April 25, 2010 at 2:58 am
- Posted by: admin under Refinance Car Loan
- Tags: Auto Loans, Auto Title Loans, Automobile, Car Loans, Car Title Loan, Car Title Loans, Cash Advance Loans, Cash Loans, Cash Payday Loans, Circumstances, Collateral, Fraction, High Interest Rates, Loan Amounts, Municipalities, Payday Loan, Proceeds, Sorts, Unsecured Loans, Variation
Payday loans have received a lot of negative press lately as states and municipalities try to regulate an industry that legally lends small amounts of money at interest rates that can reach a breathtaking 1000% per year. A less well-publicized variation on the payday loan is the car title loan, which requires the borrower to provide his or her automobile as collateral for the loan amount. While this type of loan is not as widely publicized as the payday loan, the car title loan is even more dangerous, as it could cost the borrower their car!
Payday loans, also known as cash advance loans, are unsecured loans. The lender trusts the borrower to pay back the money within two weeks. This type of loan is risky for the lender, but that risk is more than offset by the high interest rates charged for the loans, which can easily top 400% on an annualized basis.
A car title loan works differently, however. With this type of loan, the borrower offers his or her car as collateral and is often asked to provide a spare set of keys when the loan is granted. Should he or she default on the loan, the car will be forfeited and sold to repay it. In some states, the lender may sell the car and keep all of the proceeds from the sale, even if they exceed the value of the loan.
With collateral, one would think that the interest rates for such loans would be far less than for payday loans, but that is not the case. Nationally, interest rates for auto title loans average about 300% per year, which hardly makes the loans a bargain. In addition, the loan amounts rarely represent more than a fraction of the value of the vehicle. A loan of even half the vehicle’s value would be regarded in the industry as quite generous.
The same sorts of problems that occur with payday loans also happen with title loans. The borrower is often unable to repay on time and must extend the loan by paying an additional fee. Under some circumstances, it is possible for the fees to eventually exceed the value of the loan itself. And unlike other loans, the borrower is under pressure to avoid losing their car.
This type of loan is overwhelmingly weighted in favor of the lender, who will end up with something of far greater value than the loan should the borrower forfeit. Those who have short-term cashflow needs would be well advised to borrow from friends, relatives or a credit card instead.
By: Charles Essmeier
April 23, 2010 at 10:20 pm
- Posted by: admin under Refinance Car Loan
- Tags: Auto Finance Companies, Auto Loans, Auto Refinancing, Bad Credit History, Car Loan With Bad Credit, Co Signer, Cold Weather, Credit Car, Credit Loans, Credit Reporting Agency, Credit Students, Getting A Car Loan With Bad Credit, Loan Companies, Loan With Bad Credit, New Job, No Credit Car Loans, Poor Credit, Public Transportation, Student Car, Student Loans
Are you sick of public transportation? Perhaps you are tired of having to walk to class in wet, cold weather? Maybe you need a car to get to and from a new job that you just started. If you are a student seeking an easier means of getting around, there is answer! You can apply for a student car loan, even if you have no credit or bad credit!
Student car loans have two major advantages!
1) Buying a car will help eliminate all of your no-transportation headaches!
2) Utilizing a car loan to purchase a new car will help build your no credit or bad credit history into a positive one. Every monthly payment you make for your car loan will be reported to every major credit reporting agency.
I have no credit. How am I going to get approved for an auto loan?
With most car loan companies, being young and having no credit is not a factor when it comes to granting approvals. How come? Because a car loan is a secured type of loan. The lenders are protected by the fact that if your loan goes into default, they get your car.
What about bad credit? How do students get approved for a car loan with poor credit?
Same thing as getting approved for financing with no credit! Students with bad credit should not have a problem getting a car loan with bad credit because the lenders are protected; you don’t pay, you lose the car!
What about interest rates? What can one expect with poor credit? What kind of rates are associated with no credit car loans?
The interest rates related with bad credit student financing will tend to be a little bit higher than interest associated with no credit student loans. No credit loans with be slightly higher than interest rates for student with good credit. However, no matter what your credit is, if you make your payments in full and on time, in about one year you can apply for auto refinancing and achieve a lower interest rate for your car loan.
Do students need a co-signer when applying for college student auto loans?
Typically, auto finance companies will not require a co-signer for loans up to $25,000. If you are a student, there is no need to have a car loan for an automobile that costs more than $25,000.
What about buying? Do I need to buy from a dealer? Can I buy from a private seller?There are only a few auto loan companies that offer the flexibility of being able to purchase from anyone you want. Most finance companies work directly with dealers, often only with franchised dealers. However, dealers will work with you to find any make or model of new or used car that you are looking for.
Getting a student car loan is not a hard thing to do. In fact, as outlined above, it is pretty simple! Just make sure you make your car loan payments in full and on time, every month!
By: Jacob Andrews
April 15, 2010 at 1:07 pm
- Posted by: admin under Refinance Car Loan
- Tags: Auto Loan Lenders, Auto Loans, Buying A Used Car, Car Dealership, Car Financing, Car History, Car Owner, Credit History, Eight Months, Hidden Surprises, Loan Application, Loan Financing, Loan Term, New Auto, New Car Loans, Person To Person, Private Auto, Private Party, Repayment Schedules, Same Time Period
Buying a used car directly from an owner will get you a much better deal than you would get from a car dealership. This is especially true in cases where the car owner and the car history are well known to the buyer. It eliminates the possibility of hidden surprises. On the whole, private auto loans have a lot in common with other methods of car financing. However there are also certain differences that can be important when deciding to purchase a car.
Higher Rates For Used Cars
When it comes to used cars, the rates for person-to-person or private auto loans invariably prove to be higher than those for a new car. To take an example, rates for private party sale auto loans from online auto loan lenders will usually be about two points higher compared to what is charged for traditional new auto loans and about one and a half points higher than the interest rate being charged for used car loans for vehicles purchased from dealerships. Moreover, the rates will fluctuate according to your credit history and other aspects concerning your loan application while new car loans from dealerships usually have fixed rates providing you qualify for them.
Repayment Schedules
Loan term may be less than that of a new car. The standard duration for financing a new car can be up to seventy-two months. In the case of private auto loans, it may not be possible to finance a vehicle for the same time period. Usually lenders are ready to finance private auto loans for up to forty-eight months, though there may be exceptions. However, auto loan financing should be done for as short a period of time as you can possibly afford. This is to ensure that you don’t end up in a situation where you owe more on the car than its value (upside down car loan) and to minimize the amount of interests you are required to pay.
Down Payments and Fees
With many lenders a down payment may not be required for person-to-person auto loans. Despite not being required, it is better to put money down. Doing this will reduce your chances of overpaying for your car loan in the future. Taxes, title and registration have to be paid separately when you purchase a new car from a dealership. The dealer normally combines taxes, title and registration fees into the loan amount. For private auto loans, the lender will not allow you to finance the fees and will require you to pay for them out of your pocket.
Title Transferring
On purchasing a new vehicle, the title is put in your name almost immediately. When it comes to person-to-person or private auto loans, it could take longer. The owner of the car you are buying from may still owe money on the car and it could take a week or longer for completing the payoff process. His lender needs to receive the payoff amount before he transfers the title to the car owner and then it can be turned over to you. The duration of this process is mainly based on the location of the lender. For a local bank, this process should not take more than a few days. However if the lender happens to be in another state, it could take much longer for the transfer to be done.
To briefly sum it up, private auto loans make a good option if you are a creditworthy borrower. However if your credit happens to be less than perfect, it may be better to turn to your local dealership as the best source for an auto loan.
By: Sarah Dinkins