Get an Auto Loan the Smart Way

Get an Auto Loan the Smart Way

Did you know that most people pay hundreds or thousands of dollars more on auto loans than they have to? Get an auto loan the smart way. Read on.



Most people really get taken for a ride on their auto loan. Did you know that differences in the total cost of different auto loans can run into a thousand dollars or more? Here’s how you can get the lowest rate:


Make a list of different auto loan lenders and their interest rates and terms, before you go to the dealer (the web is usually the easiest way to do that). Did you know dealers get a commission on the loans they refer? If you’re not careful, that extra bit of money for the lender could mean you pay a higher rate than you would if you got the loan yourself.


Get a credit report and figure out your FICO scores. Removing any incorrect negative information from your report will help you get a better deal. Knowing exactly what your score is will help you figure out what interest rate you can realistically get.


Have bad credit? Try going to your credit union, bank or another institution where you have a relationship. Lenders like to help out established customers. If your bank still won’t help, online "bad credit auto loan" lenders usually offer better less expensive loans than dealers who advertise their great deals for people with poor credit.


Use a vehicle loan calculator. It will tell you what your loan will cost each month. It saves you the time of looking at vehicles you can’t afford, makes you aware of what information you’ll need to apply for a loan, and is a "reality check" of your financial condition.

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Comparison shop, comparison shop, comparison shop. You don’t get the least expensive car by choosing a dealer at random, and you won’t get the least expensive auto loan that way, either.

Start researching your options now:

Get credit reports and FICO scores here:

Use this vehicle loan calculator:

Comparison shop among these lenders:

Improving Your Financial Situation With Investments and Business Ideas

Improving Your Financial Situation With Investments and Business Ideas

With financial information and virtual business transactions just a click away, people are finding themselves more financially savvy and in the know on how to fatten up their financial portfolios.

While most people rely on banks and properties to secure their retirement days, others who are smart enough and worldly enough with the affairs of the green buck opt for more lucrative financing opportunities. They do not just let their money sit idly inside a bank vault and wait for the interest to add up. A few actually roll their money and invest them in the high stakes of stocks, bonds and currency.

Stocks can be very risky but if you start small and give yourself time to get the hang of it, you may enjoy it and may even discover that you have the gift of foresight. Watch for stocks that are just on the rise. These are often companies that are very promising. Their value will still be relatively small compared to blue chips so you really don’t have to shell out much. If you want to risk more, you can actually buy blue chips or those stocks that established companies offer to the public. Examples are Microsoft and Dell.

Bonds on the other hand may have modest returns but they are probably the best and most secure of financial investments. Bonds come highly recommended and should not be absent in any financial portfolio.

Currencies are trickier to deal with as their value are affected by so many forces, local or within the country involved, regional and global. Though banks also offer currencies, most have high exchange rates. Others just buy but they do not sell, choosing to keep the currencies within the financing institution.

Debt is perhaps the single worst thing that you can do to damage your financial portfolio. Do not get the wrong idea, debt can be good when used the right way. In fact, successful businessmen have debts too. This is because they have their money tied up in other ventures that have a higher return of investments than the interest of the loans. After all, you cannot make money without having some money to begin with. So, if you feel that you can yield more money using the money that you got from a loan, then by all means, get a loan!

What should be avoided are debts that come from credit cards. Credit cards hold the highest interest rates in debts perhaps because the whole debt business is risky. Getting into deep credit card debt can mean paying a lifetime for the interest without even touching the principal. It is important that when you use the credit card, make sure that you pay on time and that you pay for the whole amount. Otherwise, you would find yourself slowly falling into a financial trap.

It will be risky but the fastest way you can earn big money is to venture on a business. Even something as small as operating a cafeteria in a factory or school or engage in buying and selling of goods over the Internet, can be a great start. With the advent of technology, it is even easier now than before, not to mention faster, to conduct financing and business transactions. You don’t even have to meet face to face. You just have to learn to communicate through emails and mobile phones.

This is not intended to give financial advice and professional advice is suggested before investing.

How To Plan For A Successful Home Loan Mortgage Refinance

How To Plan For A Successful Home Loan Mortgage Refinance

Why should you refinance your home loan?
Won’t getting a new mortgage cost you more instead of less?
How can you save money on your home loan and avoid getting further into debt?

Most activities that are worth your time require time, effort and lots of planning. That works for weddings, having a baby, finding a new job and of course refinancing your home loan or mortgage. The consequences of not planning well when dealing with important activities are obvious. Your wedding can flop, you may not be able to afford what your baby needs, not make the interview selection and more to the point lose money on your home loan or mortgage.

The good news.
The good news for home refinancing is that interest rates have rarely if ever been so good for refinancing. Interest rates are now firmly below the 5% level even on the most conservative interest rates models. If you arranged your mortgage recently or your interest rates were not very competitive you could be in for some surprising savings.

The bad news.
The interest rates may be at record lows but it has never been so difficult to get your home loan or mortgage credit approved. Home loan and mortgage providers have been burnt too often with borrowers who can’t pay or won’t pay their debts and are making sure you are the real deal.

What Does Debt Consolidation Mean

What Does Debt Consolidation Mean?

The act of combining several loans or liabilities into one loan. Debt consolidation involves taking out a new loan to pay off a number of other debts. Most people who consolidate their debt usually do it to attain a lower interest rate, or the simplicity of a single loan.

Also known as a "consolidation loan".

This is common among companies or people with credit problems (maxed-out credit cards, car loans, student loans, etc.), who combine all of their debts into one loan to create greater ease in repayment. In the case of credit card debt, this can often be advantageous because credit cards generally carry a high interest rate.

What Does Debt Consolidation Mean

What Does Debt Consolidation Mean?

The act of combining several loans or liabilities into one loan. Debt consolidation involves taking out a new loan to pay off a number of other debts. Most people who consolidate their debt usually do it to attain a lower interest rate, or the simplicity of a single loan.

Also known as a "consolidation loan".

This is common among companies or people with credit problems (maxed-out credit cards, car loans, student loans, etc.), who combine all of their debts into one loan to create greater ease in repayment. In the case of credit card debt, this can often be advantageous because credit cards generally carry a high interest rate.

BUY A CAR WITH BAD CREDIT

Do you want to Buy a Car with Bad Credit then go to http://www.autoloanslocators.com

Following are some of the FAQ's that may solve your problem:

Q:
"Hello, I have found the vehicle that I wish to purchase, but am having trouble securing an bad credit auto loan if not purchasing from a franchise dealership. The dealer that I wish to buy from is licensed, but it is a private dealership. Can you help?"

A:
The lenders within our network are indirect lenders. That is to say they only provide loans through their dealer partners. In your case we would be limited to the lenders available to the independent dealership that you mentioned.

Q:
"I have a question regarding a local dealer. I have a car picked out but I'm not sure how your loan process works. If I get approved do I have to use a specific dealer or can I go to the one I already am interested in?"

A:
We work within a network of indirect lenders. Your local dealer would actually be the one processing your loan. If you are looking for a lender that would provide funds for you to purchase from the specific dealer you mentioned you should search for a direct lender or let the specific dealer process your loan. We have not had success finding a direct lender that does a decent job with bad credit financing nor have we had luck convincing dealers outside of our network to sign up with the indirect lenders that do a good job lending to people with credit problems.

Q:
"I would like to know what credit reporting agency you use to pull credit reports. Also, is there a minimum beacon score you must have to qualify for a loan? I do not want to pull my credit report if not necessary."

A:
The authorized dealer in your area will generate a credit inquiry to determine which lender programs you qualify for. The reporting agency used varies by location. Also, the lender that your application is submitted to will also generate an inquiry. Most lenders now use a service that merges all three major credit reports. The authorized dealer in your area has access to lenders that ignore the credit score on the credit report. If your score is less than 525 (average), however, your auto loan request would be limited to these lenders.

Q:
"Can a person who has filed for bankruptcy, still get an auto loan? And if so, how long must a person wait after filing chapter 7 before they can get an auto?"

A:
In some cases you are eligible for financing after the initial meeting of your creditors (341 meeting, first court date). In every case you are eligible immediately after the bankruptcy is discharged.

Q:
"A dealer called me to say that I could be financed there. Are my choices limited to one dealer? I have a bankruptcy discharged in May and want to reestablish credit but do not want more queries on report."

A:
For quality control and monitoring we limit the number of dealers in each area. We do have multiple dealers in most major metro markets. In either case your loan request is processed by the closest dealer. In the past we listed the dealerships name, phone number, and contact person on the site. Unfortunately we had to remove them after receiving numerous complaints from our special finance managers within the dealerships that they were receiving far to many telemarketing calls from online marketing companies.

Q:
"I would like to apply for a loan for a purchase at a local non-franchised dealer. Will this be a problem?"

A:
If you apply with us we cannot process you loan though every car dealer. Our dealer network is limited to maintain the quality of our service. Provide us with the name of the dealership and we'll let you know if they are part of our network. Nationwide, however, we only have a handful of independent dealers within our network.

Q:
"My credit score is 534 with a voluntary repo. I will have a co signer with a cosigner with a score of 550. I am willing to put money down but need 30 days to come up with it. I need to get the vehicle today."

A:
The information provided is not enough to determine if you would qualify for a loan. As far as the down payment, differed down payments (30 days) have to be disclosed on the finance contract to comply with the Truth in Lending Act. If it is not it is considered an attempt to deceive the lender. Most lenders do not allow differed down payments. Based on the information you provided I would guess that you would not qualify for a zero down payment program.

Q:
"I wanted to know if you do in home financing and if so what are the requirements. I don't have good credit."

A:
We do not originate loans. Most lenders that provide financing for people with sub-prime credit are indirect lenders and only purchase finance contracts from licensed auto dealers. There is not a lending program that offers Direct Loans to people with high risk credit that we recommend.

Q:
"Do you have any no money down loans that would require not even tags and taxes to be given at time of purchase? My son is 18 and has no credit and needs a car but we don't really have tax or tag money."

A:
There are no money down programs. It is unlikely that your son would qualify by himself. If he applies on his own he would most likely fall into a First Time Buyer program. Most FTB programs require at least 15% of the sale price, not including taxes. If a parent with fair credit was listed as a co-buyer you should qualify for a zero down program.

Q:
"Do you finance 100% on a new vehicle? I don't have money for a down payment."

A:
There are zero down payment lending programs. You may also qualify for lending programs that require a down payment if you are purchasing a new car with a rebate or you have a trade in, regardless of it's condition.

Q:
"We had a discharged bankruptcy last August. How to I find dealerships that help people with past credit problems. I know our credit has improved a lot since last year."

A:
You can apply online and your application will be processed by a dealership in your area that specializes in financing after bankruptcy. If you would like to apply directly with the dealership please email us your zip code and we will send you the contact information for the local dealer.

AUTO LOAN FAQ

Why is a credit profile important ?

To the financier your credit profile is the most important factor he will consider before funding you. Your credit profile tells him if you are able to and intend to pay back the loan to him.

What are the specific components of my credit profile ?

The components are age, profession or occupation, income and financials, previous credit history and your home, ie, if you live in a rented accommodation or in your own home.

What can I do if my credit profile does not match the financier's requirements ?

If your credit profile does not match the financier's requirement you can strengthen it by bringing in a co-applicant or guarantor who would be able to match the requirement.

How to improve your credit profile ?

If you are salaried and over 60 years of age it is unlikely that you will be financed based only on your profile, most financiers would insist that you bring an additional guarantor or co-applicant whose age is less than 60. It would be better for you to take one of your immediate relatives (son, husband, wife, daughter ) as co-applicant. The age limit for self employed is 65 years.

If you are self employed and your income is between Rs. 45,000 p.a. and Rs. 60,000 p.a., it is unlikely that you will be financed based only on your profile. Most financiers would insist that you bring an additional guarantor or co-applicant whose income added with yours is greater than Rs. 60,000 p.a. It would be better for you to take one of your immediate relatives (son, husband, wife, daughter ) as co-applicant. If you are salaried the minimum income is normally Rs. 100,000 p.a.

If you have been in employment for less than 1 year and total number of years in service is less than 3 years it is unlikely that you will be financed based only on your profile. Most financiers would insist that you bring an additional guarantor or co- applicant whose years in service match the requirement. It would be better for you to take one of your immediate relatives (son, husband, wife, daughter ) as co-applicant. If you are salaried the minimum income is normally Rs. 100,000 p.a.

How much finance are you eligible for ?

The quantum of finance you can get depends on your income, your ability to repay and the financier's LTV norms for the car.

What documents do I need to establish proof of income ?

For income, most financiers look at your IT returns for the last two years. Financiers also look at the nature of income. Some of them do not consider speculative income (especially from the stock market), rental or agricultural income. Some financiers discount such income by up to 50% in their workings.

What are the pre-conditions on the amount I earn and its relation to the amount of finance I can usually get ?

Generally, if you have an income of Rs. 60,000 p.a. not including speculative / non- recurring income, most financiers would fund you 80 % - 90 % of the value of a small car. Similarly, if you have an income of Rs 100,000 p.a., again, not including speculative / non-recurring income, most financiers would fund you 75 % - 85 % of a premium car.

Do loans previously taken play a role in determining the amount of finance I can get now ?

Yes they do. Fixed obligations such as an earlier loan or certain deductions in the case of salaried people are normally removed from the income by most financiers before determining the finance amount.

What are Negative Areas and Negative Credit Profiles ?

Most financiers have an internal list of geographical areas and professions / business/ companies that are created based on their previous credit experience. Loans for customers from such areas or with such profiles may be rejected or may be more closely scrutinised before approval.

Can I get car finance without submission of income documents ?

Yes, you can, under the No Income Proof scheme offered by some financiers.

Can I get finance for accessories ?

Most financiers do not finance accessories other than those which are factory fitted like air-conditioners. Some may fund music systems and such other expensive accessories.

Can I get finance for Insurance and Registration ?

Most financiers do not fund insurance and registration. The LTV is worked out on the ex-showroom price of the car and does not include insurance and registration charges.

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Interest Rate

What is the difference between a Flat interest rate and a Reducing Balance interest rate ?

Take a simple example. Suppose you have taken a loan of Rs. 5 Lakh at 10% interest. You repay Rs. 25,000 in the first instalment. If the 10% interest continues to be applicable on Rs. 5 lakh after your first repayment, you are paying a "Flat Interest Rate". But, if 10% interest is applicable now on Rs 4.75 Lakh, you are paying a "Reduced Balance Interest Rate".

What is a 0% interest scheme ?

In this scheme you are not charged any interest. You only pay back the principal amount. However, be careful to check out the hidden costs under such schemes. There are some disadvantages in this scheme - the amounts financed are low and the tenure is short.

Why is the interest rate higher for a used car ?

A used car carries a higher Asset Risk than a new car. Therefore, interest rates on used car rates are higher.

Is it better to go to my current financier ?

Yes, if you have a very good repayment record for an earlier transaction, you are most likely to get a lower lending rate. Even your loan processing could be faster. However, do check out some competitive offers before taking a final decision.

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Repayments

What is a default ?

Repeated prolonged delays and dishonoured cheques are deemed to be defaults in repaying your loan. Most financiers would expect you to turn in the asset on request, failing which they may seize your car, after serving you proper notice.

What happens if my cheque bounces ?

Dishonouring a cheque is a criminal offence. Legal proceedings may be initiated against you. Your credit profile could be seriously damaged.

What happens if I delay some instalments ?

You are advised not to delay your instalments because frequent delays may affect your credit profile and might make further borrowing difficult and costly. However, under rare circumstances, if you delay an instalment, most financiers would charge you a delayed payment charge, which could be as high as 3 %, compounded monthly. This could be twice the rate at which you borrowed.

Can I get a temporary relief from paying my instalments ?

Yes, in some cases you can, if you inform your financier in advance. This should only be for a few days and you will have to pay delayed payment charges.

Can I Pre-close or Pre-pay a loan ?

Yes, you can, but conditions apply. Please refer the section on Pre-Closure.

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Insurance

What happens if the car meets with an accident ?

In the event of an accident you will have to inform your insurance company /agent. They will send an assessor to assess the damage to the car. The insurance company will process your claim and pay it directly to the financier, unless you have taken an NOC from the financier, in which case the payment will be made by the insurance company in your favour. The financier will normally give an NOC if you are regular in your payments. In case of a complete loss, the financier would receive the payment directly from the insurance company.

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General

What is an Exchange Scheme ?

Some dealers may offer you an exchange scheme whereby your existing car can be upgraded to a new one. The dealer will purchase your car at a price depending on the model, year and the condition of the car. The value of your old car is then adjusted against the purchase price of the new car. You could also get the balance amount financed.

Can I sell the car during the tenure of the finance contract ?

No, you cannot sell the car unless you repay the loan. An NOC is required from the financier before you can sell the car.

What happens when the loan is fully paid off ?

After the loan has been fully paid off, the financier will issue Form 35 with a covering letter (NOC) to the RTO for cancelling their name from the R/C book. A similar NOC will be issued to the insurance company requesting for the deletion of their name from the policy.

What is De-Dupe ?

Most financiers have compiled a list of defaulters, their own, as well as from other available sources. Details of all clients are run through this list to check if the same client had applied for a loan and if yes, the file is rejected.

WHAT IS HOME REFINANCING?

When an owner obtains a new first mortgage on his real estate, the homeowner has undergone a home refinancing. Simply put, think of home refinancing as trading in an old first mortgage for a new first mortgage.

To refinance a home, the homeowner must apply for a new mortgage. During the application process, the subject home will undergo a new appraisal to determine its value, and the homeowner's credit file will be reviewed. The lender will also order a title report on the property to search for any other liens that may appear. Assuming all these items meet with the lender's approval, the loan will be approved.

Once approved, the homeowner will meet typically at the office of the lender or title company to sign the new mortgage. The proceeds of the new loan will be used to pay off the old first mortgage as well as any additional mortgages and liens on the property. Accordingly, the only mortgage showing on the home after the refinance will be the new loan itself.

Homeowners frequently seek to refinance their home when interest rates fall below the rate they had on their mortgage when they first bought their home. For instance, if a homeowner had a 30-year mortgage at 8% and a loan of $100,000.00, it would be wise to seek a refinance if the interest rates fell to 6%. The savings in such a situation would be $134.00 per month. Over the life of the loan, the savings could reach a total of $48,240.00. If the loan was for $200,000.00, the monthly savings would be $268.00, an almost $100,000.00 savings over the life of the loan. Accordingly, when determining if it is worthwhile to refinance a home, the homeowner should weigh the long term savings against the costs involved in the refinance and the length of time the homeowner intends to stay at the home to insure that the refinance is worthwhile.

Costs typically involved in a refinance include: points, document preparation fees, tax service fees, title expenses, appraisal fees, and other lender's costs. Of these, the "points" are typically the most expensive. Using the $100,000 loan example again, for a refinanced loan with one point (1%), the homeowner would pay a fee of $1,000.00 to secure the loan. If two points (2%) are being paid, then the homeowner would pay $2,000.

It is wise to consult an attorney or real estate agent when considering a refinance as these professionals have many good insights to offer.

Credit for this article goes to www.wisegeek.com

WHAT IS HOME EQUITY DEBT?

A home equity loan or line of credit allows you to borrow money, using your home's equity as collateral.

Collateral is property that you pledge as a guarantee that you will repay a debt. If you don't repay the debt, the lender can take your collateral and sell it to get its money back. With a home equity loan or line of credit, you pledge your home as collateral. You can lose the home and be forced to move out if you don't repay the debt.

Equity is the difference between how much the home is worth and how much you owe on the mortgage (or mortgages, if you have more than one on the property).

Example:

Let's say you buy a house for $200,000. You make a down payment of $20,000 and borrow $180,000. The day you buy the house, your equity is the same as the down payment -- $20,000: $200,000 (home's purchase price) - $180,000 (amount owed) = $20,000 (equity).

Fast-forward five years. You have been making your monthly payments faithfully, and have paid down $13,000 of the mortgage debt, so you owe $167,000. During the same time, the value of the house has increased. Now it is worth $300,000. Your equity is $133,000: $300,000 (home's current appraised value) - $167,000 (amount owed) = $133,000 (equity).

A home equity loan (or line of credit) is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, college education or other expenses.

There are two types of home equity debt: home equity loans and home equity lines of credit, also known as HELOCs. Both are sometimes referred to as second mortgages, because they are secured by your property, just like the original, or primary, mortgage.

A home equity loan is a one-time lump sum that is paid off over a set amount of time, with a fixed interest rate and the same payments each month. Once you get the money, you cannot borrow further from the loan.

A home equity line of credit, or HELOC, works more like a credit card because it has a revolving balance. A HELOC allows you to borrow up to a certain amount for the life of the loan -- a time limit set by the lender. During that time, you can withdraw money as you need it. As you pay off the principal, you can use the credit again, like a credit card.

Home equity loans and lines of credit usually are repaid in a shorter period than first mortgages. Most commonly, mortgages are set up to be repaid over 30 years. Equity loans and lines of credit often have a repayment period of 15 years, although it might be as short as five and as long as 30 years.

Example:

Let's say you have a $10,000 line of credit. You borrow $5,000 to pay for new kitchen cabinets. At that point, you owe the $5,000 you borrowed, and you have $5,000 remaining in your credit line, meaning that you could borrow another $5,000.

Instead of borrowing more from the line of credit, you pay back $3,000. At this point, you still owe $2,000, and you have $8,000 in available credit.

A HELOC gives you more flexibility than a fixed-rate home equity loan. It also is possible to remain in debt with a home equity loan, paying only interest and not paying down principal.

A line of credit has a variable interest rate that fluctuates over the life of the loan. Payments vary depending on the interest rate, the amount owed and whether the credit line is in the draw period or the repayment period.

During the equity line's draw period, you can borrow against it and the minimum monthly payments cover only the interest, although you can elect to pay principal.

During the repayment period, you can't add new debt and must repay the balance over the remaining life of the loan.

The draw period often is five or 10 years, and the repayment period typically is 10 or 15 years. Those are generalizations, and each lender can set its own draw and repayment periods. Lenders have been known to have draw periods of nine years, six months, and repayment periods of 20 years. Bankrate surveys home equity line of credit lenders for their current rates.

A line of credit is accessed by check, credit card or electronic transfer ordered by phone. Lenders often require you to take an initial advance when you set up the loan, withdraw a minimum amount each time you dip into it and keep a minimum amount outstanding.

With either a home equity loan or a line of credit, you have to pay off the balance when you sell the house.

Credit for this article goes to www.bankrate.com