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5 Steps to Refinancing Your Auto Loan

Steps to Refinancing Your Auto Loan (1) Filling out a CheckbookIn today’s day and age, your credit score can determine the different purchasing options available to you in many aspects of your life. However, it does not take much to let your credit score slip. This happens to thousands of Americans year after year. If you are in this situation and feel as if though you will never be able to refinance your automobile, think again. Following these few easy steps that will help you to refinance your car, regardless of poor credit.

 

  1. Check Your Credit Score Often

The very first thing you should do before looking into refinancing your auto loan is check your credit score thoroughly. Sometimes there are errors or miscalculations that can be caused by an oversight. Even if the score is accurate, it is still important to know the ins and outs of your credit before refinancing.

 

  1. Research Your Lender’s Program Fully

Your lender is there to help and will offer you the best choices at the best prices. Do your research. Look at your lender’s featured dealers and what car options are available to you through the refinancing program. Making a good deal comes from knowing what you want and how your lender can help you accomplish that.

 

  1. On-Time Payments Are a Must

The key to rebuilding your credit score and getting your finances back on track is to make payments on time. This is perhaps the most valuable tool at your disposal. Making all of your payments on time will help boost your credit score so that you are more financially stable in the future.

 

  1. When You Are Able, Pay a Little Extra

Before you sign your contract, read it carefully to see whether or not your lender charges you for making pre-payments. If the lenders do not charge, then this a great way to get ahead on making your payments and get the rest of your finances back on track. The more quickly you pay the loan off, the more financially stable you will be and the better your credit score will look.

 

 

  1. Take Your Time and Make the Right Choices

 

Today there are several ways to make informed decisions in regards to refinancing and building your credit. Keeping an open line of communication with your lender and using their resources effectively are key to getting the best deal on your refinancing. Therefore, in order to make sure you get the most out of your money, take the time to examine all your options and make the decision that is best for you, your family and your finances.

If you have any questions on how to refinance your auto loan or on how to get this process started for you, please visit our website and contact us today for further assistance.

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When is the Best Time to Buy a Car?

Men Shaking Hands during Car DealWhen shopping for cars you want to find a prime sales time, when you get the best bargains, the most features and are better able to wheel and deal. When you do your research into the best time to buy a car, several factors come into play, but often, late summer is the best time for finding a good deal. Here is an overview of why.

 

Outgoing Models

New year models generally tend to roll out in the late summer and early fall. This means that car dealerships are looking to focus on selling the hottest new product while at the same time clearing their lots of last year’s models. As such, it’s a prime time to make a good deal on a new car for the outgoing model year.

In addition, if there is overstock on these cars, they can find their way to auctions, used car lots and other discount sale venues. Keep your eyes open in the late summer and early fall for car models that are brand new, just for the prior model year.

 

Incentives

As dealers are looking to offload their current-year models, they offer astounding incentives like cash back deals, very low interest rates, upgrades on technology packages and yes, discounted prices. Of course, when you’re looking at these outgoing models, you’ll find that your selection may be limited. As more people buy up prior year cars, finding the one you want might be a bit trickier. If you are flexible in your needs and wants, however, the incentives to be found in late summer can be very attractive indeed.

 

Competition and Strategy

Again, just about every lot is looking to offload those “outdated” models. This creates a strong climate of competition every year. That means if you are patient and flexible, you can compare prices and even play dealers against one another to get a great deal on a great car.

Play the strategy game. Do your homework, research the different cars and deals out there, and time your visit to the lot perfectly. Wait until a huge sale goes on at the lot, and go in the day after the sale ends. You’ll get a great deal on those cars that didn’t go during the sale.

 

Incoming Models

Some dealers offer great packages, incentives, and deals on sales and leases of the new models. If you can afford the higher sticker price, you can often get a great deal on a new model car if you jump in as soon as they hit the lots. Be prepared to negotiate your terms, but just about every seller wants to make a big and early impact with their new model cars.

With flexibility, patience, strategy and research, you will find that grabbing up a car in late summer can net you a prime deal. The best time to buy a car falls right after holiday sales and when next year’s models roll out. If you are looking to finance a car, we can help you get approved fast. Contact us today to get started!

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4 Car Buying Tips People Often Overlook

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When you drive off the lot with your new car (even if it’s just new to you), the feeling of adrenaline and excitement is hard to replace. You are, inevitably, in love with your new ride and have dreams of it lasting you for decades to come. All of these adventures in your mind, however, can be short-lived if you are careless in your purchase. There are important car buying tips to keep in mind to ensure your new vehicle takes care of you, and many are often overlooked. Here’s a take on a few of these tips.

Do Your Homework

Never just walk onto a used (or new) car lot with the attitude, “I’d like to buy a car.” This is the fastest way to get into a vehicle that might not be prime for your needs. Before you hit the lot, spend some time doing research.

Look at fliers, drive past several lots, and look up reviews of vehicles online. Know what you want: is it a sedan, a crossover, a full-sized SUV, or a compact? Do you have a specific make, model and year in mind? Next, investigate prices. There may be ten options that fit your needs in the area. Check the prices on each and see if you can find out which dealers have a reputation for negotiation. The more you know about what you want, the better poised you’ll be to make a deal.

Get Pre-Approved

Get pre-approved for a loan! This will help you secure a prime rate and will greatly expedite the process of buying the car. A pre-approval says that you’ve got good credit, you’re a strong bet for making payments, and that the money is there, waiting.

Investigate and Inspect

Even when you think you’ve found the one, look at others in the area. Actually, physically go to the lots and inspect the vehicles. Test drive them if possible, and if you’ve got a friend or colleague who is a mechanic, by all means bring them along to take a look!

Check the starter, the AC system, the heater, all of the indicator lights and the idle. When you test drive, try to get a good 10 miles out of it and if possible, take it on the highway. You’ll be surprised at the problems that can crop up at 60mph after the car is at full heat.

Shop and Deal

Don’t be afraid to tell the lot you’re looking at other cars. This might make them more willing to deal. If they threaten you or try to push hard-sell tactics, don’t be afraid to walk away. They might not be the best bet for you, anyway.

In the end, the most important thing to keep in mind when car shopping is this: be thorough. Do your homework, investigate your options, know what you want and give a test vehicle a full rundown to put it through the paces before you agree to buy. Don’t fall prey to predatory sales tactics. If you are ready to start your shopping for a new car, check out our pre-approval page and get going today!

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How Often Should I Check My Credit Report?

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Most people who are trying to build, rebuild or repair their credit know that monitoring your credit reports is the best way to stay on top of your current status. Checking your report can not only keep you appraised of where you stand as far as your debts and score go, it can allow you to spot and remove costly mistakes. But how often should I check my credit report? Let’s take a look at an overview of how your credit report works.

The Three Bureaus

In the United States, there are three major credit bureaus whose reports are used to monitor credit. These bureaus are Experian, TransUnion and Equifax. The reports from each of these bureaus can be very different from one another, and no lender is required to check all three or any given one, nor report to any or all. This means that monitoring all three is important to keeping your credit top notch.

Each credit bureau is required by law to provide you with a free report once every year. It is your choice whether to look at one or all of these, but checking them all is often a good idea.

Watching Your Credit

Monitoring your credit very closely is vital to keeping a strong credit score. Not only will it permit you to take control of your own legitimate credit issues, it can be an important way to spot fraud. Identity theft is all too common these days and strange charges on your credit report can indicate lines of credit that you never opened. This can be a strong tool in stopping criminal activity.

One at a Time or All at Once

Since all three reports are available to you for free once per year, checking them on a rotating basis will allow you to monitor your credit approximately every four months. However, if you are trying to improve your score, or are finding you have a tough time getting credit, you may want to look at all three at once. Doing this allows you to look for errors on one or more, and compare the results of each.

Effects on Credit

Requesting multiple copies of your credit score for review, or checking them more than once per year, will not negatively affect your credit score. Making multiple credit applications at the same time or within close proximity of each other may create a red flag when creditors do what is known as a “hard” pull of your reports. This can negatively affect your overall score. When you request reports, however, this “soft” pull does not have any effect on your overall score. It will, however, incur a small fee for each report you request before twelve months have passed.

Put Simply

Put simply, how often you should check your report is really up to you. If you are monitoring your scores very closely, several times a year can be helpful. For many people, rotating your reports every four months is plenty.

If you are looking to purchase a car to help get your credit flowing, we can help. Take a look at our featured dealerships, and get in touch for a one-on-one consultation today!

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Having Trouble Paying Your Loan

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Everyone runs into financial problems now and again. Whether it’s from injury, job loss or other unfortunate money circumstances, it’s possible that you find yourself having trouble paying your loan and bills. Skipping payments on your auto loan, however, is never a good idea. This can result in bad credit and even losing your car to repossession. Here are some tips for what to do when the money monster bites and you find yourself behind.

 

Hardship Modifications

Reach out to your lender and ask if they have any options for temporary financial hardship. Some lenders will permit you to adjust your loan so that you make lower payments for a while. They may even allow you to take forbearance for a month or two, making up the difference down the line. However, if you think you will have issues, reach out to the lender before you miss a payment.

 

Refinancing

For many people, refinancing your vehicle can be a smart move to lower your interest rate and thus lower your monthly payments if you’re having trouble paying your loans. Be warned, however, that refinancing does not always simply mean lowering your rate. It often means replacing your current loan with a new one. This new loan can be longer term than your old one, placing you upside down by the time you pay off your vehicle.

 

Turn Over Your Loan

In some cases, especially if your loan has a good interest rate, you may be able to find a buyer who is willing to simply take over your payments. This requires working with your lender. Firstly, you will want to be sure that your loan is “assumable,” meaning it qualifies for this arrangement, and secondly the lender will want to vet the buyer to be sure that they will be able to make the payments you cannot.

 

Sell the Vehicle

Another option is to sell the vehicle outright. See if you can make enough off of the sale to pay off what you owe on your loan. If you can manage to be without your vehicle and you can get a good enough sale price, this can solve your problem in both the short and long term.

However, if you cannot sell the car at least for what you owe, you will still need to make up the remainder before you can transfer the title. Remember, even though you have possession of the car, you don’t own it as long as you still owe on the loan. The financing lender has a lien on the vehicle until it is paid off.

 

Less Attractive Solutions

Repossession, bankruptcy and the like are also options for getting out from under your loan. These, however, are never the best solution to pursue. For one thing, they will severely damage your credit, sometimes for a period of seven to ten years. They will make it difficult for you to get credit of any kind, including for a new vehicle. You are always best off to work with your lender for a better solution.

If you would like to refinance your car loan, we can help. Check out our refinancing page and give us a call to get started today.

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What Length Should My Car Loan Terms Be?

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When you go looking for a new car, one of the first things you should consider is how to structure your loan terms. Many people go for the lowest

monthly payment, even if it means a longer loan term. According to Edmunds.com, 62 percent of car loans last year were for terms of over five years. This is not always the best solution. There are many factors to consider when applying for an auto loan, and almost all of them figure into
the overall length of repayment.

 

Monthly Payments

When people shop for a car, most think they are being smart by working out their budget. Unfortunately, the way in which they approach this all-important idea is not always the best. For many, the first thing they consider are their monthly finances — how much more each month can they afford to pay?

This is certainly valid; most of us deal with bills on a monthly basis. The problem is if that’s your only guiding star. You could very well end up in over your head when you buy a car that you can’t afford, even if the monthly payments seem sound.

 

Interest

Consider: if you can only pay $250 a month, and you have a choice between an economy car that will let you pay that out over four years, and a luxury sedan or SUV which will cost you that over eight years, which is better? Far too many people go for the sedan or SUV, thinking that if they can afford the luxury they should, or believing that the high-end car will hold its value longer.

The truth is, the longer you pay on a vehicle, the more you are going to pay in interest. Edmunds reports that the difference between a 5-year and 6-year loan in interest alone can be over $4,000! That’s a difference of only one year in the cycle of the loan, all in interest.

 

Depreciation

The longer you own a car, the less it is worth and consequently, the less you can get when you go to trade it in on a new model. In addition, the longer your loan terms, the longer it will be before you can get your head above water and actually build equity into your car because of the increased interest. If you go too long, it won’t be worth the trouble. Your car will be worth too little and you will still owe more than it is worth.

 

Go Smaller, Go Smart

In the end, if you have a choice between a more affordable vehicle at a shorter term, you should go for that. The less time you are paying on a car loan, the better off you will be.

In general, it is recommended that you not go beyond 60 months (5 years) for your vehicle loan. The choice you make may not be your dream car, but love at first sight burns out fast anyway and you might grow to love your second choice even more.

If you need a car loan and you have non-ideal credit, we can help. Give us a call to consult today!

 

 

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How Auto Loans Can Improve Your Credit Score

 

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Cars may be more expensive than most people’s six month income, but the good news is that getting that expense financed can help you out a lot down the road. In fact, cars lie in a perfect price range to help people build credit without high barriers to entry.

Financing a car is much more practical than smaller purchases like furniture and more affordable than homes or business loans. People with below average credit can work their way towards bigger purchases and better credit availability as a result of paying off their auto loans gradually.

Here is how:

Auto Loans Create Their Own Collateral

Many people have difficulty asking for a loan for home improvement or to get through tough times because they do not have much collateral to offer. People who rent and who do not have significant savings or investments often have little to bring to the table as far as lenders are concerned.

With a vehicle purchase, the vehicle itself is the collateral. People can secure the loan using the car and enjoy benefits such as lower interest rates, more flexible terms and payment options compared to an unsecured loan.

Making Loan Payments on Time Builds Credit

Auto loans are installment loans, which means they are paid back in preset increments. Unlike revolving credit loans, which grant lump sums up to a limit and only require minimum monthly payments, installment loans have a preset payback time that keeps the loan-holder on a steady track to paying it off.

Every single time you make a car payment on time, you are helping your credit rating improve just a little. At the end of a 1-5 year loan, the person making payments will have built quite a dependable credit history. Even better, credit bureaus want to see a mix of revolving credit and installment loans, and auto loans are arguably the easiest and most practical installment loans to procure.

You Can Refinance Later and Make Paying the Loan Even Easier

Chances are, if you have bad credit or limited credit your first car loan will be stricter than usual. Expect higher interest — possibly even in the double digits — and origination fees.

However, after one or two years of making timely payments, you have built up a more solid credit history and have likely increased your score. You can then refinance your existing auto loan for a new one with much lower interest and friendlier monthly payments. You can even fast track your loan to get paid off in a shorter amount of time, assuming your financial situation has improved.

Car Payments Are Much More Flexible Than Other Loans

As long as you do not get a loan with early payment penalties, you will be able to pay your car off largely on your own terms. Securing low monthly payments and then adding any extra cash can reduce the life of the loan more quickly and can often help you avoid paying a portion of the interest.

With refinancing, you can also readjust the loan to lower your payments or even raise them in exchange for a lower interest rates. These options make a car loan much more flexible than something like a mortgage or student loans.

To find a loan that is right for you or to learn more about auto loans, visit our bad credit auto loans page.

 

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6 Steps to Fix Bad Credit

Fix Bad CreditWe live in tough economic times. No matter how often the media tells us the economy has bounced back, there are a lot of folks out there suffering under the crushing weight of bad credit. Having non-ideal credit can damage your ability to buy a house, a car, and even in some cases get or maintain a job. If you have suffered credit problems, you are not alone. The good news is that bad credit can be fixed. Here are a 6 steps to fix bad credit  to put you back on the road to success.

Know Your Credit Report

Obtain a copy of your free credit report from annualcreditreport.com and review it carefully for errors and other problems. You might be surprised at the mistakes you find on your report: well over 2/3 of all credit reports have errors that can easily be repaired.

Get Right with Creditors

If you are behind on any payments, work hard to get current. Remember that keeping your payments current always results in a better score. Many creditors are more than willing to work with you to arrange a new payment schedule to help get you current and in good standing. For others, credit counseling agencies can help.

Secured Credit Cards

Secured credit cards are one of the best kept secrets in the industry. These cards require a security deposit, which determines the amount you can spend on the card. Once you have secured this card, make small purchases with it every month and immediately pay them down. This is a great way to rebuild credit.

When you have good enough credit, upgrade to non-secured cards and maintain the same practice: small purchases, paid off promptly.

Avoid Closing Cards

Do not close out your current credit accounts, and do not let them languish unused. Both of these create a negative impact on your report. It is unfortunate that the more credit accounts you have, the harder it may be to maintain positive credit. Still, maintain your accounts. Talk to your creditors about perhaps switching to more advantageous terms on your various cards.

Limit Inquiries

Every credit inquiry you make will damage your score. Make sure that if you are shopping for a loan, you do it in a small and targeted period of time. When you get a loan, do not look for more credit for at least several months. This way you will keep your credit history strong and clean.

Stay on Top

Above all else, stay on top of your credit report and credit score. Continue to monitor your expenses and use of credit moving forward. Stay on top of all of your payments and keep your score clean and clear. This requires discipline and diligence, but many people find that when they get their score clean they can increase it to levels that far outstrip many who have always had good credit. This happens just by being responsible.

Do you have any tips or ideas on how to fix bad credit? Leave a comment below and let us hear your thoughts!

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Can You Get an Auto Finance Loan Post Bankruptcy?

Rebuild Your Credit with Your CarAfter the 2008 mortgage crisis, society became more understanding to the fact that anyone can fall upon tough times. The event triggered a global recession and helped lessen the stigma of defaulting on loans.

Debtors can still feel as if they have no hope of getting an auto loan once they have decided to file for bankruptcy. Fortunately, finding a loan after bankruptcy is possible. It only requires some searching and some careful monitoring of your finances once you secure a loan.

Where to Find a Loan Post-Bankruptcy

New auto lots and franchise banks are less likely to give you a loan after declaring bankruptcy. When they do, you may abide by strict repayment terms and have high interest rates.

Typical rates hover around 4-5 percent for those that can find them. After declaring bankruptcy, you may see a lot of offers easily doubling these amounts. Try to avoid interest rates 15 percent or higher if you can help it; these may hurt your ability to rebuild credit.

Another option for finding a loan is to visit your local credit union. They are typically more generous and understanding to those who live and work in the community.

Outside of credit unions, there are smaller lending institution that specialize in car loans or loans to people with troublesome credit history. Always try to review and compare terms with these organizations since you will have many options at your disposal.

BKCarFinance offers a unique auto financing solution for people with bankruptcies or other credit problems.  Our integration with bad credit car financing companies provides the opportunity to receive up to four loan offers from the privacy of your home.

Any lender is likely to be more favorable to the idea of lending you money if your financial troubles did not stem from missing car payments.

Using a Car Purchase to Recover from Bankruptcy

Once you are able to secure a car loan, you are in a great position to rebuild your credit. Making payments on time will demonstrate fiscal responsibility and a dedication to fixing your blemished past. Here are even more ways to help you stay on track:

  • Find a reliable used car with mileage lower than 100,000. These will be cheaper and easier to secure financing for.
  • Make as large of a down payment as you can. This tactic will help reduce your interest rate.
  • A cosigner can help you get better loan terms, but make sure it is someone you trust.
  • Set aside savings for several payments in advance if possible. This strategy will help you avoid missing payments should you suddenly become strapped for cash.

Refinancing Can Help

Once you have made payments on time for six to eight months, your credit score may have improved. Refinancing after this period will help reduce your interest rate and get better loan terms.

Just like with finding your initial car loan, shop around for the best deal when refinancing.

Compare the fine points such as interest rate, loan terms and monthly payment amounts. Try to arrange a large enough monthly payment to be comfortable for your situation while still clearing the loan away as quickly as possible. Calculating the total amount you will spend on the loan including interest will also let you get a “big picture” assessment on how helpful a refinance plan will be.

These strategies will aid you in your mission to get back on the road. If you are careful with your spending and make your payments on time, your car purchase can be a foothold towards establishing better credit and leaving your troublesome past behind you.

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What You Need to Know About Car Refinancing Loans after Bankruptcy

car refinancing loansWhile everyone who wants a car is aware they can find an auto loan to help them pay for it, many people are not aware of what exactly car refinancing entails. Refinancing is a powerful tool to help you manage an existing auto loan. Knowing about what it does and what it can accomplish is important for harnessing its helpful potential.

The Refinancing Process

When you refinance, you are basically seeking out someone to pay off your existing auto loan and give you a new one. The refinancing lender will take care of the remaining balance on the loan you currently have and then offer you a completely new line of credit with a new set of terms and conditions.

Here are some of the top reasons people refinance:

They Got a Bad Loan

Whether they were pressured into an unfavorable loan by a car dealer or they simply were not aware of how burdensome a loan would be, some people end up strapped down by bad auto loans. These loans can have harsh repayment schedules, unfair payment amounts, unreasonable interest rates or all of the above.

When you refinance, you get the chance to throw the baggage of a bad loan out the window. Shopping around for the best refinance rate and terms means you can get out from underneath a toxic loan and get back on a path to repayment.

Their Credit Improved

Your credit score is a large determining factor for your interest rate. If you have an improved credit history or have been making progress in the past year or so, you just might have a big enough credit score increase to get a better interest rate.

The National Interest Rates Changed

Lenders set their rates according to how the national economy is doing, especially the rates set by the Federal Reserve Bank. When the reserve cuts interest rates or several large banks change their lending policies, the interest you get on an auto loan can reflect this difference.

They Want to Pay the Loan Off Quicker

Some people end up doing well on their auto loan and want it paid off quicker than they initially expected. While they could just add to their payments every month, having a set payment schedule is helpful for keeping on track. A refinanced payment schedule could also gear more money spent every month towards the principal balance rather than just interest payments.

Trouble Making Monthly Payments

Personal finances can be a delicate matter. A number of mistakes or miscalculations could place someone in danger of defaulting on their auto loan. This can create a huge blemish on their credit history.

Many customers use refinancing to keep afloat. Refinancing can give them lower monthly payments. They can also be placed back on track if they were behind on their personal finances.

If any of these situations apply to you, refinancing could be your best option. You get the chance to wipe your old loan clean and start again on a new one that will hopefully place you in better financial standing.

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