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Recently, credit tracking giant broadcast some great news for those needing fair, poor and bad credit auto loans. It reveals that during the second-quarter of 2020 U.S. banks:
Banks are now more willing to lend to those whose credit scores dropped below “prime” or excellent . . . 700 or higher at this writing.
Before you start feeling thankful to the banks, however, keep in mind that this move is in their best interest as over 50% of all American consumers today fall into the “subprime” categories . . . namely good, fair, poor, and bad. To stay in business, the banks need to be more open-minded and “open the purse strings” more frequently. More, with unemployment still at historic highs, loan and car sales have been increasing but not at the rate a more robust recovery would create. Auto dealers and loan officers need customers! They need YOU, even if you have poor or bad credit.
While of course those in the prime or “excellent” credit category get the lowest auto loan rates, paying 7% to 10% or more for an auto loan still keeps reliable, attractive cars affordable. Ask a parent or grandparent what they paid for an auto loan at various times. Interest rates peaked in 1981 at 16% and only dropped under 10% as recently as 1997. Our fast and simple online auto loan application and mobile auto loan application can get you driving within days. Want to keep an eye on lots of low cost online auto, mortgage, personal loans as well as the loan industry?
Offline, bricks-and-mortar bank don’t see any profit in it. A cash advance is typically for a smaller amount of money: $1,000 or less, for a shorter amount of time: one month or less. By the time you fill out the forms, take the loan officer’s time and absorb the light and heat the bank needs to keep branches open, their profit has dissipated. Online banks, on the other hand, have automated the process so efficiently, they can stay in business while offering small amounts of money for very short terms. The online banks are now even creating convenient cash advance apps for use on smart phones.
The teller isn’t as interested in what you need as in meeting his or her sales quotas for the month. If you hate the hard-sell, stay out of bank branches at the ends of months or quarters when sales numbers get submitted. All tellers and loan officers are sales people with new account goals set by their managers. They even spend time cold calling in the back office. The tellers get points when they encourage people to apply for a loan with the loan officers waiting in the desks and offices beyond the counters. The loan officers get points for every loan they close. 90% of new teller training is SALES training.
Probably not. Signing up for online bill pay, getting a debit card for a hobby business and setting up free checking all serve to get you more and more entrenched into that bank. In fact, these free/low costs offers are called “sticky.” If you saw a bank offered better rates down the street and wanted to move your account, you may be reluctant because the thought of setting up automatic bill pay, changing the checking to savings instructions on your accounts and getting issued new debit and other cards can feel pretty overwhelming. The more of these “products” tellers get you to accept, the more entangled you are in the bank.
Understanding the motivation behind what your local, brick and mortar bank teller offers can attune you to better offers at alternative financial institutions. Know that you can pick and choose the interest rates, terms and other details from a range of banks depending on what fits into your financial picture at the moment.
Over 43 million Americans have bad credit.
If you have bad credit, you might think you are stuck in a never-ending cycle. You need good credit to be approved for a loan, but you need to be approved for loans to build your credit.
If you can get approved for a loan, the terms are usually less than favorable.
Fortunately, there are ways to improve your credit quickly and easily. One option is to take out a short-term personal loan.
These types of loans come with many benefits and few disadvantages. They can help build your credit and don’t come with the tradeoffs that bad credit loans usually do.
Keep reading to learn more about the benefits of short-term personal loans.
Short-term personal loans allow you to have your cake and eat it too.
Most loans that those with less than stellar credit are approved for aren’t worth taking. The cost is often too high to the borrower.
And that’s if you can even get improved.
So if your credit doesn’t qualify you for a loan, how do you build your credit? This is where short-term loans come into play.
Short-term loans are less risky for the lender and the lender can expect to be paid back more quickly than with long-term loans. Short-term personal loans are customizable by the borrower.
This means you can choose a loan that works for you. If you simply want to use this type of loan to improve your credit, you can take out a loan for a few months.
So long as you repay the loan within the agreed-upon time frame, your credit score will improve.
For the most part, short-term loans will save you money.
When you have a long-term loan, you end up paying more interest. This is simply because you will be paying interest for such a long time.
With short-term loans, you pay back the loan in a much shorter amount of time. This means you’ll pay less interest.
Even if the interest rate for the short-term loan is higher because of your bad credit, the interest paid will be less in the big picture because of the shorter time paying interest.
The loan amount might also be smaller, meaning the interest paid will be less. Short-term personal loans usually have much lower interest rates than credit cards.
If you need a loan quickly, a short-term personal loan is the loan for you.
They are similar to payday loans in the fact that they are usually approved within just hours. Waiting to find out whether you will qualify for a loan can be torture, especially if you aren’t sure if your credit score will measure up.
While it depends on your lender, in most cases you will receive your funds either the same day or the next business day. This offers a level of convenience that is unique to the type of loan.
Short-term personal loans offer convenience and flexibility to the borrower. As mentioned above, the loans can be customized to fit your individual needs.
Most lenders are online and you can access their website 24/7. This means you can apply for a loan at any time and from anywhere.
Short-term loans are significantly less stressful than long-term ones.
You will avoid the dread of viewing your statements and continuously accruing interest for years at a time. Instead, you’ll see your loan being paid off quickly, boosting your confidence and your credit score.
When you have a long-term loan, the end is often not in sight. It’s easy for the looming loan to cause emotional stress.
Watching the interest accrue month after month and year after year can be downright torture. Even if you are making the minimum payment each month, you are barely making a dent in the principle.
Short-term loans avoid this problem and instead offer satisfaction upon repayment.
With short-term personal loans, you’ll know exactly how much you owe each month and for how long you will need to make payments.
These loans are sometimes offered unsecured as well. This means that you won’t have to put up collateral.
Common forms of collateral include personal assets like your home or car. Instead, your credit history and credit score will be enough for your lender.
If you have bad credit, you might be required to put up collateral. However, short-term loans are much easier to manage.
There is less risk of things getting out of control and you not being able to pay back the loan. As mentioned above, it’s easier to keep interest in check with short-term loans.
Therefore, your assets are at less risk. If you do end up going with a secured loan, you will have access to more favorable terms and lower interest rates.
Short-term personal loans offer you more time to pay than other fast cash options.
Payday loans, for example, have much shorter payback time frames. With short-term loans, you can set the repayment time frame so that it works with your life’s schedule.
You will also have more flexibility when it comes to choosing the amount of the loan. Borrowing limits are often significantly higher than you could borrow using a credit card.
If you are looking to secure a loan with bad credit or improve your credit score, considering applying for a short-term personal loan. Your loan will help you establish good financial habits.
Click here to start your application to see if you qualify.
43 million Americans have bad credit, with the bulk of these being young consumers.
While student loans and tough economic times can be blamed for this, poor planning and a low comprehension of credit facilities are partly to blame as well.
Cash advance loans are very convenient and can be hard to resist, but they can also put you in trouble.
How do these loans work, and how can you ensure to get the most out of them?
Here is an in-depth cash advance guide.
Your credit card lets you use your credit card to get a short term loan at an ATM or a bank. This is then paid back in the same way you pay for anything you put on your credit card.
In a way, this is like using your credit card to ‘purchase’ hard cash, which you then use to buy goods and services. In this way, you get to borrow cash against your credit card limit.
The same way you use your debit card to get cash from an ATM, you get cash from a credit card to be repaid with interest.
The difference between a credit card advance and a payday advance loan is that the latter is not dependent on your credit card.
If you typically do not carry paper money for your day to day spending, you might run into trouble when you need to pay for something at a business that only accepts cash payments.
In such cases, being allowed to convert your credit card limit into cash becomes very convenient.
Most credit card companies allow their clients to convert a percentage of their credit limit into cash, as opposed to the entire amount.
For most people, this translates into a couple of hundred dollars. This is therefore useful for smaller emergencies purchases and should not be dependent on for larger purchases.
While getting a credit card advance is easy, the interest rates can be a bit high.
Here are some of the associated costs that make it so:
These are determined by the financial institution that processes a transaction. This can be a bank or an ATM where you get your cash advance from.
If you use a bank outside your card issuer’s network, expect the fees to be higher.
These are determined by the company that issues your credit card.
These are charged in three different ways.
The first is by charging a percentage of the amount advanced. This can be as high as 5%.
The second way is by charging a flat fee per cash advance. For example, you can be charged $5 to $10 per advance, irrespective of the amount.
The third one is by charging the higher figure between the percentage or the minimum amount. An example of this is $5 or 10% of the withdrawal amount; whichever amount is higher.
To begin with, the interest charged on credit card loans is always higher than that charged on a credit card purchase.
Secondly, while you get a grace period with credit cash purchases, interest on cash advances starts accruing immediately.
It might be impossible to avoid this loan facility altogether.
For this reason, it’s key to know how to keep the costs low and avoid getting into unmanageable debt.
Here are a few tips.
The amount available for you to convert to cash is lower than your credit card limit. Exceeding this amount can result in higher interest rates and other over-limit charges.
Ensure to find out your card limit when you get a new card so you can adhere to a safe limit.
The key information to look out for is the one-off payable cash advance fee and the applicable APR as well.
If you are unclear on any terms of your contract, ensure to engage your service provider’s customer care representative.
Limit the use of this facility to emergencies you cannot use your credit cards on. It’s also important to create an emergency fund to draw from when needed.
If used without caution, credit card advances can spiral out of control making it difficult for you to make timely repayments. Consequently, this has the potential to lower your credit score.
Aside from only using this facility as a last result, limit your withdrawals to only what you need.
Resist the temptation to take out more because the higher you take, the higher the interest you will pay.
While this might seem like much, these amounts add up to a significant figure over time.
Taking out this facility does not directly impact your credit score, but it might have some indirect consequences.
The first one is that it raises your credit utilization ratio. This is among the benchmarks used to calculate your credit scoring. A high utilization ratio positions you as a high-risk borrower and may lower your scoring.
The other one is tied in with the costs of repaying a credit card advance. If you are not able to afford the high-interest rate, you may resort to late payments or even default.
When this information makes its way into the credit bureaus, it can negatively affect your scoring as well. As a rule of thumb, avoid making payments 30 days past the due date. Timely payment could help improve your credit score.
Ensure you understand all processing costs, the applicable APR and your ability to repay before taking out the loan.
Did you know that approximately 45 million Americans have no credit score at all?
If you’re part of this group, you might think that it’s impossible for you to get approved for a car loan. That’s not exactly true, though.
There are lots of loans out there designed for people with low credit scores, as well as those with no credit score.
Read on to learn more about no credit car loans and how you can increase your chances of getting approved for one.
If you have a bad credit score or no credit score, you can still qualify for a car loan. You just have to make sure you meet some other basic qualifications, including the following:
If you have filed for bankruptcy in the past, you may also need to complete some additional paperwork to show that you authorized to purchase a car.
Many car dealerships also work with specific lenders to provide financing to people who might not otherwise qualify for an auto loan.
When you begin looking to purchase a car, consider asking the lender which dealerships they work with or recommend purchasing a car from.
If you meet these minimum qualifications, there’s a good chance your auto loan application will be approved.
There are some other steps you can take to increase your chances even more, though, including the following:
You may think you have no credit history, but it’s a good idea to double check before you apply for an auto loan. You might find out that you do, actually have a credit score.
Checking your credit report also allows you to notice and correct any errors that might affect your credit in the future.
Figure out how much money you are able to spend on a car before you apply for a loan, too.
Think, specifically, about what you can afford to spend each month on the car and insurance. Don’t forget about maintenance and gas, too.
Doing these calculations and putting together a budget first will help you figure out how much money you should ask for when you fill out your loan application.
You’ll have an easier time getting approved for a car loan — even if you don’t have a credit score — if you’re able to put down a larger down payment.
This makes you a more credible lending candidate. It will also help to lower your monthly car payments, so it’s a good strategy for every car buyer to use.
You can also increase your chances of getting approved if you find someone who can co-sign your loan.
A co-signer is someone with a high credit score who agrees to take over your loan payments if you default.
Having someone co-sign your loan can help to bring down the monthly payments and give you better terms and interest rates.
A co-signer is a great option to consider.
Just keep in mind that it’s a big responsibility, and it can be difficult to find someone who’s willing to co-sign your loan. You may have to ask a few different people before you get a “yes”.
Make sure you have all the necessary documentation ready to go when you apply for your auto loan, too.
The following are some documents that will help you make a good case for yourself and prove that you can pay back the loan:
If you can provide these documents when you’re applying for a loan, you’ll have a much better chance of getting approved.
You can also increase your chances of having your auto loan application approved if you work with an online lender.
Online lenders are often more flexible than traditional lenders and are willing to work with a wider range of customers.
Keep in mind that online lenders also tend to have better loan terms and rates, so it’s worth working with them even if you do have a good credit score.
If you want to build up your credit score before you apply for a car loan, there are a few different steps you can take, including the following:
Once you have your auto loan application approved, you can also use that loan to build your credit score.
If you make the monthly payments on time, you’ll start building credit and will have an easier time getting approved for loans in the future. You might also be able to refinance your loan later to get better terms.
If you don’t have a credit score but need a car, you still have options (that don’t involve taking public transportation for the rest of your life).
There are lots of no credit car loans that you can apply for.
If you meet the minimum qualifications listed above and keep these other tips in mind, you’ll have a much easier time having your application approved.
Are you ready to apply for an auto loan? If so, we can help at First Financial.
Contact us today to learn more about our auto loan requirements or to fill out an application.
Whether faced with an emergency or you need to borrow, discover the benefits of a credit product that suits your needs and great reasons for a personal loan.
We live in one of the strongest economies in the world. Yet, despite that strength, wages haven’t kept up and about 40% of Americans struggle to make ends meet.
Fortunately, there are financial tools that people can use to help them meet their monthly obligations or dig out of debt. Personal loans have easily passed credit cards as a preferred form of debt.
What are 5 outstanding reasons to take out a personal loan?
Keep reading to find out.
Personal loans have moved past credit cards to become the fastest growing type of debt. To understand why let’s look at what personal loans are.
Personal loans are loans that you can take out for any reason. When you take out an auto loan or a home loan, it’s for those specific purposes. You borrow a certain amount of money at an interest rate determined by your lender and you make monthly installment payments for the term of the loan.
The terms of the loan can be anywhere from 6-60 months, depending on the amount you borrow. The great thing about personal loans is that they are available to people with good credit and bad credit.
Personal loans offer a lot more flexibility and stability than other forms of debt because you can take them out for a number of reasons, and you know what the monthly payments will be every month.
Would you like to improve your financial situation? In that case, a personal loan may be a smart move for you. Let’s look at some of the more common reasons for a personal loan.
The most common reason why so many people turn to personal loans is to consolidate credit card debt. The average person has about three credit cards, which means three separate debt payments.
Depending on your interest rate, you can be paying much more in interest over the long haul than what you actually paid for.
What a personal loan can do for you is you can pay off those credit cards completely and just have one monthly payment. The monthly payment is likely to be lower than what you’re paying out every month.
The interest rate is likely to be lower than credit card debt, too. That means that you’re saving on your monthly payments and paying less in interest.
Starting a new business is an exciting opportunity that does require some start-up capital. Most small businesses cost between $3,000 and $5,000 to start up.
That doesn’t seem like a lot, but when you are in debt or you are having trouble making ends meet, a personal loan can be a lifeline.
You can avoid the trouble of having to present a formal business plan when trying to get a business loan by getting a personal loan.
A personal loan won’t have the same strict requirements as a business loan, and you have the flexibility to invest the borrowed money as you see fit.
One of the reasons why people take out personal loans is because they want to take on a major home renovation project. A remodel could cost anywhere from $18,000 to $36,000 depending on the size and scope of the project.
Not many people have that kind of cash lying around, so they’ll turn to personal loans to finance the project.
It’s a smart move because these projects can add a lot of value to the home, which will increase the sale price. You’ll often see people renovate when they’re getting ready to sell, knowing that they’re going to see a return on those funds.
Car repairs, a medical emergency, home repairs, pet emergencies can all take a bite out of your finances. If you’re having a hard time making ends meet as it is, how will you be able to come up with the funds to these possibilities?
That’s where a personal loan can help you. One of the reasons why people turn to personal loans for emergency expenses is because they will be able to pay it back in monthly installments.
Your credit score determines so much in life. Your ability to get a home, an apartment, a job, or any other forms of credit all hinge on those three numbers that make up your credit score.
Do you have to start building up a credit history or rebuild your credit?
Taking out a small personal loan will help you do that. With a small personal loan that’s paid back on time and in full, you’re showing creditors that you’re responsible with debt.
That will also help you increase your credit score.
There are many reasons for a personal loan. When you do take out a personal loan, you want to make sure that you can either save money or make money.
Starting a business, consolidate debt, or start a home project that will pay off down the road are great reasons for a personal loan. The great thing about a personal loan is that you can take them out for any reason, even finance a vacation or a wedding.
Would you like to find out more about getting a personal loan for your financial situation? Find out more about First Financial’s personal loan programs here.
Like any financial option, the cash advance serves consumers well when used properly. We reveal the best ways to manage the cash advance in our previous posts about when to use it and strategies to pay it off.
While a cash advance can help you keep your computer, car or apartment, some use a second cash advance to pay for the first and then get caught up in an ever increasing interest rate and fee cycle. This habit erodes your long-term financial health.
When you get your very first cash advance, to ensure you can pay it off, try to make these lifestyle changes:
While the cash advance does come in handy in many situations, before applying for a cash advance, make sure you can answer the following questions positively.
When considering personal loans, don’t forget that online lenders have the automation and reduced overhead to offer the best loans and terms. First Financial is the national leader in providing cash advances for borrowers of all types, even bad credit borrowers. Just fill out some forms, upload documents and get the money in your account in a matter of days. The Better Business Bureau rates First Financial A+ because we make customer service our highest priority.
Buy now? In four months? In a year?
Some of the stress can be taken out of the home buying decision when you realize that mortgage loans can always be re-financed, although with some fees and hassle. Keep in mind, too, the old saying,
“The best time to buy real estate is always 10 years ago.”
Ten years into the future, you won’t remember how you fretted over whether you should wait or buy right now. You’ll have 10 years of family memories in the home and neighborhood you’ve come to love.
All this said, when making this huge decision, it’s wise to research where mortgage interest rates are going in 2016. This past spring the most influential economists predicted that the Federal Reserve would raise the prime rate this fall in the August meeting. But then China became unstable, Greece revisited bankruptcy and American employment figures disappointed many. Interest rates stayed the same.
So, once again, now in the fall of 2015 pundits expect Janet Yellen and “the Fed” to hold off raising the prime rate (which in turn raises the mortgage rates) until the beginning of 2016, if then. Keep in mind, too, that America is facing a new challenge. The millennials, many of which are going into their home-buying 30s, seem to be holding off on buying homes. With their parents impacted by the recession, students themselves took out loans, many of which were as predatory as the balloon and interest only home loans that got their parents into trouble. Recent grads now shoulder an average of $30,000, and some have $100,000. They’re paying interest and principle on this big debt, eating into their home fund monies.
Particularly after seeing parents and friends lose homes, this huge generation (90+ million by most counts) seems fine with renting for the foreseeable future. In fact, it’s the renting millennials who’ve driven rental prices up in the past three years. Millennials aren’t exhibiting the home ownership drive their parents did. They’ve learned that Europeans rent families rent the same homes for generations, and don’t necessarily see home buying as the only signal of success. Finally, the tiny home and simplicity movements tell us that the millennials may not buy into the 3,000 square foot, brand new home. Therefore, home prices may not rise as they did in in the early 2000’s.
For now, housing prices may rise a bit over the next year, but most agree that they won’t skyrocket. Federal Reserve officials keep dropping that they’ll raise rates only when the data indicates the economy is heating up. With this month’s disappointing employment report, yet again, that doesn’t look like a possibility soon. Keep in mind that for the last three years, quarter after quarter, economists have been saying that THIS is the quarter the economy will rebound with a vengeance. Still, we’ve had at least 12 quarters of just tepid growth.
If unemployment takes a big dip and inflation looms on the horizon, Yellen will have to tighten. If that first rate hike doesn’t torpedo the stock market, she will continue throughout the year, but ever so gently.
The bottom line? Mortgage rates creeping up but very slowly in 2016. Watch the employment reports. The minute “employment leaps,” rate increases will heat up.
First Financial’s Online, Mobile Mortgage Loans for Subprime Borrowers
First Financial’s lending partners can provide lower interest rates on mortgage loans because of their cost-saving, online structure. Apply for an affordable mortgage loan here, particularly if your credit rating is “fair,” “poor” or even “bad.” We specialize in getting families with subprime credit into homes. Fill out the application in minutes. Follow First Financial on Facebook to get smart budgeting and saving tips, too!
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