
3. Cargo capacity
4. Vehicle performance
5. Driving conditions
6. Gas mileage
Rome was not built in a day.
Every perfect thing requires time. And, finding a perfect car requires a lot of time and patience because you have to find the right combination of beauty and technology. Won’t you feel irritated if lenders reject your car and all your hard work goes to waste?
Why will Lenders reject your Car?
If you want to buy your chosen car quickly, you must know about the kinds of cars that are rejected by lenders. It will help you in making a decision and ensure quick completion of the buying process.
Extremely Cheap Cars
Today, the car prices have become obnoxious because of rising inflation and increased government regulation. Finding a car that is within your budget can be a difficult task. But, if you manage to find an extremely cheap car, don’t think lenders will be happy. They will avoid financing because of the following reasons:
1. Cheap cars are damaged or totaled.
2. Usually, they are very old to function.
Also, lenders make a profit from the interest amount that you pay. If they approve a cheap car, they will not be able to generate enough profit from the interest amount. So, they avoid financing an extremely cheap car.
“People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.” – George Orwell
Military personnel work hard and sacrifice their life for the safety and freedom of the nation. They spend several days in training as well as several months on deployment. If you are part of the United States Armed Forces, you will want to ensure the comfort of your family before going away for months.
When you want to fulfil the needs of your family, do not forget buying a car. It will ensure a comfortable and safe commute for your family. If you want a car for your family, you need to obtain an auto loan to take care of the buying process.
Lenders at your Service!
Lenders provide special military auto loans to military personnel. Do not worry if you are not serving on active duty. There are many lenders who offer incentives and benefits even when you are in Reserve or National Guard.
What are the Benefits of obtaining Military Auto Loans?
If you are in the military, you can enjoy the following benefits:
1. Low interest rate
2. Longer loan term
3. Higher Loan-to-Value ratio
4. Expedited loan approval process
5. Lenient approval criteria
The major chunk of the driving population comprises of senior citizen and retirees. Some require a car to fuel their leisure needs, while others acquire it as a reward for the long years of hard work. Car financing help you not only in saving your substantial fixed income, but they also act as a medium to procure your car faster as against buying a car with cash. However, the benefits of car financing are far greater than that.
What is the Key Benefit of applying for Car Financing?
Enables you to buy a newer car
Whenever any amount is spent on repair of an old car, it usually burns a hole in your pocket before it needs mending again. With the help of car financing, you can quit spending on repairing and invest the same money into a newer car that will run for a longer period. The best part about it is that the cost is spread over a longer time frame, making it easier to pay. Also, to add to it, planning of finance is in check so you know exactly the amount of payments left for the loan to be repaid.
How can you obtain Car Financing if you are a
When you’re buying a new or used car, people typically go straight to the local dealership. While dealerships make their own financing programs sound especially attractive, it’s always to your benefit to shop around for the best auto loan rates-starting with local credit unions. Here are some reasons why you’ll find better auto loan rates and more personalized service at a credit union.
You have a much better chance of getting your loan approved if you have second-rate credit or have had some credit problems in the past. They will more likely listen to your personal story over a traditional commercial bank.
A credit union is different than a traditional bank or other lending institution. They offer loans and other financial services to people through a cooperative membership and it is much more than just a place to house a checking or savings account. They show their members financial interest as a high priority and they are not in business to sell their members anything just to inflate loan volumes. Best of all, their profits go back to their members in the form of lower rates on other products and services like savings and loans. There are 377 credit unions in California