First Financial  
 

First Financial rate comparison

Personal Loan Vs Car Loan: Whats The Difference?

Personal Loan Vs Car Loan: Whats The Difference?

Personal Loan Vs Car Loan: Whats The Difference?

personal loan vs car loan

It’s important for an individual to distinguish between a personal loan and a car loan. We share how to tell the difference between a personal loan vs car loan.

Keyword(s): personal loan vs car loan

An average new car in America will set you back $32,000. This amount is too steep for many to pay for in cash.

For most people, taking a car or a personal loan is the most viable option but which should you go for between the two?

To answer that question, it’s important to understand what each of these options entail. In this article, we shall make an analysis of personal loan vs. car loan to help you make the right choice.

Personal Loans

A personal loan is an unsecured facility that provides the borrower with funds from the lending institution. The institution is most often a bank.

The funds are advanced in a lump sum, and the borrower can channel their loan funds towards any venture they see fit. These loans typically range from $1,000 to $ 50,000.

A personal loan can also be secured, meaning you attach an asset of value to your loan. On default or inability to repay your loan, the lending institution can seize the property to recoup their funds.

However, most borrowers opt for the unsecured loan.

Interest Rate

Because of the risk involved, unsecured loans attract higher interest rates than secured ones.

Their requirements are also more stringent, with the borrower’s ability to repay and previous credit history being scrutinized.

It does not end there, the amount you qualify for, and the interest rate at which a lender advances your loan are both dependent on your credit rating.

Even though there are things you can do to improve your credit rating, you will have to contend with high interest rates if your rating is less than stellar.

Loan Term

Personal loans have a repayment period attached. The longer the repayment period, the higher the interest you will pay by the time the loan comes to term.

The reverse is also true; you pay less interest with shorter loan terms. However, you should go for these only when you are absolutely confident that you can comfortably pay the higher amounts.

Car Loan

These loans are considered a secured loan.

The security, in this case, is the car you intend to buy. If you default on your payments, the dealer repossesses the vehicle to recoup his money.

The borrower makes fixed payments over the duration of the loan. As the borrower, you take physical ownership of the vehicle, but the financier owns the asset until you make your final payment.

Interest Rate

Because the car you buy is also collateral for your loan, a car loan is deemed to be low-risk financing.

It, therefore, attracts lower interest as compared to a personal unsecured loan.
The interest rate is also fixed from the onset, cushioning borrowers from increases experienced with personal loans.

Loan Term

Most car repayment terms are under 36, 48, or 60 months. Again, the monthly payments are higher for shorter repayment terms and lower with longer repayment terms.

Conversely, the interest paid is higher for more extended repayment periods than for shorter ones.

Unlike a personal loan where your credit history features prominently, your credit rating does not significantly affect your car loan application.

Similarly, an unfavorable credit rating does not significantly impact your borrowing amount nor interest rate.

This means you can still go for a pricey car with a poor credit rating.

Personal Loan vs. Car Loan: Pros and Cons at a Glance

As already discussed, these loans have their similarities and differences. They also have their advantages and disadvantages.

Personal Loan

The merits or personal loans are two-fold.

The first is that you can use your personal loan for a car, or channel it to other uses, partially or wholly. As such, a personal loan also offers more flexibility in repayments.

Personal loans do have a downside, however.

Due to their unsecured nature, personal loans employ stricter eligibility criteria and requirements. Upon qualification, you also pay higher interest rates.
Personal loans also lock out people with poor credit scores.

Car Loan

Car loan applicants enjoy lower interest rates, with faster approval processes. If you need a car and have a poor credit history, a car loan might be the only financing option available to you.

This notwithstanding, you need to put up a deposit to get a car loan. The amount will be dictated by the total cost of the car. This can be limiting.

In addition to this, you do not fully own the car until you have made your last payment.

Tips for Shopping for Financing for a Car

Whether you go for a personal or a car loan, there are tips to help you find a good financing option.

1. Determine How Much You Can Spend

Determine how much you can afford to spend. A rule of thumb is that you should be able to repay the loan within three years.

This cuts down the amount of interest and prevents you from paying more than the real value of the car.

2. Make Loan Comparisons

Contact your local banks and credit unions to see if you can be pre-approved for a loan, and what the interest rates are.

Compare bank rates with dealership rates, and do your research on any discounts that can be offered to you.

Find out if setting up automatic loan repayments or switching banks will lower your interest rate as well.

All this information will point you towards the most affordable option.

3. Have Your Financial Information Ready

The pre-approval process may include producing proof of income documents.

Be ready with this information, as well as any other financial information that can help your loan be approved and disbursed faster.

4. Start Shopping Around

When you reach advanced stages of loan approval, you can get to the fun part, which is shopping for and test driving different cars.

A personal loan offers more leverage in terms of bargaining power on your car of choice.

Do not shy away from negotiating with a dealer either. Shop around and find out the going rate for the car you want.

If you have an older car, it might seem easier to trade it in. While this is one way to go about it, selling your old car independently will give you a better return than trading it in.

Which Should You Go For?

The key take away on the personal loan vs. car loan question is to understand the differences and measure either type of loan against your circumstances to find the best fit.

First Financial is a leading financial solution provider to people with a poor credit score. Contact us today if you are in need of a personal or a car loan.

How Wedding Expenses Pay for Themselves Long-Term: Recent Research

bride and groom holding hands in heart shape

Couples getting married today may wonder if the investment in a big wedding is worth it. And of course all kinds of family members have their opinions. And they have a point: the average cost of a wedding in the United States in 2017 was nearly $26,000. That money could go to the down-payment on a house, a superstar honeymoon or zucchini spiralizers for everybody!  (Millennials love their vegetable pastas.)

Don’t jump to thrifty Aunt Gargamel’s notion that a wedding is a waste of money, however.

Psychologist Charles Kiesler studied the correlation of weddings and long-term marital success. He found all kinds of advantages to spending for that once-in-a-lifetime celebration.

After decades of research Kiesler concluded, “commitment is strengthened when it is publicly declared because individuals strive to maintain consistency between what they say and what they do.” In other words, a big wedding with many witnesses typically leads to a drive–even a need–to follow through on the commitment. The couple says their vows in front of their community, making a pact, not only with each other, but with all the onlookers as well.

Kinda makes sense, right?

The other advantage of a having a meaningful wedding is the effect it has on the two families involved. During the run up to the event, family members and even friends of the two partners get to know each other. They work together on different projects and share their experiences with the couple. Any time more connections are made throughout our society, the better. New friends are made at weddings. New couples even form when members of the wedding party peek around the bride and groom to bat eyes at each other. We are a social species after all, and extensive research has proven that the stronger and more numerous our connections, the happier and healthier we are as individuals. Having the wedding creates a strong network for the couple to rely on as they tackle big challenges like children, work stressors and deaths in the family. This safety net is priceless.

We know: the wedding is still $26,000! And with the economic downturn of 2008 – 2012, many parents of the those getting married are working madly to save for their own retirement rather than a child’s wedding.

One way to make the price a little more bearable is to take out a personal loan that you pay off monthly for several years. A $26,000 loan at a 7% rate for a 5-year term will run a couple $515 per month. Cost-cutting couples who marry in a park and follow it up with dinner at a reasonable venue can get away with a $10,000 wedding. Amortized at 7% for 5 years, the monthly payment comes down to $198 per month. Both of these figures assume borrowers have “good” credit in the 700 to 720 range.

The personal loan at 7% is a far better option than running up credit card debt where rates run from 15% to 29%. With the money coming up front, however, couples must learn how to budget carefully and with discipline. Having a big lump sum tends to tempt even the cautious to be more loose with cash, getting those extra centerpieces or consenting to let extra people come to the wedding.

With this in mind, take these steps to stretch every penny of the personal loan you qualify for.

  • Get quotes for all venues and services up front
  • Create a spreadsheet that makes comparing venues clear
  • Use cash for the down-payments to reserve venues and vendors
  • Enter all down-payments and payoffs into a budget spreadsheet, including dates

This way, when the loan arrives in your bank account, you can quickly send it to the appropriate vendors before you’re tempted to spend it. Luckily, you have an accountability partner: your betrothed!

But this could be where it gets tough. You don’t want this exciting time to be marred by bickering and disagreement. Be ready to compromise and give up some of your own wishes. Set expectations from the beginning and try to keep it fun rather than stressful. Of course, no two people approach finances similarly. Consider even working with a pre-marital counselor to figure out how you will negotiate different decisions and the budget. That $150 (per session) will come back to you many times over.

Get a Personal Loan for a Wedding: What the Bank Wants

That you’re even reading this post indicates your sincerity about doing everything you can to plan your wedding the right way. Because you won’t need to put up any “security” (car and home loans are “secured” loans), it’s considered an “unsecured loan.” Prepare to apply online for a personal loan for your wedding when you get these documents together.

Proof of income:

  • Bank statements
  • Any and all debts you may have including student loans
  • Basic income and identity documentation such as W2’s, drivers license
  • Social Security card
bride and groom after wedding

A+ Rated First Financial Has the Low-Cost, Online Personal Loans for Your Wedding

First Financial has connected thousands of brides and grooms with low-cost personal loans for weddings. Financing your wedding with an online personal loan is smart money-management. Online lenders can offer lower cost-loans because they don’t have the bricks-and-mortar branches, labor and marketing costs traditional banks do. More, online lenders offer MORE loans to MORE applicants because, with lower costs, they can take risks on more applicants. In fact, online lenders are renowned for acceptance rates far higher than those of traditional banks.

5 Ways to Be Debt Free by Christmas

Family Celebrating being Debt Free

 

Most people have some debt, but if your situation has gotten out of hand, now is the time to figure out how you can pay it off before it gets even worse. By figuring out how much you owe, picking a strategy to pay it off, and making a couple sacrifices along the way, you could be debt free by Christmas.

Here’s how to get started:

Know how much money you owe

The first step to paying off the debt you owe is to figure out exactly how much debt you’re in. You may have avoided doing this because you’re scared of the number, but it essential as it will help you keep perspective and figure out a plan to pay it off. Gather all debts you owe, from credit cards to student loans to medical expenses, and calculate how much it all adds up to.

Develop a strategy

The next step is to develop a strategy to pay off the debt. This is important. Picking and being able to stick to a strategy will help you pay down the debt faster, while also knowing that the sacrifices you’re making to do so have a set end date, giving you some peace of mind. There are two main strategies to pay off debt: Debt avalanche and debt snowball. The first one is the fastest, and has you pay off the debts with the highest interest rates first. This can save you a lot of money over the long term, but you won’t feel much progress is being made at first.

If you feel as if you need to see yourself making progress to stick to a strategy, debt snowball is likely for you. This strategy takes the opposite approach. Arrange your debts from smallest to biggest (ignore the interest rate) and begin paying off the smallest ones first. This will help you see that you are making progress, but will likely cost you money over the long term due to interest.

 Commit a set amount of money to the debt

 Another excellent way to help you pay down your debt steadily is to set aside a set amount of money every month and put it towards the debt. Start out by calculating how much you need to spend per month on necessities (include building up an emergency fund) and then subtract that from your total monthly income to get an idea about how much you can put towards the debt every month. The higher the debt, the more of that money you will want to dedicate towards it.

Get a side job

Even with these strategies, paying off these debts is no easy task. It takes persistence and sacrifice for possibly years. One way to help you but a bigger dent in the amount you owe is to get a side job. Even if it’s just on the weekends doing something simple, you could easily find yourself with a couple extra hundred dollars at the end of every month to put towards the debt. It may not sound like a lot, but it could save you hundreds if not thousands over the long run, and you’ll have that debt paid down much quicker.

Happy debt-free people

Renting a room

When calculating your total monthly expenses, chances are the rent towards your apartment is what is eating up most of your budget. You could downsize to a smaller apartment, but this would involve lots of paperwork and being stuck there for a few years. An alternative solution is to rent out a room in someone’s house or apartment. There is little to no hassle, and with the money saved, you could put even more towards the debt or perhaps avoid getting that side job. Either way, if you owe a lot of money, this is certainly an option to look into.

 

Where to Get On-Shore & Off-Shore Tech Support Reps

TECH support reps with headsets

 Software and software-as-a-service products have been booming for the past 20 years. Anymore, it’s not just computers and cars that need software. It’s high-end coffee-makers, showers (really!), and the refrigerator. The Internet of Things (IoT) makes it so.

When these ubiquitous household devices need setting up and troubleshooting, chances are, the average American becomes incredibly FRUSTRATED. That’s when they get online with tech support.

IBISworld.com, the leading premiere business industry research website, has found that the tech support industry will grow “faster than the average for all occupation.” over the next ten years. The U.S. Bureau of Labor Statistics (BLS) concurs in its findings that computer/tech support specialist will increase 17% from through the year 2022. The U.S. Department of Labor also mentioned that the computer systems services industry is one of the economy’s “largest and fastest sources of employment growth.”[1]

If the proliferation of the Internet of Things doesn’t convince you, consider the software-as-a-service companies like DropBox, Sales Force, and Google Apps. Even Microsoft Office 365 now lives in the cloud. Downloading a $600 program will be replaced by a $20 monthly subscription that the provider hopes lasts three years or more. Where once, Photoshop and the graphic designers who used it cornered the market, today, consumers have turned to SaaS products like Canva and PicMonkey, much of which can be used for free. And yet . . . they can be confusing to a large portion of the population. U.S. based technical support services have no place to go but up.

The tech support company’s potential is most often hampered by capacity. After all, one forward-thinking entrepreneur can’t answer all the calls 24/7. Every tech support company needs a reliable workforce. Where then, can an American entrepreneur find the professionals who can help him or her competently guide consumers past their set-up instructions and general confusion? More, where can a technical support entrepreneur find people at a labor cost that will keep him or her in business.

Off-shore v. On-shore Technical Professionals

 To pay one-third or less for technical support staff, entrepreneurs must go overseas. Those who aren’t off-shore human resources specialists must depend on third parties who’ve become experts in these fields. A few include:

  • Info link– Provides resources and services for outsourcing technical product and IT support. 915-577-9466
  • Invensis Technologies– Provides outsourced contact center, help desk, IT outsourcing and business process outsourcing services globally. 302- 261-9036
  • J-Curve Technologies – Provides technical and operational callcenter outsourcing solutions. 602-792-6100
  • Nirix – Provides remote IT support, offsite data backup, on-site computer services, managed email hosting. 780-414-1556

Once these services provide you with candidates, you can vet them with you own list of questions. We suggest choosing from the following:

  • What makes you a superior technical support specialist?
  • How do you approach customer service?
  • How do you calm upset, frustrated customers?
  • What positive or negative feedback from a customer has made you a better tech support specialist?
  • What has been your best strategy when you don’t know the answer to a question?
  • How would you go about becoming a subject matter expert for your employer?
  • Scenario: “My software isn’t _________________. How would you help me fix it.”

A+ Rated First Financial Helps Tech Support Companies Stay in Business

Anymore, every business owner must be able to process credit and debit cards via the internet, particularly tech support.

If you’ve learned that banks consider your tech support business to be high-risk, you may have to consider alternative merchant services providers to make monthly payments possible. With lower marketing costs and overhead, reliable internet merchant services providers provide all the traditional bank safety at reasonable rates.

Aware that categorization as high-risk can be arbitrary, First Financial specializes in these cutting-edge, often new, industries. The computer hardware industry was once considered high-risk because banks considered PCs and Macs unproven. Now every family has one or more for each member! Apply for our tech support merchant services today here!

[1] Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition, Computer Support Specialists, on the Internet at http://www.bls.gov/ooh/computer-and-information-technology/computer-support-specialists.htm

Buying a Car when 72- and 84-Month Auto Loans Are the New Normal

Happy embracing couple planning their home kitchen furnishing renovation. Sketch kitchen drawing.

“The market is now comfortable in the 75-month terms.”

– Melinda Zabritski,  senior product director of automotive finance at Experian Automotive

 If you haven’t bought a car in a while, you may be surprised when the car dealer explains that you can buy more car than you thought possible. It’s not a scam and a wishful-thinking salesperson. The changing nature of both cars and car buyers has prompted auto lenders to extend loan terms, bringing monthly payments down.

Those of us of a certain age will remember that in the 1970s and 1980s, a car with 100,000 miles was destined for the junk yard, a hazard no one dared to drive. While the 100,000 mile end-life of a car has been a tough perception to shake, attitudes are changing rapidly.

The Proof Is in the Power Train

Vigorous global competition among auto manufacturers has pushed automobile quality higher over the past 20 years. Today, the classified ads are full of Volvo’s, Honda and more with 200,000 miles and cab drivers brag of getting their Toyota Prius to 600,000 miles . . . with their original batteries, no less!

Not only are cars being designed for longer life, advances in science and engineering have helped created more durable materials. Carbon finishes on parts now approach the strength of diamonds, ensuring that each part remains intact far longer. Hyundai and Kia now include 100,000-mile/10-year warranties on all of their cars’ powertrains.

Increased longevity means that a car’s value as an asset has increased. It only follows then that banks feel more comfortable lending for a longer term. The average car on the road in 1977 was 5.5. By 2014, it was 11.4, a change that indicates not only improved car quality, but a shift in the American mindset.

Pride in Long-Term Ownership

Where once, buying or leasing a new car every two years indicated success and wealth, now it just seems foolish. Conspicuous consumption has been replaced by an ethic of value and sustainability, and car buyers are looking to stretch their dollars by keeping their cars for as long as they can. Banks, therefore, not only have more confidence in the long-term value of the car, but in the trustworthiness of the buyer. Millennials are far more willing to buy a used car than their parents were.

84-month auto loan for red car with cash

Longer Auto Loan Terms Can Mean More Car for the Money

With longer loan terms, buyers are making bigger, better purchases.  The car buyer with a $300 monthly budget may be able to buy new rather than used. He or she may also choose the certified pre-owned car rather than the questionable auto obtained through private sale. While the loan will last longer, the ability to buy a better car provides more value to the buyer. Down the line, as a trade-in or sale, the car will win the buyer more cash. The average subprime loan amount as of August 2016 was $29,359 for a new car and $16,120 for a used car.These figures are up 3% and 1.3% respectively from the same time last year.

If it’s time for a new or new, used car for you, make sure to check out our loans for all credit types, even bad credit!  Those with bankruptcy still on their credit reports still can get a car loan for a used or even new car. It takes just three minutes to apply here for a new or used car loan at the lowest rates!

 


First Financial

First Financial ® Corporate Headquarters 2850 Womble Road Suite 100-604 San Diego, CA 92106

Client Service Center:  Main: 1-800-315-7791  Fax: 1-800-215-0217 (Monday–Friday 5:00am–6:00pm Pacific or 8:00am–9:00pm Eastern)

Merchant Services / High Risk Merchant Accounts: Main 1-800-950-0212  Fax: 1-800-215-0217

 

Advertiser Disclosure: This website is an independent, advertising-supported comparison service.

The card offers that appear on this site are from companies from which this website receives compensation.

This compensation may impact how and where products appear on this site (including, for example, the order in which they appear).

This website does not include all card companies or all card offers available in the marketplace.

This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

First Financial® is a Federally Registered Trademark

©1994-2019 First Financial®, All Rights Reserved. All other products and company names are trademarks of their respective companies.