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Take the Pain out of Monitoring Your Finance

Go from bad credit to good credit without beating yourself up

Can there be any joy in monitoring your finances? Your bank balance is disappointing more often than not. Trimming expenses doesn’t bring any joy. Reminders of irresponsibility can be a gut punch.

Still, a different mindset can help you make the changes to put you on the path to good credit.   

Begin by forgiving yourself for financial mistakes

The shame and blame we heap upon ourselves for not being where we want to be financially can make our situations worse. It leads us to avoid confronting credit spending, recurring debits from bank accounts, balances on personal loans or car loans, and important conversations with family members.

Shame springs from an idea that the individual has departed from social norms. Start dismissing your shame when you understand that one in three others you’ll meet today also have credit under 601. That’s right—one-third of Americans today have bad credit.

The individual experiencing bad credit has lots of company. And is this all their fault?  With aggressive companies relentlessly bombarding us with messages that we deserve their products and that we must keep up with our peers, it’s no wonder we overextend ourselves.

If you can grab your financial issues “by the horns” so to speak, you have made the first

 step on the path to success. Some psychologists tell us that, “a willingness to endure discomfort and capitalize on challenge is a trademark among successful, fulfilled individuals.” While it will require a little effort, put a budget in place, inform those who may impact it, stick to it. You’ll quickly find positive feelings about yourself and your financial situation multiplying. As Benjamin Franklin told the framers of our constitution, “Once begun, half done.” Those quill pens got to writing, despite their enormous task. 

Gamify Your Savings

Rather than tracking every $3 coffee, focus more on a positive indicator: your savings level. As that rises, set a reward after reaching certain amounts. The reward could be you get to buy a new piece of clothing or 10 shares of SnapChat stock. Set these levels up ahead of time and stick to these commitments. These rewards can offset the sense of loss from avoiding day-to-day overspending.

Take the pressure off when you avoid social media

First and foremost, understand that social media is simply carefully selected snippets of your friends’ and family members lives. What they choose to share is designed to elicit envy. Those of us here at First Financial are constantly surprised at friends’ life-is-so-great posts and how these compare to what we know are their real struggles.

What’s more, when you focus on others, you remove your attention from your own issues. If you have bad credit, all your attention needs paid to your spending and savings plans.

Let the social world turn without you when you use a religious tradition, mindfulness, meditation or good old smart reading to understand how pointless it is to compare yourself to friends, relatives.

Deepen Your Relationships when You Lay It All Out for Loved Ones

Serious conversations with loved ones can be intimidating, particularly when they’re about money. Strategize how to take the sting out of belt-tightening before you tackle it with those you love. In other words, have alternate plans to take the place of lavish habits so that your new financial regimen doesn’t translate as 100 percent loss.  

First, explain how it’s important now to join forces for common goals and how these efforts will unite you. Emphasize that working together for financial fitness by cooking meals together, going to resale and thrift shops and competing for better money saving strategies will get you talking and sharing more. Also, make sure you include your family members’ long- and short-term goals in your planning. Study after study reveals that children and spouses prefer experiences and time spent together over material goods anyway. Shared experiences just connect us better and for longer than shared material consumption. Use that research if you have to!

Your new financial fitness system may benefit from gratitude journals. Everyone should jot down at least one thing they’re grateful for every day. Sharing is optional, but when these grateful moments that include others are shared, it strengthens bonds. These journals, particularly effective when an individual is feeling particularly short-changed, have proven to increase happiness significantly.

What Your Peers Are Spending & Borrowing for Cars in 2019

Get some perspective on your auto goals by analyzing the budget others are advocating for transportation. Today, many pundits consider the car to be a consumer’s biggest high-tech device. With voice-enabled navigation, communication and entertainment options standard, really, we have to agree. Then, too, technological advances like near-automated steering and emergency stop assistance (should driver lose consciousness) are making cars safer. With all of these dream features, higher price tags follow.

To ensure drivers get into these space-age vehicles, the car and car loan industries are adapting with better deals and longer loan terms. If you haven’t bought a car for a while, knowing industry averages will help guide your decisions.

Experian’s analysis of 4.7 million auto loans reveals that the average American car payment is $523 per month. Buyers of new cars, trucks and SUVs borrow an average of $31,453 to get their new rides onto their driveways. The average length of a car loan is five years and nine months, not too far away from the typical five-year term, but revealing that people are taking out longer term loans as mentioned above.

Today, many new and used car buyers are getting their loans online before heading to the dealership. After all, with the loan issues taken care of, buyers can better negotiate car price. They also have the confidence to walk off the dealer lot when they are qualified for financing. Car shop on your terms when you secure your auto loan through A+ rated First Financial.

When and Why to Use a Personal Loan to Buy a Car

Given that they’re secured loans, auto loan interest rates can be low, making them the obvious choice for buying a car. Still, there are certain situations where a personal loan for a car purchase makes sense, too.

First, ever seen a line of cars outside of your favorite grocery store? They’re all for sale, and often several buyers are milling around looking to get a cool ride at a great deal. Sellers always want money immediately, and they certainly don’t want to mess around with being paid over months. That means you need the cash on hand in the form of a cashier’s check. The online personal loan puts the funds in your checking account within days. If you have it ready to go when you make an offer, you have a better chance of getting the car.

Then, if tail fins and hood ornaments are your thing, you have classic cars on the brain. Vintage collectors know that lenders hesitate to finance a car if it’s under a certain age or is over 200,000 miles. Personal loans come in handy to snatch that old Corvette or Mustang from the market.

Finally, low-credit-score borrowers can sometimes get lower interest rates when they go the personal loan route. Some lenders, like First Financial, specialize in providing personal loans to those with credit challenges.

Online lenders have the fastest, easiest processes for winning personal loans. You find out in minutes how much you qualify for and get the money the next day in most cases. Have more questions? Review our personal loan FAQs. Ready to apply?

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Know the 4 Most Common Auto Loan Mistakes Before you Go to the Dealer

cash and car for auto loan
Be aware of auto loan pitfalls and save! 

Want to hear something scary? “The big mistakes are made in the financing office,” explains Phil Reed, senior consumer advice editor at Edmunds.com, the auto research website. “Making the right decisions can save thousands over the life of the loan.”

A car is a big purchase with a lot of moving parts. Dealers makes their profits between the gaps in buyer’s knowledge and they may try to confuse by unleashing lots of terms like “negative equity” and “origination fees.” Use these recommendations from experts to save thousands over the life of your car loan.

Don’t let the dealer define your credit score or credit “worthiness.”

Walk into the showroom with your credit report snugly in your back pocket. Otherwise, you run the risk that the salesperson leaves your negotiation only to come back with bad news about your credit. And of course that score isn’t high enough to get you the best rates. Who knows if he or she was checking your scores or playing a quick game of hacky sack? Dealers know that most consumers do not check their credit before being lured in by deals. Don’t make yourself vulnerable to this unethical treatment.

We discuss how to find your credit score easily in our previous blog post on rebuilding your credit (LINK). Just go to Annualcreditreport.com, fill out a few fields and your report arrives in you inbox instantly. Trust these results from the only free site authorized by the U.S. government’s Federal Trade Commission. Typically, anyone with a credit score of 720 or higher gets the lowest interest rates as they’ve demonstrated the most responsible money management. Still high 600s to low 700s is considered a “good” score. Those with lower scores can still get loans, but they will pay more in interest and fees.

Another way to check your credit is to get pre-approved from an outside lender like your bank or by applying for an online auto loan.  If you can manage to shave just 1 percent from your car loan, you’ll pay hundreds less over the next five or six years.  

Don’t make the wrong choice between a loan interest rate and a cash rebate.

Sure, the cash rebate feels enticing. And it might be the right choice if you use it to pay off other, higher interest loans like cash advances or credit cards. Basically, you need to decide if you want a lump sum up front or lower monthly payments over the next five or six years. Of course, not every car buyer is offered low-interest car financing, only those with the best credit scores. Again, know your score before you go to the dealership.

Don’t roll negative equity forward.

Some like to get new cars every two years. Often, they walk into the dealership with their auto loan “upside down.” That means they still owe more on the car than it’s worth. While those loving shiny new cars can get their next ride even if their loan is upside down, they’re putting themselves on a downward financial spiral.

Dealers don’t care what financial shape the car buyer puts themselves in. They will just add the negative equity–what you owe–into the purchase price of the new car. Chances are, this frequent buyer will just roll even more negative equity into the next new car, too.

Rather than enter this vicious cycle, consider buying a used car. A car loses much of its value in the first two years off the lot. And today, most cars are built to last 250,000 miles. Consider keeping the car longer and buying used to get the most for your car budget.

Don’t finance costly add-ons.

Just as movie theaters make most of their money on the popcorn, 37% of auto dealer’s profits come through aftermarket add-ons. These add-ons include  extended warranties, fabric protection and paint sealant and they are always less expensive from vendors other than the dealer. These costs feel like a no brainer when amortized over the life of the loan. The salesperson is quick to tell you that they add just a few dollars to every payment. Still, even $20 more over 60 payments is an additional $1200–real money.  

Don’t hesitate to question all fees.

With the deal wrapping up, a buyer’s guard is down. Salespeople know this well. The deal takes so long for a reason. It’s at the end that a salesperson may bring up unusual fees that may have official sounding names. Review all of the legitimate fees here and don’t hesitate to push the salesperson to drop anything that sounds suspicious.

A+ Rated First Financial Approves Auto Loans Up to $45,000

Better Business Bureau A+ rated First Financial has helped arrange over 1,000,000 auto loans, some with approved amounts of up to $45,000. We have loans for borrowers with all credit scores, even fair poor and bad credit. Take three minutes to apply here for a new or used car loan and get your answer fast!

Know these 2019 Auto Loan Trends Before You Buy a Car

aston martin with a good auto loan

There are some pretty sweet 2019 automobiles hitting the markets right now.

Acura redesigned their luxury compact RDX. Subaru is doing it’s Outback one better with its the 3-row Ascent SUV. Pickup trucks have been re-tooled as well. The compact Ford Ranger gets a sporty new design, and Chevy has modernized its powerful Silverado.

And then there are the high-tech features!

Internet connectivity, which sounded space-age just a few years ago now comes standard on many models. Apple CarPlay and Android Auto puts a range of entertainment and navigation options at drivers’ fingertips.

But before you let these new models and technological advances bewitch you, understand the trends in 2019 auto loans so you can get a deal.

Trend:  Slowing car sales

Why?:  Millennials and urban dwellers are avoiding buying cars because they find Uber and public transportation sufficient. Millennials also put less focus on material possessions reflect status. They are not enthusiastic buyers of cars OR homes.

For You:Car manufacturers and dealers will offer more incentives. Car prices will stay steady from 2018 to 2019.

Trend:  Lower loan origination fees

Why?:  Cloud processing, automated application review, and digitized documents mean dedicated, in-house loan analysts now have to get jobs at Subway. It also means lower labor costs for lenders.

For You: In the competitive auto loan market, lenders have to compete on price. Therefore, the buyer has more power to negotiate the 1% to 2% loan origination fee.

Trend:  Eight-year car loans

Why?:  Cars are lasting longer. Toyotas and Hyundais tend to get the most praise for working well after 200,000 miles.  According to autobytel.com, however, American models like the Chevy Impala and Buick LaCrosse hold up well into the 200,000 mile range as well. “Every new car today is built to last a quarter of a million miles,” explains Mike Calkins, AAA technical services manager. Taxi drivers brag that their Priuses make it to 600,000 miles!

For You: Car buyers who like to keep their cars for a long time can get more car for their budget with an 8-year car loan. While they’ll be in for more interest payments, using that money in other better-performing investments offsets auto loan interest costs.

Trend:  Rising interest rates

Why?:  With the economy thriving, the federal reserve has raised the federal funds rate eight times since the end of the Great Recession. It’s now at 2.25%. Most economist predict “The Fed” will bump rates up three more times in 2019 and then at least once more in 2020. With a federal funds rate at 3.25%, you bet the average auto loan cost will rise.

For You:   The tricky thing is, as happens with homes, when auto loan interest rates rise, car manufacturers tend to compensate with lower prices. They know about how much their consumers can spend each month on a car payment. Still, when you go into the dealership, don’t be surprised that the 1% interest rates have disappeared.

A+ Rated First Financial Cuts Auto Loan Costs to the Bone

Are you in the market for a new or pre-owned car? Better Business Bureau, A+ rated First Financial has auto loans for all credit types, even bad credit! Since 1996, we’ve helped arrange over 1,000,000 auto loans, some with approved amounts of up to $45,000. Take three minutes to apply here for a new or used car loan at the lowest rates!


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