March 19, 2014 By

Compare and Save – Be Loan Conscious

How to Apply

Borrowers should take several factors into account, including the loan period, interest rate, and down payment. As a rule, the interest rate is lower if you make a sizeable down payment. The term usually varies between 3 and 6 years. Whether you choose a short- or long-term loan depends on your income level, financial goals, and other factors. If you are self-employed, you may have to present your individual income tax returns and other documents. It is important to have accurate financial statements. The main goal is to check whether you are a risky borrower.

There are different lenders to choose from, including online banks and brick-and-mortar lenders. The application process may take several weeks. There are different online tools that calculate the monthly payment and help customers to make a decision. Enter the start date, term, interest rate, and any extra payments. This is a good tool to find out whether you will be able to meet your monthly payments. percent

Financial institutions advertise auto loans with affordable monthly payments, flexible repayment terms, and competitive interest rates. They are offered by car dealerships, banks, and credit unions, and the terms, interest rates, and repayment options vary.

Borrowers can choose from secured and unsecured auto loans with a fixed or variable interest rate. Borrowers who opt for a secured loan benefit from longer terms and competitive rates. The vehicle to be financed serves as collateral, and the bank can repossess it in case of default. Banks also offer unsecured loans to borrowers with a very good or excellent credit. The terms vary depending on your credit score and type of vehicle, e.g. car, ATV, snowmobile, jet ski, etc. Generally, your credit rating is the most important factor for banks. If your credit score is tarnished, your application may be declined. Depending on your credit score, you may need a cosigner. Finding a cosigner helps borrowers with poor credit to get approved. Another option is to apply for a loan through a car dealership, but the interest rate is usually higher compared to banks and credit unions.

The interest rate also varies depending on the repayment term, i.e. 36 months, 48 months, 60 months, etc. There are also refinance options with different interest rates and repayment schedules.

Filed Under: Loans Tagged With: ,
February 12, 2014 By

Car Loans Offered by Dealerships, Banks, and Captive Finance Companies

The main benefits of short-term loans are the lower cost of borrowing and ownership and the shorter repayment term. When it comes to downsides, experts usually list the high monthly payments, but borrowers pay less in interest charges during the loan term. Borrowers can choose from different types of arrangements, depending on their circumstances, interest rate, amount required, and other considerations. Commercial hire purchases, finance leases, and conventional loans are available and have their pros and cons. Car loans are offered by banks, credit unions, finance companies, car dealerships, and other parties. Borrowers can choose from different options, including chattel mortgages, conventional loans, operating leases, finance leases, andSupercar others. The main types of financing to consider include new and used car loans.

Conventional loans, for example, feature flexible repayment schedules and terms, competitive variable or fixed interest rates, and more. A chattel mortgage is a type of financing that comes with tax deductible interest rates and flexible contract terms. The minimal capital outlay is one advantage. There are also home equity and pre-computed loans, and the latter is an example of financing whereby the principal payments and interest charges are pre-calculated. Early repayments are not allowed if you choose to apply for a pre-computed loan. In addition, borrowers can choose from long-term and short-term auto loans, both of which have beneficial features and downsides.

Online Calculators

Obviously, you will pay less for an older vehicle. The decision to buy a used or new vehicle depends on different factors, including the cost of the vehicle, brand, and others. There are online calculators that help borrowers to make a decision, depending on whether they take into account factors such as depreciation and their driving preferences. Other online calculators help calculate the monthly payment based on factors such as the term, APR, sales tax, trade-in value, down payment, and price.

Consider factors such as the total amount paid and amount financed, the monthly payment, term, and interest rate. Your credit score is also an important factor, and you may need a qualified cosigner if your score is poor or less than perfect. Financial institutions look at your income, payment history, and type of vehicle. The interest rate on used vehicles is usually higher than for new cars. Look for loans with rebates and competitive interest rates. Regardless of whether you choose a new or used car loan, read the terms and check for hidden charges and prepayment penalties. Examples of hidden charges include fees and credit insurance.

Documents Required

Personal loans cannot be used to finance the purchase of commercial vehicles. Usually, banks require documents such as proof of residence, proof of identity, and proof of insurance and income, as well as your trade-in documentation. The maximum age of the vehicle to be financed varies from lender to lender, but it is usually 10 years.

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Filed Under: Credit, Loans Tagged With: , ,
January 6, 2014 By

The Pros and Cons of New and Used Car Loans

Both new and used car loans have benefits and disadvantages, but the terms depend on the borrower’s credit score, the brand and age of the vehicle, the lender, and so on.

New vs. Used Car Loans

The main benefit is that borrowers are offered affordable interest rates. In some cases, the interest rate on used car loans is almost double. This means that borrowers pay hundreds and even thousands of dollars in interest charges. The reason is that old car buyers usually have a fair or poor credit and are offered a higher interest rate. Reports show that borrowers who seek to finance the purchase of a new car have a credit score of 749 on average. The average credit score of used car buyers is around 660.

At the same time, finance experts claim that buying a used car is a better choice. The reason is that old vehicles depreciate at a slower pace compared to new cars. Thus, borrowers who opt for a new vehicle make interest payments on an asset that depreciates at a quick pace. Whether to buy a new or used vehicle depends on different factors, and one is whether the borrower intends to use it as collateral.

When it comes to interest charges, a sizeable down payment means a lower interest rate, whether you plan to finance the purchase of an old or new vehicle.

Auto Loans from Online Banks

Applying online saves money, effort, and time. There is a lot of competition between online lenders, and borrowers benefit from affordable interest rates. Because of the tight competition, providers feature low interest rates to attract clients. They are able to do so because lenders save on overheads. Their administrative and operational expenses are lower compared to brick-and-mortar banks. What is more, a pre-approval from an online lender gives buyers more bargaining power. Pre-approval makes sense because you know the costs and how much you can afford. Moreover, this allows you to negotiate with financial institutions as a cash buyer regardless of whether you are looking for a new or used car loan.

Differences between Refinancing and Applying for a Loan

Whether you plan to buy a new or used car, there is a difference between financing and refinancing. The interest rate is the main difference. When you refinance and are offered a lower interest rate, your monthly payments become more affordable. A lower monthly payment means that you will be able to repay the outstanding balance quicker provided that there are no prepayment penalties. Another option is to ask the financial institution to lengthen the term and thus lower the monthly payments.

Filed Under: Banking, Loans Tagged With: , ,