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How to Obtain Finance For Used Cars

Do you desperately need to buy a car but do not have the finances to do so? Well, you can always opt for a loan to buy used cars. A lot of companies have started finance schemes for selling their used cars better. Many people who need to buy a cheap car but cannot afford to do so take up these loans. If you do need financial assistance when you are buying cars, you may take up a loan. However, you must know that the loan for a used car charges higher interest than loan for a brand new car. For example, if you have to pay an interest of 12 percent on a brand new car, then you would have to pay around 15 percent for a used car of the same make and manufacturer. Even though it seems strange, there are quite a few pieces of logic that are applicable here.

1. Financiers are unaware of the true price a used car

When you buy a new car, its value depreciates by almost 50 percent when it rolls out on the road. Judging your drivability, the cost of the car, make and manufacturer, the financier would be able to calculate the true price that your car would command five to seven years later. Therefore, they would know exactly how much they would be able to recover in case you default on your loan and they have to tow your car away to auction and repay the loan.

However, when it comes to used cars, the depreciation value cannot be calculated clearly because the wear and tear on the car cannot be clearly calculated in case of old cars. Therefore, financing companies cannot clearly gauge how much they would earn from selling your old car. In the event of you defaulting on your loan, they would not be able to recover enough money to pay off their loans. Hence, to offset their losses partially, they lend money for old cars at a higher rate of interest.

2. Credit History of Buyers

Bankers usually believe that those people buying used cars with loans would not have good credit history and hence they charge higher loan interests in order to discourage them from taking loans. Moreover, higher interest safeguards them against defaulting habits of customers with low credit scores.

3. Bankers want you to buy new cars

Since most of the financing for used cars are offered by banks rather than the car manufacturers themselves, banks elevate the interest payable on loans for used cars so that buyers opt to buy new cars. New cars are a safer investment for banks and hence banks encourage buyers to take loans for buying new cars

There are however exceptions to this rule especially when buyers opt to buy used luxury cars. Most buyers opting for used luxury cars are C segment car users who want to upgrade to luxury cars. They are judged to be safe customers who have good credit history. The loan rates for luxury used cars are around 11 percent which is almost 4 percent lower than that of used affordable cars. Therefore, those buyers with a budget of Rs 15 to Rs 20 lakhs should opt for a used luxury car instead of a premium sedan of the same price because the drive experience would not be the same for both.

If you are thinking of opting for finance for used cars, then you should prepare at least 6 months before taking out your loan.

Monitoring your credit score

Keep a check on your CIBIL score because it determines the rate of interest payable on your loan for used cars. A score above 75 is considered to be a good one and hence you should aim to have your score above this benchmark. By checking your credit score regularly, you will be able to determine whether everything is in order and in any case of discrepancy, you can contact your bank and get it rectified.

To elevate your credit score, you should have very few uncovered or unsecured loans and more of secured loans. For example, personal loans and credit card loans are considered to be unsecure ones and hence you should pay them off as soon as possible. On the other hand, a house loan or a scooter loan is a secured one and hence it is a sign of good credit. Maintaining the balance of your credit history is the key here. If you believe that by not using your credit card at all, you would be able to have a higher credit score, then you will be mistaken. Non usage of credit card shows that you are too scared of taking on loans and hence cannot handle the pressure of a car loan.

However, do not buy too much of stuffs on your credit card as it would indicate that you are too spendthrift and have little control over your finances. Optimally you should spend less than 60 percent of the credit limit you set to your card. Also, do not let the outstanding loan on your credit card to be rolled over. A lot of credit card companies allow you to pay a part of your loan and then transfer the rest to the next month. This only increases the amount outstanding in your name and it will increase the rate of interest on your outstanding loan and also spoil your credit score.

Once you have secured a loan for used cars, don’t hesitate to log into an online car trading website where you can find good quality second hand cars in the city. You can enter your budget specification along with the model that you want to buy, the fuel variant and the year of manufacture. The website would show you the best options available for your budget. You can directly contact the seller and talk to him or her regarding the sale of the car.

Home Loan Lenders In Australia

In Australia there are now many different types of home lenders, each with different interest rates, terms, conditions and lending criteria. The most common types of lenders are:

Mortgage Brokers
Not to be confused with mortgage managers, mortgage brokers are responsible for introducing borrowers to lenders – they act as an intermediary offering prospective borrowers information on various lending institutions and their products.

Mortgage Managers
Mortgage managers are lending specialists who arrange funding for home and investment loans. Unlike banks, building societies and credit unions, mortgage managers do not have a base of customer deposits with which to fund their loans instead they source their funds via a process known as securitisation. This is a process whereby assets with an income stream are pooled and converted into saleable securities.

The mortgage managers job is to set up the loan and perform a liaison role with all parties involved, namely originators, trustees, credit assessors and borrowers. They provide the customer service role and are there to manage your loan throughout its term.

Credit Unions
A credit union is a cooperative that is owned and controlled by the people who use its services. Each member is both a customer and a shareholder in the credit union.

Deposits from members are used to fund loans to other members, with the credit union business structure facilitating the process. Credit unions serve people who share a mutual interest, such as where they work, live, or go to church.

Credit unions are non profit organisations, and because there are no external shareholders there is no pressure to earn profits at the expense of customers.

Like banks, they offer a wide variety of banking facilities such as loans, deposits and financial planning. Credit unions main function is to serve members needs rather than make a profit. They therefore put a great deal of emphasis on customer service and meeting the needs of members.

Building Societies
Building societies operate in the same manner as banks and obtain their funding primarily through customer deposits. As with credit unions, customers are members. In a sense they own the society, which is why they are often referred to as mutual societies.

Banks
Australian banks are regulated by the Reserve Bank. Banks are the original lending institutions and for the most part they source their funds through customers term deposits and savings deposits via their branch networks.

Customers are paid interest on deposited funds and these funds are then available to lend to borrowers. In turn, these borrowers pay interest to the bank on the sum lent. The margin between interest paid on deposits and interest received from loans provides banks with their major source of revenue.

Five Ways To Benefit From Free Mortgage Loan Calculators

An astonishing 80 per cent of home buyers now conduct at least part of their home search on the Internet. In response to this influx of surfing home buyers, there is now a large number of free mortgage loan calculators available online. All of these calculators share basic core functions and some of them include additional features. But they all can provide valuable insight as you navigate the home mortgage process. Let’s take a look at some of the different types of free mortgage loan calculators available online, and see how we can put them to best use.

Monthly Payments

All free mortgage loan calculators are able to calculate monthly mortgage payments. All you have to do is enter your total mortgage amount and the length of the mortgage, along with the interest rate and the starting date of the mortgage. The calculator will take this information and show you the amount of your monthly mortgage payments.

Some free mortgage loan calculators include an additional feature that will let you calculate the beneficial impact of making extra payments on your mortgage. By entering additional monthly or annual amounts, or adding a one-time payment, you can predict how much earlier your loan pay-off date could occur.

Amortization

Free mortgage loan calculators can also help you figure out your amortization schedule. Whether or not your amortization schedule is based on prepayments, free mortgage loan calculators will help you compute the amount of a monthly payment.

Free mortgage loan calculators determine this by basing their calculations on your data: the principal amount borrowed, loan term, and the annual interest rate. Once the free mortgage loan calculator computes your monthly payment based on this data, you can then create the amortization schedule report.

Bi-Weekly Mortgage

Free mortgage loan calculators can also help you with your bi-weekly mortgage calculations. Making bi-weekly mortgage payments is a relatively painless way to pay additional amounts on your mortgage, saving you interest and shortening the mortgage term. Several free mortgage loan calculators can calculate what your bi-weekly payments will be and show you the amount of interest you will save.

To calculate your bi-weekly payments, total interest, and average interest each bi-weekly period, you will need to input into the free mortgage loan calculator the principal loan balance, the annual interest rate and the amortization. This should be enough for the tool to compute your savings on interest and monthly payments.

Scenarios

Here’s where the free mortgage loan calculators start to get interesting. They help you answer the “what if” questions. You can compare different scenarios to see which course of action leads to the most desirable outcome. For example, you can figure out how the size of your down payment can affect your monthly mortgage payments.

Missing Variable

Free mortgage loan calculators can also help you determine missing variables of a loan. For instance, you can find out how much money you would have to earn in order to afford one.

There are many very good free mortgage loan calculators available online, each equipped with different functions. Just enter “free mortgage loan calculator” in your favorite search engine, and you’ll be rewarded with millions of choices. Explore, compare, and find one you’re comfortable using. It will become your tireless advisor, providing the answers you need for a good home mortgage decision.

How To Choose Your New Credit Card

Choosing a new credit card is not just a personal choice. It’s a lifestyle choice. There are hundreds of credit cards to choose from and savvy shoppers will want to choose credit cards that suit the way they spend and the things they want to do.

Why Do You Need A Credit Card?

First of all, consumers need to consider why they need a credit card. For example, some people may be using the credit card to improve their personal cash flow. They could do this by banking your salary, putting all purchases on the credit card and paying it off before the interest is due. Meanwhile, their salary sits in a current or savings account earning interest.

Other people may want to use their credit card for occasional luxury purchases, such as going on holiday or having a day out with some friends. Still others may use a credit card to pay for purchases where they want the extra consumer protection many credit cards offer. Paying by credit card gives consumers some comeback if there is a fault with the item purchased. This can be useful if manufacturers don’t want to give a refund.

Some people may want to use their credit card to have ready access to cash, for example when going on holiday. People who are planning to use their credit cards for cash advances will need to choose a card that has a low rate for this type of transaction.

How Will You Repay The Credit Card?

The next question people need to ask is how they want to make the payments. If they want to clear thier credit card each month, they will need a different type of credit card to someone who is planning to clear only part of the balance.

It is also useful to check on introductory rates, balance transfer rates and any special offers that apply when taking out a new credit card. Some credit cards offer lifetime balance transfer rates that are much lower than the standard variable rate. Others offer reductions in the variable rate for periods of up to 12 months. Still others offer an incentive for taking out the card, such as cash back or a sports bag.

What Incentives Are There?

Another area to look at is incentives for using the credit card. For example, some credit cards offer cash back on credit card purchases which people can apply to pay off the card. Others offer discounts when the credit card is used with certain manufacturers. Still others offer the option of making charitable contributions on customers’ behalf.

A key area to consider is the annual percentage rate (APR). This is the rate that customers pay on purchases once the incentive period has run out. These rates vary considerably, so it is worth shopping around.

Credit Card Payment Rates And Fees

The minimum payment is another area of concern. Minimum payments on outstanding balances tend to start around 3% but some may be lower and others may be much higher. Finally, the interest free period is of big concern – you’ll want to go for the longest period you can get to keep those payments down.

Finally, consumers need to consider any other fees that might apply to the credit card account. Some credit cards charge one-off setup fees; others charge annual fees; still others charge no fees for owning the card. It’s best for consumers to read the small print to see what fees and rates apply to the cards they have chosen.

Is Refinancing An Option When Facing Foreclosure?

A property that is already in foreclosure may at first seem a difficult task. Granted, foreclosure may make it more difficult to obtain a loan and may require you to aggressively shop around. You’ll want a loan to either pay off your foreclosing lender entirely or bring your foreclosing loan current. It is most important to know that time is your worst enemy when facing foreclosure. There are also many services that will work with you to help with your situation. These companies are able to tailor a plan specific to your needs.

Even if you are just one payment behind, you should do something rather than wait until you are even more behind. Should be possible to refinance your property as long as either your credit is in reasonably good shape or you have some equity in your property. If you are having problems making your payments, contact your mortgage company immediately. Explain your situation. Be prepared to provide them with financial information, such as your monthly income. In fact, an entire industry of lenders caters to property owners in foreclosure.

Consists of obtaining a loan from a new lender to pay your existing lender existing lender. This may sound like common sense but many people fail to do something, and just pretend like nothing it wrong. Seeking help before you are 90 days or more behind on your payments can greatly increase your chances of success.

Decide What Type of Refinancing to Seek
-There are four different options for refinancing your property: conventional refinancing, home equity loans, hard money loans and loans from family and friends.

Compare Different Lenders
-Every lender provides different kinds of loans, terms and services. To ensure that you make a wise consumer decision, check out and compare several different lenders.

Apply for Loans
-Most banks and lending institutions will require that you meet and fill out their loan applications. In contrast, a hard money lender has an “application” that consists of a series of questions asked over the telephone.

Lenders offer a wide variety of interest rates, terms, costs, conveniences and services. Unfortunately, most borrowers don’t spend the time necessary to shop different lenders. The tendency is to borrow from an institution that is conveniently locate. Avoid the anxiety and aggravation of a delay in getting the loan approved. Before signing your application, ask for a commitment that addresses specifics about the kind of loan, term, interest rate, prepayment penalties and points. Important: Since getting a quick response is so important, you might want to submit to a number of sites and let competition bring out the best solution for your situation.