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Avoid These Costly Mistakes With Auto Title Loans

Auto title loans are a quick and simple solution for some situations when you need cash quickly and especially if you have credit issues which leaves few other borrowing options available for you. However, before you decide to risk your car using auto title loans, read these tips first. You could avoid some potentially very costly mistakes if you know what to watch out for.

How Auto Title Loans Work

If you own an automobile, you can put up the title up as collateral and get a loan based on the value of the car. For example, many companies which offer these types of loans will allow you to borrow up to 50% of the value of your automobile. So if you own a car that’s worth $5,000 you might be able to put the title up as collateral and secure a loan for as much as $2,500.

However, if you’re still making payments on your car, the amount of your auto title loans will be determined instead by the amount of equity you have in the car. For example, if your car is worth $5,000 and you still own $2,000 then the lender will determine the amount of your loan using the $3,000 of equity you have in the car.

The good thing about these types of loans is the lenders generally don’t require a credit check because they have your car title as collateral and security for the loan. Meanwhile, you can still drive your car and pay back the loan in payments. Of course, auto title loans do carry an interest rate which will be determined by the lender when you fill out the application. Be aware that interest rates and terms can vary widely among auto title loan lenders.

It’s also important to remember that if you use one of these types of secured loans, you need a plan for how you’re going to pay the money back. This is certainly a loan which you can’t afford to default on. If there are other options for you to get a loan with bad credit, be sure that you consider those as you’re considering whether an auto title loan is the best answer right now. Other quick cash type loans include; unsecured personal loans, payday cash advance loans, guaranteed payday loans, fast business loans and secured personal credit loans.

Auto Title Loans – Avoid Costly Surprises

As you are searching for an auto title loan company, it’s important to look into the company’s reputation and make sure that they have a track record for helping consumers like you. Always compare at least 3 different lenders offering auto title loans and by all means ask for a copy of their loan papers to review before you enter into any loan contract and read them carefully.

It’s very important that you read the entire auto title loan contract before you sign anything and be cautious for any additional fees and default clauses. Also review the loan terms and conditions carefully and pay careful attention to the insurance requirements and know exactly what property you are pledging as security for the loan, (is it only your vehicle). This way, there will be no surprises when it comes to paying back your loan without hassles. Remember that many people using auto title loans are doing this as a last resort or as a short term solution for getting quick cash, and you certainly don’t want to get involved with any financial lender who could take advantage of your financial situation. You should always seek the services of other professionals for legal, account and tax advice before you sign anything.

With a bit of diligence, you should be able to find a number of reputable companies offering the types of quick cash loan that you need and then you can be well on your way to overcoming your immediate cash needs. There are a number of specialty car financing companies online today that specialize in providing auto title loans and you’ll find these companies offer many options because they network with many of the largest auto finance companies across North America and even Canada. Remember an informed borrower is a wise borrower, good luck to you.

Special Auto Financing For Bad Credit Individuals – 7 Tips

The ability to qualify for auto financing is something that just about everybody aspires to, but not everybody is able to achieve. The reason: bad credit.

You see, any FICO score under 600 is considered to be a poor credit score by the vast majority of auto financing lenders. And, what is even more challenging for poor-credit applicants is that most auto financing lenders consider the applicant’s credit score exclusively – but they often ignore other factors that could be relevant. They do not look at other factors that might otherwise indicate credit-worthiness, such as employment history or individual items on the applicant’s credit report.

If you have a poor credit score, you have no doubt experienced some challenges in getting approved for a loan. Here are 7 tips for finding special auto financing for bad credit individuals:

1. Find a car that is within your price range:

First, let’s get practical. You have a much better chance of qualifying for auto financing if you simply choose to purchase a car with a lower price tag. Yes, it would be great to get that all-frills-included, top-of-the-line model you have your eye on. But, with a poor credit score, beggars can’t be choosers, as they say. Do yourself a favor and select a lower-priced car now. In a couple of years, as you work to improve your credit score, you can always trade up to that better model.

2. Put together a sizable down payment in order to reduce your loan amount:

Another way to reduce the size of your loan – and increase your chances of getting special auto financing for bad credit individuals – is to come up with a larger down payment. This may not be possible for you, and that’s okay. But, if possible, scrape together more money for the down payment than the minimum required amount.

3. Run a credit check on yourself:

The bad credit auto financing lenders you are going apply to (see below) are going to run your credit score. That’s why it is a good idea to run a credit check on yourself first. By doing so, you can examine your report and look for anything that stands out – good or bad. Run your report with all three of the top agencies and become familiar with each one.

4. Approach one lender to get an idea of the rate you can qualify for:

The next strategic step to take is to establish a “baseline” quote by applying to just one new lender. Write down all of the details of the loan terms they offer you, including interest rate and repayment period (e.g., 60 months). You will request identical or better terms from the additional lenders to whom you apply.

5. Now, build a list of at least 5 bad credit auto financing lenders:

Your next step is to cast an even wider net by putting together a list of even more bad credit auto financing lenders. Your list should include at least 5 lenders. Search online.

6. Submit an auto financing application to each lender on your list:

Now, it is time to start submitting those applications. Apply to each and every lender on your list. Don’t get lazy and stop after you get your first offer or two (this will be tempting!). Instead, follow through to the end of the list.

7. Go back and negotiate for an even better offer:

Now, it is time to go back to those that made you a reasonable offer and negotiate for an even better one. Your chances of success will go up if you negotiate instead of just accepting what they offer you the first time around.

Try these 7 tips for getting special auto financing for bad credit individuals.

Loan: Advantages and Disadvantages

If you’re struggling to overcome financial difficulties and debt, you might consider taking out a loan, but there are so many different kinds of loans available that it may seem difficult to decide which type of loan will work best for you. Each has their own advantages and disadvantages, so here is a quick rundown of the loans that are available and most commonly opted for and what benefits they entail.

Secured Loans: a secured loan is simply a loan that is ‘secured’ against an asset. This is known as ‘collateral’ for the loan. In many scenarios, the home is used as collateral for a secured loan.

Advantages:

Interest rates for secured loans are often lower as they are considered to be ‘low-risk’ by the lender.
You can borrow greater amounts.
Repayment of the loan can be spread out over a longer period.
Disadvantages:

You will lose whatever is used as collateral if you default upon loan repayments.
You may get a bad credit rating.
Unsecured Loans: unsecured loans are loans that do not require collateral.

Advantages:

Unsecured loans are lower risk for the borrower as they will not lose a valuable asset if they struggle with repayments.
Disadvantages:

Smaller amounts are offered and the repayment period is significantly shorter than that of secured loans.
Defaulting or falling behind on repayments can result in court judgements.
If the matter goes to court, they have the ability to change the loan to a secured loan, resulting in a loss of assets in order to repay the loan.
Home Loans: home loans are simply mortgages and are used to pay for a home over an extended period of time.

Advantages:

When your mortgage is paid off in full, you own your home.
Disadvantages:

Mortgages required a deposit which is normally a specific percentage of the overall value of the house.
If you fail to keep up with mortgage payments, your home may be repossessed.
Debt Consolidation Loans: this kind of loan is used to ‘consolidate’ all of your debts into one, instead of having separate debts. Money given to the borrower is instead transferred directly to the creditors and the debts if repaid to the new lender.

Advantages:

Debt consolidation loans can help to reduce monthly repayments.
Payments are spread out over a longer period of time.
Interest rates are reduced
Disadvantages:

Longer repayment period means more interest to pay.
Pawnbroker Loans: similarly to a secured loan, a pawnbroker loan is a loan that requires a valuable asset as collateral, but this can be almost any suitable item of value like jewellery, watches, antiques, coins and bullion or scrap gold.

Advantages:

No credit checks are necessary to get a loan from a pawnbroker.
Getting a pawnbroker loan is often very fast.
You can borrow very little or you can borrow significantly more.
Pawnbrokers do not require information about what you intend to do with the borrowed amount.
Online pawnbrokers like unclesmoney.co.uk can offer twice as much for your valuables as highstreet pawnbrokers.
Disadvantages

You will lose your asset if you default on repayment after the term has ended or if an extension cannot be agreed upon.
Interest rates can be high depending on the pawnbroker.