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Tue, Apr 14th - 6:29AM

How to find whether Car Loan Refinancing is Right for you?

RULE No. 1 – Never Lose Money

RULE No. 2 – Never Forget RULE No. 1

- Warren Buffet

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 car loan refinancing because it will help you in obtaining lower interest rates and affordable monthly payments. When you begin the process of car loan refinancing, you apply for a second loan to pay off your first loan.

When should you apply for Car Loan 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 car loan 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 history or zero credit score at the time of buying your car, you may have received high-interest rates.

If you want to refinance your car loan, check your credit score. If your credit score is healthier and has improved considerably, you can apply for car loan refinancing.

Is your Loan Term Lengthy?

Most people concentrate on lower monthly payments but forget to consider the car loan term. A lengthy loan term is bad news because it means you have to pay interest for a longer period of time. So, if your loan term is longer than five years, you must opt for car loan refinancing and choose a shorter loan term. It will help you in reducing the total interest amount.

Is there a Pre-Payment Penalty?

Before opting for car loan refinancing, you must consider the terms and conditions of your present car loan. There are many lenders that charge high pre-payment penalties for breaking the loan contract. You must opt for refinancing only if penalty fees don’t negate the savings that you will receive by refinancing your car loan.

Is your Car Lease expiring?

Under a car lease agreement, the financing company purchases the car and then leases it to you for regular rental payments. At the end of the lease period, you have the option of buying the car or returning it to the financing company.If your car lease is expiring and you have no money to buy the car, you can opt for refinancing. The refinancing option is also helpful for those people who want to get out of their ongoing lease agreement.

Where to look for Car Loan Refinancing?

Once you are sure of car loan refinancing, you have several options to start the process. You can apply for car loan refinancing at your local bank or a credit union. You can even visit websites of several online auto financing companies and choose one that offers you the best interest rates.

All the best for finding a better car loan!


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Fri, Mar 13th - 1:28AM

3 Things that you should manage before applying for your First Car Loan

"The harder you work, the luckier you become."

Every first-time car buyer should keep these words close to his heart. Auto loan process is difficult for everyone. But, it becomes a harrowing experience for first-time buyers because of their ignorance and inexperience.

If you are in the auto financing market for the first time, do not worry. You need to take care of three important things because they will ensure a successful car buying process.

1. Cash

Days of barter are over; the era of cash is forever.

You cannot buy anything without cash. Even if you apply for a car loan, you will be required to make a down payment. So, it is important that you work-out your budget before buying a car.

You will need cash for the following things:

• Down payment

• Monthly payments

• Insurance

• Registration fees and taxes

• Fuel

• Maintenance

So, make sure that you are ready to assume the financial responsibility of a car before searching for one.

2. Credit score

After the days of report card, the days of credit report begin.

Just like colleges and universities check your SAT scores before approving your admission request; lenders check your credit score before approving your car loan application. Your credit score will determine your credit worthiness and help lenders in deciding the interest rate. Ninety percent of lenders opt for FICO score provided by any of the three credit bureaus: Equifax, TransUnion and Experian.

Every credit bureau gives different importance to credit score components. So, there are differences in each of your credit score. And, every lender has the right to use a credit score from any of the credit bureaus. So, it is important that you concentrate on your credit score range and not your exact credit score number.

If you have not obtained any type of credit before, you will not have any credit history. Following are the options for car buyers with zero credit score:

a. Obtain a no credit auto loan program for your first car.

b. Ask your parent to assume the responsibility of the loan.

c. Build your credit score by obtaining a secured credit card, department store card, etc.

3. Co-signer

Usually, a first-time car buyer has zero credit history. This creates a risky situation for lenders. They don’t know whether they can trust someone with no history of making regular payments. It is for this reason that lenders require someone with established credit history to co-sign you loan agreement.

Remember that a co-signer is different from a co-applicant. A co-signer has no right on the ownership of the car whereas as a co-applicant has equal right. You can ask your friends or parents to become a co-signer.

If you have trouble finding a co-signer, you can request the lender for approving your loan application without a co-signer. Although, no co-signer option should be considered as the last resort because it is expensive.

So, these are the three things that should be kept in mind before searching for your first car loan. Remember the words of Charles Buxton: “In life, as in chess, forethought wins.”

Contact Rapid Car Loans for successful 1st car loan. The online auto financing company will help you in obtaining instant approval student car loans without co-signer. Apply now and obtain no obligation quotes today


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