AutoFinancing.net » Your Car Loan Dictionary

PayDay Loans

dennis — Thu, 18 Dec 2008 07:29:51 +0000

Payday loans give you the money that you need to make it through to the next payday without having to resort to credit card borrowing. You can have the cash that you need and use it anyway that you like when you get payday loans.

In order to qualify for payday loans, you have to have a job. As long as you are employed, you can get a payday loan when you run short because of some unforeseen circumstance that cannot wait until your next payday. Even if you have poor credit, you can still get payday loans. For most people, getting payday loans makes better sense than using credit cards that usually come with a very high interest rate as well as miscellaneous fees, especially if you need cash. Payday loans can get you the cash that you need, when you need it and you can just pay it on your next payday.

Voluntary Auto Repossession

dennis — Wed, 29 Oct 2008 13:59:41 +0000

Have you done everything you can to avoid auto repossession, then you may want to consider a voluntary auto repossesion.

Voluntary auto repossession is a process that involves voluntarily returning a vehicle that you have purchased back to the dealership or bank. Many people choose to do this when their financial situation takes a turn for the worse and they are unable to make their car payments. It is important to note, however, that turning the vehicle in does not reflect well on a person’s credit report and also that it does not eliminate the borrower’s liability on the loan.

What typically happens in a voluntary auto repossession is that the dealership or bank will try to resell or auction the vehicle off. The amount of money made on the sale of the vehicle will be deducted from the amount still owed on the loan and the borrower will be responsible for the rest. This will still have a negative effect on the borrower’s credit rating and may still leave them owing quite a bit of money.

Before making the decision to voluntarily turn a vehicle in a person should call the bank and get the payoff amount on their loan. Then they should look at what the current blue book value for the vehicle is and what similar vehicles in their area are selling for. If it seems feasible to sell the vehicle for close to the loan payoff amount, the person would be much wiser to go that route as an early pay-off of the full amount of the loan will have a much better effect on their credit rating.

Other alternatives to voluntary car repossession include remortgaging a home to consolidate date and reduce the total monthly financial obligation. This may be a wise choice for many people when their income is reduced and/or their debt has become too great. Of course, if there is no other viable option, a voluntary car repossession and subsequently filing a bankruptcy may be the only way out of the debt, but it is important to remember that while you may no longer owe the money the consequences of this choice will last for many years to come.

Avoid Auto Repossession

Car Repo

dennis — Wed, 29 Oct 2008 13:50:21 +0000

Car repo also known as car repossession is when a creditor takes back possession of a vehicle that a person has stopped making their scheduled car payments. Usually a lender will wait until a person has missed three scheduled car payments, but a person must be careful to read their contract because in some cases a car repo can take place after just one payment is late. This can be a source of great frustration for a person who has suddenly become unable to make their car payments. If you are in this situation, there are ways to avoid auto repossession.

What is the process that is involved in a car repo? A lender may or may not give any warning that the vehicle is going to be repossessed. The lender will hire a “repo man” who will stake out the vehicle and tow it away when the owner least expects it. The repo man’s objective is to remove the vehicle without being detected by the owner to avoid a confrontation. A vehicle’s delinquent owner could come out of work one day and find their vehicle has disappeared.

Next, the lender will resell or auction the vehicle off. The amount of the sale may offset the cost of hiring the repo man and preparing the car to be sold including replacing the ignition lock and cutting a new set of keys. Then any remaining profit may be deducted from the former vehicle owner’s loan amount and the person is now responsible to pay the debt. Many times the person who has had their vehicle repossessed ends up owning close to the purchase price of the vehicle that they no longer have possession of. This makes a very good case for purchasing a vehicle that fits well within a person’s budget and doing whatever is possible to keep the payments current.

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How Auto Refinancing Works

admin — Thu, 23 Oct 2008 13:01:32 +0000

Similar to a Home Refinance, an Auto Refinance will lower your rate, and lower your payments. Many people will also use an Auto Refinance to change the ownership of the car. There are many reasons for doing a refinance.

– You’ve improved your credit, and think you deserve a lower rate.
– You didn’t do your homework and got stuck in a bad loan.
– You want to take advantage of the lower lending rates.
– You want to change the names on the lien.

– You want to lower your payments, or extend the length of your loan

If any of the above explain your situation, you would be a likely candidate for an Auto Refinance.

How Refinancing Works

1. You should first contact your current auto lender to determine what your payoff amount is.

2. Fill out our Auto Refinance Application

3. If approved, you will get a loan packet, along with a check that would be sent to your current lender to pay off the existing car loan.

4. You will then begin to make the lower payments to the new lender.

Apply for Auto Refinancing

Auto Refinancing

Smart Loans Auto Financing

joe — Sun, 14 Sep 2008 23:49:00 +0000

Smart loans auto financing is one strategy a borrower can use to lump a month’s worth of loan payments into one. Sometimes seen as a consolidation strategy, smart loans and us smart loans can help some borrowers get ahead in their payments. But loan consolidation programs on the whole demand careful scrutiny before any are actually attempted. Many times loan consolidation programs, especially us smart loans auto financing programs, will offer a fantastic way to lump, for example, a mortgage payment and a car payment into one monthly payment. These offers often come with an incredibly low interest rate. What is often missed by the borrower, though, is that the interest rate in time will become variable, or changing, and those steady and easily-managed monthly payments could become so high as to be nearly unreachable. But for a borrower determined to pay off their loan in its entirety before their interest rate changes, smart loans auto financing could be a very profitable strategy.

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0% Auto Financing

joe — Sun, 14 Sep 2008 23:47:25 +0000

0% auto financing means an auto dealership will give a car-buyer an auto loan without interest. While there is usually a down payment involved, the buyer will not have to pay interest on the amount borrowed. That’s right: 0% auto financing will provide a loan free of interest payments. This could seem like a great deal. But buyers need to know when zero percent auto financing works for their benefit and when it works against it.

Why zero percent auto financing is difficult to get: credit scores and loans. Zero percent auto financing is difficult to acquire because it’s usually offered to such a thin slice of qualified buyers. In order to qualify for any auto financing loan, even one with zero percent, a borrower needs to have a good credit score. Only buyers with nearly spotless credit ratings can qualify. And even those buyers with some very slight tarnish on their credit scores could be refused.

Select vehicles and options often erase the 0% auto financing option. Zero percent auto financing is only often offered as a financing option for the dealer’s choice of vehicle. Slower-moving vehicles are often tagged with the 0% financing incentive to move cars off the lot. This works fine for people looking for vehicles that aren’t selling well. But for buyers looking to buy a more popular vehicle, or for those searching for specific vehicle options, zero percent financing may not apply. While a dealer may be happy to provide someone looking for a car with, say, leather seats instead of cloth seats, the loan that previously didn’t have any interest may suddenly find itself coming with interest charges.

0% auto financing often discredits manufacturer’s rebates. Auto dealers will often offer a 0% percent auto financing option to attract potential buyers to a dealership. When a buyer looks to capitalize on a manufacturer’s rebate as well as the 0% financing, the dealer tells her it’s one or the other. But this can sometimes work to the benefit of some borrowers. If your credit score doesn’t qualify you for the 0% auto financing, you can search out the manufacturer’s rebate and still save yourself money.

Zero percent auto financing can sometimes be more expensive than interest-charging loans. Depending on the interest rate and a borrower’s qualifications, an interest-bearing loan can sometimes be more affordable on a month to month basis than options offering zero percent auto financing. Often, a dealership will offer a zero percent auto loan for a much shorter term than a typical, interest bearing loan. This quickened repayment schedule will cost the borrower more each month than a traditional, longer interest bearing loan. Let’s use an example. Say the loan amount for a new car is $20,000. Through a typical interest bearing account, and ignoring any down payment, a buyer would stand to pay off the loan in about 72 months. At 6.75% on the loan, the buyer would pay about $296.53 each month. With a zero percent auto financing option, that same buyer would need to make her payments in a far shorter period of time. Let’s say bout 36 months, which is typical for zero percent auto financing. Those $20,000 would cost our zero percent buyer $555.56 each and every month.

Apply for other types of auto loans.

Second Chance Auto Financing

joe — Sun, 20 Jul 2008 00:03:06 +0000

Second chance auto financing is really what it says it is: literally a second chance for borrowers with lower than average credit scores. This financing option allows borrowers to both obtain an auto loan and, by making their payments on time, work to clean up their credit history. But don’t think they’re easy. Many of the second chance auto financing options offered to borrowers come with higher than normal expectations. A second chance auto loan may include a higher than average interest rate, and may include a demanding repayment schedule. But if you’re ready, second chance auto financing can help you not only drive away in your new car, but also help you regain the kind of credit score you deserve.

Apply for other types of auto loans.

In House Auto Financing

joe — Sun, 20 Jul 2008 00:02:05 +0000

Sometimes called a buy here pay here program, in house auto financing gives drivers with poor credit scores the opportunity to qualify for their much-needed car loans. Traditionally, car dealers go through banks or other lending institutions to get the money loaned to a new-car buyer. With in house auto financing, the dealer itself loans its own money to the borrower. That loan is usually structured similarly to bank loans, where installment payments are due at regular intervals. But with in house auto financing, instead of sending checks to a bank, the borrower sends those payments back to the same lot where the car was purchased. Because the dealer has so much invested in the borrower, it is not uncommon to find excellent automotive buys through in house auto financing programs.

Apply for other types of auto loans.

0% Auto Financing

High Risk Auto Financing

joe — Sun, 13 Jul 2008 02:31:45 +0000

High risk auto financing works to put people with lower than normal credit scores right in the driver’s seat of their own car. Even with a poor payment history, you can get a loan and get a car. Auto financing high risk borrowers does come with a price, though. Becuase the loan’s repayment is rather uncertain, high risk car loans may come with higher than normal interest rates, and other fees not normally associated with auto financing. But high risk auto financing is very often the perfect opportunity to turn a borrower’s poor credit score and poor credit history into a very positive one, making it even easier to drive away in your own car.
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Upside Down Auto Financing

joe — Sun, 13 Jul 2008 02:30:13 +0000

If someone has upside down auto financing, it means a buyer’s car is worth less than the total amount she’s paying for it. Let’s use an example. Say a car was purchased for $20,000 with $3,000 down, and financed over a 72-month term. In a few years, the buyer decides she wants to sell the vehicle. The total loan payoff is $15,000, but the car is really only worth $11,000. That makes the car’s owner $4,000 upside down in the car loan: She owes $4,000 more than the car is really worth. If she decides to sell her car, that $4,000 will end up being added to the price of the next car she buys. Unfortunately, an upside down car loan isn’t that uncommon. If you have upside down auto financing, you’re not alone. Most new-car loans have nearly $4,000 added to them to account for an upside down car loan. But you can take some steps to better handle what lenders call having negative equity. To avoid your upside down car loan, try to:
1)  Make extra payments when you can afford it. The quicker your loan is paid off the sooner you get to own your car’s actual value.
2)  Measure your down payment and loan amount when you buy, so the time it takes to pay off your car matches your car’s lifetime value as closely as possible.
3)  Check for financing options that will let you best negotiate the terms of amounts you may still owe on an existing purchase.

How can I get out of an upside down car loan?

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